A recent issue on Feed-in Tariff by Kyushu Electric Power Company
In Japan, a Feed-in Tariff (FIT) scheme (the Act on Special Measures Concerning the Procurement of Renewable Energy by Electricity Utilities) was introduced in June 2012 to promote use of electricity from renewable energy sources (RES). The FIT is a major scheme for promoting RES electricity, which has been introduced in European countries including Germany, Spain, and the UK. Following these experiences, RES electricity has been smoothly increasing in Japan, particularly photovoltaics (PV). After the scheme was enforced, 2.4 GW of residential PV and 8.5 GW of non-residential PV have been newly introduced, which occupies 98% of the total newly introduced RES electricity (11.1 GW, as of June 2014). It is due to higher tariff for PV facilities (JPY 37/kWh for residential and JPY 32/kWh for non-residential in 2014) and its shorter lead time compared to other RES facilities. Because its power generation is fluctuated by weather conditions, connecting a large amount of PV to the power grid can cause a problem to balance supply and demand of electricity. In the FIT scheme, there are terms that the electricity companies can refuse to purchase and connect RES electricity under certain conditions. Priority connection of RES electricity is ensured in Europe, while it is not in Japan.
In the Kyushu area, purchase of RES electricity has been held since September 24, 2014 (except for less than 10 kW residential PV). Because the land price in the area is relatively cheap and the potential for PV power generation is large because of the weather condition, around a fourth of PV facilities in Japan have been installed there under the FIT scheme. If the PV (and wind power) facilities are fully operated, the demand can be lower than the supply in the sunny days in spring and autumn in which electricity demand becomes small but electricity supply from PV becomes large.
Although it is expected that such an issue can happen even before the scheme was launched, measures for it have not been taken. In order to promote the RES electricity, which contributes to realize low-carbon society and to reduce dependence on nuclear power, the barriers need to be removed.
Japanese government and electricity companies should take action to solve the issue. The possible remedies are:
- amplification of the transmission network to outside the Kyushu area (interregional transmission);
- installation of storage batteries and use of pumped storage power generation to absorb fluctuation of power generation from RES;
- balancing various RES electricity by controlling purchase prices and periods;
- promotion of stable RES electricity, i.e., geothermal power generation, the potential of which is large in the Kyushu area; and
- flexible control of thermal power generation when power generation from RES facilities is large.
These solutions will be applicable in other areas as precautionary measures.
*After the issue happened in the Kyushu area, Hokkaido Electric Power Company, Tohoku Electric Power Company, Shikoku Electric Power Company, and Okinawa Electric Power Company have also stopped purchasing RES electricity.
For more information on the FIT Scheme in Japan, please see:
Morita, K. and Matsumoto, K. (2014) Renewable Energy-Related Policies and Institutions in Japan: Before and after the Fukushima Nuclear Accident and the Feed-In Tariff Introduction. In: Gao, A.M.Z. and Fan, C.T. (eds.) Legal Issues of Renewable Electricity in Asia Region: Recent Development at a Post-Fukushima and Post-Kyoto Protocol Era. 3−28, Kluwer Law International, Alphen aan den Rijn
Ministry of Economy, Trade and Industry http://www.meti.go.jp/english/policy/energy_environment/renewable/