Japan’s Green Energy Push Hits Wall

Japan has an energy problem. With few conventional fossil fuel reserves, it’s had to rely on imports and nuclear energy for a large portion of its supply needs. The Fukushima disaster threw its nuclear sector into turmoil, but many believed renewables could help shore up energy security while bringing down emissions. Unfortunately, things haven’t exactly gone to plan. The FT reports:

[R]enewables, excluding hydroelectric power, only accounted for 2.2 per cent of the nation’s electricity output in fiscal 2013, said Japan’s energy agency. That is in sharp contrast to the 5.6 per cent in the US, the UK’s 10 per cent and Germany’s 18.9 per cent.

But it’s not just the raw numbers that are giving Japanese policymakers pause. Last fall a utility came out against the influx of new solar panel installations, warning that the distribution of these new sources of energy would destabilize electricity grids. The FT has more:

In September, Kyushu Electric Power, on the southern island of Kyushu, threw a spanner into the nation’s renewables drive. The company — a vertically integrated regional monopoly like the other nine electric utilities, with generation, transmission and distribution under one roof — said that it would put applications on hold for developers wanting to sell renewable energy to the utility, citing concerns that all that extra power could destabilise its grid. Dubbed the “Kyushu Electric shock”, other power companies across Japan followed its lead.

The utility’s complaint has been downplayed by greens who see these grid operators as part of the fossil-fuel old guard, fearful of change and jealous of their fiefdom. There may be something to that—we’ve seen disruptive new technologies cause all kinds of headaches for institutions facing down new processes and the prospect of irrelevancy—but the utilities also have a valid point. Grids were initially configured with one-way wires, delivering electricity from large nodes in the network, like coal or gas-fired power plants, to consumers. Renewables fundamentally rework that distribution, and because solar and wind installations can’t produce power when it isn’t sunny or windy, green energy producers become consumers during certain times of the day. The result is a much more complicated system that requires a lot of infrastructure investment, not simply slapping panels on roofs and calling it a day.

Japan is also wrangling with an issue that every country which has introduced feed-in tariffs has had to deal with: speculating sharks circling to take advantage of that government support. The FT explains:

The number of applications approved to lock in the extremely high tariffs jumped to a cumulative 1.5m in October, up from 34,000 at the start of the [feed-in tariff (FIT)]. That was led by speculators — many without the know-how, finances or land to actually deliver the power proposals. The utilities and regulators could have foreseen those potential problems by learning from the experiences of other countries, such as Germany, where construction plans fell short nearly a third of the time. In Japan, the actual percentage of large-scale, non-residential plans, measured in kilowatts, that received approval and then actually supplied electricity has been less than 20 per cent, according to Japan’s energy agency.

The 2011 Fukushima disaster exposed Japan’s massive energy vulnerabilities, and with its fleet of reactors still lying dormant the island country is scrambling to find alternatives. Solar may yet have a role to play, but in the land of the rising sun it’s off to a rocky start to say the least.

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