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Is Japan's new feed-in tariff strong enough?
05 October 2011
Japan’s new feed-in tariff law is no guarantee of renewable energy take-up. The price utilities will pay to renewables generators has yet to be determined. Furthermore, a “stability in the grid” clause may affect renewables’ long-term growth. By Jeff Rector and Mark Plenderleith, Milbank.
On 26 August, 2011 the Japanese Diet enacted a law that requires electric utility companies to purchase renewable energy. While the law’s passage marks a significant milestone in the effort to increase the integration of renewable resources into Japan’s nuclear and conventionally powered grid, the law does not guarantee renewable energy adoption. The law is better viewed as the establishment of the playing field boundary lines within which the renewable energy industry and its constituents will battle the regional electric utilities and cost-sensitive industrial consumers for a role in Japan’s strategy to maintain economic growth while reducing both dependence on imported fuels and carbon emissions.
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Japan has the third largest electricity market in the world (behind the United States and China). An island nation, Japan does not import or export electrical power. But short on domestic energy resources, Japan imports more than 80% of its primary energy supply/feedstock.
To reduce its...
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