APEC Workshop on Renewable Energy Promotion and Pricing Mechanism, Taipei, Chinese Taipei
The Renewable Energy Development and
Taipei, Chinese Taipei
The Renewable Energy Development and Related Promotion and Pricing
Mechanism in Japan
September 26, 2013
Takao IkedaThe Institute of Energy
Economics, Japan (IEEJ)
Generation Mix Trend in Japan§ LNG mainly compensates for the decline of nuclear after 2011§ LNG mainly compensates for the decline of nuclear after 2011
2
(Source) METI
Current Generation Mix in Japan
Among the total electricity generated in fiscal 2010, renewable energy, etc. accounted for approximately 10%; approximately 9% of which is hydraulic power generation.Other renewable energy is still cost prohibitive.
Composition of annual electricity generated in Japan
FY 2010 FY 2011
PetroleumCoal
Natural gasNuclear power
HydropowerApprox. 1.4%
Renewable energy excluding hydropower
Approx. 24% Approx. 8%
Approx. 9% Approx. 1%
Hydropower
Renewable energy
Natural gasNuclear power
Approx10.7%
Approx. 9%
Approx
Approx. 31%
Approx. 27%Natural gas
Nuclear power
energy excluding
hydropower
Petroleum
Approx. 14.4%
Approx39.5%
Nuclear power
Coal
Approx. 25%
Note: “Etc.” of “Renewable energy, etc.” includes the recovery of energy derived from waste, refuse derived fuel (RDF) products, heat supply utilizing waste heat, industrial steam recovery, and industrial electricity recovery.
Source: Prepared based on the Agency for Natural Resources and Energy’s “Outline of Electric Power Development in FY 2010”3 3
Major laws and strategies for Renewable Energy in Japan #1
1 Sunshine Project (1974)1. Sunshine Project (1974)Long-term national project for new energy technology research and development in
Japan launched in July 1974.In 1993, Sunshine project was renewed as the New Sunshine Project consolidated with
Moonlight Project ( Energy Efficiency) and other environmental project. The project has finished in 2000.2. Law Concerning Promotion of the Development and Introduction of Alternative Energy (1980)
Known as “Oil Alternative Energy Law” Oil Alternative Energy were developed andKnown as Oil Alternative Energy Law . Oil Alternative Energy were developed and introduced for (1)Combustion, (2)heat, (3)energy, and (4)electricity which are generated from other than oil products. In 2009, oil alternative law was renewed as “NonFossil Energy Law” In this law energy suppliers (Electricity/Gas/Oil companies) have to use non fossilLaw . In this law, energy suppliers (Electricity/Gas/Oil companies) have to use non-fossil energies while using fossil oil efficiently.3. Law Concerning Special Measures to Promote the Use of N E (1997)New Energy (1997)
Known as “New Energy Law”. New Energy is energy which are not price-competitive among Oil Alternative Energy. Hydropower and Geo-thermal power are not included because of their price-competitiveness.(http://www.japaneselawtranslation.go.jp/law/detail/?ft=1&re=02&dn=1&co=01&ky=%E6%96%B0%E3%82%A8%E3%83%8D%E3%83%AB%E3%82%AE%E3%83%BC&page=3)
5
Revision of “New Energy”Innovative High-level
OilAlternative Energy
Innovative High level Energy Utilization Technology
Development of Renewable EnergyPV(High Efficiency, New Materials),
Large HydropowerRenewable Energy
Natural Gas Nuclear PowerCoal Battery for PV and Wind in parallel including capacitor, Ethanol Production Technology from lignocellulosicbiomass, BTL (Biomass to Liquid) Production Technology, Gasification Power
Photovoltaic PowerBiomass
Biomass Power
Geothermal(binary)
New EnergySmall Hydropower GeothermalRapid Advancement of Energy
Efficiency
Generation from Biogas
Stationary Fuel Cell, Hybrid Auto, Natural Wind PowerSolar ThermalUnutilized Energy(Snow Ice)
Biofuels
Biomass Thermal
(Black Liquor)(Scrap Wood)
Unutilized Energy(Temperature
Deference Energy)
Diversification of Energy Source
y , y ,Gas Cogeneration, Heat Pump, Oil Residue Gasification Technology (IGCC, IGFC, etc), Clean Coal Technology
Ocean Energy
Recycling EnergyNatural Energy
(Energy Crops)
BiofuelsFuel Cell Vehicle, Electric Vehicle, Plug-in Hybrid Vehicle, CNG Vehicle, Diesel-substitute LP gas Vehicle, Hydrogen Vehicle, High Concentration Bio Fuel Vehicle, GTL Production
Waste-based Fuels (RDF)Waste Power
Waste Thermal
,Technology, DME Production Technology, Non-traditional Fossil Fuel Usage Technology (Methane Hydrate, Oil Sand, etc)
6(Source) Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry (METI), Japan (modified by IEEJ)
Major laws and strategies for Renewable Energy in Japan #2
4. Special Measures Law Concerning the Use of New Energy by Electric Utilities (2002)Known as RPS (Renewable Portfolio Standard) Law. In this law, the amount usage ofKnown as RPS (Renewable Portfolio Standard) Law. In this law, the amount usage of
renewable energy goals were established with 5 kinds of electricity (wind, solar, small hydropower, biomass power generation , binary geothermal).(http://www.rps.go.jp/RPS/new-contents/top/toplink-english.html)
5. Biomass Nippon Strategy (2002/2006)Comprehensive strategy of utilization of biomass set by Ministry of Agriculture, Forestry
and Fisheries in cooperation with Ministry of Economy Trade and Industry the Ministry ofand Fisheries in cooperation with Ministry of Economy, Trade and Industry, the Ministry of the Environment, and Ministry of Land, Infrastructure, Transport and Tourism etc.6. New National Energy Strategy (2006)
f ( )National energy strategy for 2030. Regarding renewable Energy, (1) promoting innovation in new energy technologies (achievement of PV power cost reduction comparable to thermal power generation etc.), (2) introducing 20% alternative energy in t t ti t ttransportation sector etc.7. Special Measures Law Concerning the Purchase of Renewable Energy Electricity by Electric Utilities (2011)gy y y ( )Known as FIT (Feed in Tariff) Law, which will start from July, 2012. In this law, the purchasing price and its duration will be determined separately.
7
Outline
RPS (Renewable Portfolio Standard)wind, solar, small hydropower, biomass power generation , binary geothermal8-year target set by every 4 years
2003
8-year target set by every 4 years
Buyback surplus PV electricity from residenceDeveloped from Utilities’ voluntary Net metering system
2009 NovDeveloped from Utilities’ voluntary Net metering system
Passage of FIT Law2011 Aug
Proposal from the Advisory Committee Proposal from Advisory committee for the purchasing rate and the duration
2012 Apr
Public CommentFrom May 16 to June 1
2012 May
Commencement of FITStart from July 1
2012 Jul
8
Revision of PV tariffBased on the PV system price decline
FY 2013
Renewable Energy Purchased by Utilities under RPS
(TWh)
0.0 2.0 4.0 6.0 8.0 10.0 12.0
2003
2004
Wind
Wind Hydro
Hydro
Biomass
BiomassPV
PV
Commencement of RPS
2005
2006
Wind
Wind
Hydro
Hydro Biomass
PV
PVBiomass
2007 Wind Hydro
y
Biomass
PV
PV2008
2009
Wind
Wind
Hydro
Hydro
Biomass
Biomass
PV
PV
PV under Buyback
Buyback System for surplus PV electricity from residence
2010 Wind Hydro BiomassPV
PV
PV under Buyback
9
Source: METI
Buyback System started from Nov 2009(1)Major points of the buyback system
○Of the electricity generated by photovoltaic generation systems, surplus electricity will be purchased.○ The buyback period is within the 10 years from the start of the program. The buyback price is fixed.
(※The buyback price may differ depending on the fiscal year in which a panel is installed. In the initial stages, it is \48/kWh for residential use [less than 10kW].)
○ Expenses will be born by all electricity users.
Surplus electricity
E Ele
Purchase revenue(\48/kWh for residential use)
f N 2009
p y
Electricity
lectric C
ompa
ectricity
as of Nov. 2009Solar surcharge
(Born by all electricity users)
Pow
er anies
y UsersSurplus electricity
Users of photovoltaic generation systems
Purchase revenue(\24/kWh for purposes other
than residential use))
※In the initial stages after installation, \48/kWh for residential use (less than 10kW) and \24/kWh for other uses.In the case where a private electric generator is also installed, \39/kWh and \20/kWh, respectively. 10
Buyback System started from Nov 2009(2)
November 2009‐ March 2011
April 2011‐March 2012 (FY2011)Continued until April 2013 (FY2012)(FY2012)
Residential Use 48 JPY/kWh 42 JPY/kWhUnder 10kW (39 JPY/kWh) (34 JPY/kWh)
Non Residential Use and Residential Use
24 JPY/kWh(20 JPY/kWh)
40 JPY/kWh(32 JPY/kWh)
Over 10kW( / ) ( / )
*Rate increased because of finishing subsidy
Rate inside the brackets are for the houses/ facilities using private generation system (photovoltaic generation plus fuel cells, etc.)B backs rate ill be decide each ear and the rate contin es for 10
11
Buybacks rate will be decide each year and the rate continues for 10 years after the start of the program.
FIT Basic Scheme (Started From July 2012)
UtilitiPower producers
utilizing renewable
Electricity from Renewable Source Supply Electricity
Utilitiesgenergy
PV
Middle & Small Hydro
Wind
Purchase Electricity
Collecting Surcharge rate for FIT
With ordinary electricity rate
Fund for Purchasing Electricity from
Renewable Energy
Payment of collecting amount
of surcharge
BiomassCustomers
Organization for adjusting the surcharge by different region
Geothermal Decide Surcharge rate for FIT every
fiscal year
Decide the tariff rate every fiscal year with respect for the opinion
from advisory committee for purchasing price
Mi i t
Power from PV at houses
f
Approving power generation facilities
Advice of Rate and Duration
Minister Economy, Trade and Industry
Source: METI
Advisory committee for purchasing price etc
Major Revision from RPS to FIT
RPS(PV: Buyback)
Feed in Tariff
PV Under about 500kW No Limitation by Capacity
Wind - -Wind
Hydro Under 1MW Under 30MW
Geothermal Only Binary Cycle power plantNo Limitation
(Including Flash Steam Plant)
Biomass No category Differentiate the purchase rate by category
Source: METI
Biomass No category Differentiate the purchase rate by category
13
Electricity Cost Estimation in Japan
201020202030(Japanese Yen/kWh)
Source: National Policy Unit, Cabinet Secretariathttp://www.npu.go.jp/policy/policy09/archive02_shisan_sheet.html
14
Feed in Tariff started from July 2012
FY 2013; PV 10kW >=: \37.8(36.0+Tax)/kWh, 10kW< \38.0/kWh (Incl. Tax)
15Source: METI
Deployment in FY2012 and FY2013(April and May)
Major part of deployment under FIT is PV due to the development Terms
(MW)
Cummulative Deployment Volume as of March 2011
(Approxmate)
Start operation from April 2012 to March
2013
Start operation from April to May
2013
DevelopmentTerm
(Approxmate) 2013 2013
PV (Residential) 4,4001,269
(Apr-Jun: 300)279 2-3months
PV (N R id ti l) 900706
961 1 YPV (Non Residential) 900(Apr-Jun: 2)
961 1 Year
Wind 2,60063
(Apr-Jun: 0)2 4-5 Yrs
Middle and Small Hydro(More than 1MW)
9,4001
(Apr-Jun: 1)0 2-3Yrs
Middle and Small Hydro200
30 2 3Yrs
(Less than 1MW)200
(Apr-Jun: 1)0 2-3Yrs
Biomass 2,30036
(Apr-Jun: 6)38 3-4Yrs
16Source: METI
Geothermal 5001
(Apr-Jun: 0)0 9-13Yrs
PV System cost revison (residential use)
FIT for PV residential sect which is started from July 2012 was based on the PV System cost of JPY(10 thousand) 46.6 / kW in 1st Q 2012.Revised FIT for residential PV for FY 2013 should be based on the latest (4th Qtr) cost which is JPY(10
thousand) 42 7 / kWthousand) 42.7 / kW. About JPY(10 thousand) 4 / kW has dropped
(10thousand JPY/kW))
Already Build
Total Ave.
Newly BuildNewly Build
System cost for FY2012 tariff
Source: METIOct-Dec,
2011Jan-Mar,
2012Apr-Jun,
2012Oct-Dec,
2012Jul-Sep,
2012Jan-Mar,
2013Apr-Jun,
2013
FY2012 tariffLatest System cost
for FY2013 tariff
Fiscal YearSubsidy
(10Thousand JPY/kW)Condition
(10Thousand JPY/kW)Buy BackTariff
(JPY/kWh)
National Government Subsidy for Residential PV system
17
2010 70 650 48
2011 48 600 42
2012 35 475 42
2013 20 410 38
Geothermal Power Plants (Japan)
M ori G eotherm al Plant(H okkaido Electric Pow er C o., Inc. D onanG eotherm al Energy C o., Ltd.)
O num a G eotherm al Plant(M itsubishi M aterials C orporation)
Sum ikaw a G eotherm al Plant(Tohoku Electric Pow er C o., Inc.and M itsubishi M aterials C orporation)
U enotai G eotherm al Plant(Tohoku Electric Pow er C o., Inc.and A kita G eotherm al Energy C o., Ltd.)
M atsukaw a G eotherm al Plant (Japan M etals & C hem icals C o., Ltd.)
Kakkonda G eotherm al Plant, U nit 1(Tohoku Electric Pow er C o., Inc. and Japan M etals & C hem icals C o., Ltd.)
Kakkonda G eotherm al Plant, U nit 2
H acchobaru G eotherm al Plant,U nit 1 and U nit 2(Kyushu Electric Pow er C o., Inc.)
O take G eotherm al Plant(Kyushu Electric Pow er C o., Inc.)
Suginoi G eotherm al Plant(Suginoi H otel)
(Tohoku Electric Pow er C o., Inc. and Tohoku G eotherm al Energy C o., Ltd.)
O nikobe G eotherm al Plant(Electric Pow er D evelopm ent C o., Ltd.)
Yanaizu-N ishiyam a G eotherm al Plant(Tohoku Electric Pow er C o., Inc. and O kuaizu G eotherm al C o., Ltd.)
Takigam i G eotherm al Plant (Kyushu Electric Pow er C o., Inc.and Idem itsu O ita G eotherm al C o., Ltd.)
Kokonoe G eotherm al Plant(Kokonoe Kanko H otel)
T k G h lPl
H achijojim a G eotherm al Plant (Tokyo Electric Pow er C o., Inc.)
Takenoyu G eotherm al Plant(H irose Trading C o., Ltd.)
Yam agaw a G eotherm al Plant (Kyushu Electric Pow er C o., Inc. and
O giri G eotherm al Plant (Kyushu Electric Pow er C o.,Inc. and N ittetsu Kagoshim aG eotherm al C o., Ltd.)
19(Source) Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry (METI), Japan
( y ,Japex G eotherm al Kyushu C o., Ltd.) Kirishim a Kokusai H otel G eotherm al Plant
(D aiw abo Kanko C o., Ltd.)
Governmental support measures FY 2012 budget
Ch i f E O ti I d J 2012
Exploration (drilling of C t ti t Installation of power
Choice of Energy Options:Issued on June 2012The geothermal amount of introduction is made into 3% of the total electric power production (27,200 millions kwh) at the maximum in 2030. ※2010 track record: 0.2% (2,600 millions kwh)
Exploration (drilling of exploration wells, etc.)
Construction stage Installation of power generation facilitiesGeological survey
Risk
[Targets] Cost of test drilling, etc. including geological surveys
Subsidy Investment Loan guarantee
[Targets] Cost of drilling exploration wells to check
[Targets] Cost of drilling ll f
Electric utilities h l t i it
Feed-in tariff scheme
including geological surveys.
Budget: \9 05 billion
exploration wells to check whether a sufficient volume of steam can be stably extracted from heat sources.
Budget : \5 billion
wells necessary for power generation
B d t \1 billi
purchase electricity generated from renewable sources including geothermal at the procurement price
d f th tBudget: \9.05 billionSubsidy ratio: 50% to 75%
Budget : \5 billionInvestment ratio: 50%
Budget: \1 billionLoan guarantee ratio: 80%
and for the procurement period.
20
Regulations on geothermal development
1 Natural Park Act1.Natural Park ActGeological surveys and drillings for geothermal energy in national parks are restricted according to the protection
zones.
2.Hot Spring ActDrilling in pursuit of hot springs (hot water, mineral water, steam and other gas from underground) requires a
permission of the prefectural governor.
3.Forest LawCutting down protected forests for constructing a base for drilling or a power generation plant requires delisting
from protected status. Delisting requires a proven necessity for the public interest.p g q p y p
4. Act on Special Measures concerning Reform of National Forest Business ManagementConstructing a base for drilling or a power generation plant in a national forest requires loaning. A national forest
b d f bli i hi 5h i h i i b dcan be used for public use or within 5ha in area, otherwise it cannot be used.
5. The Environmental Impact Assessment LawConstructing a power generation plant with output of 10,000kW or over requires EIA.Constructing a power generation plant with output of 10,000kW or over requires EIA.When constructing a power generation plant with an output of 7,500kW-10,000kW, the necessity of EIA is judged
by project.
6 El t i Utiliti I d t L6. Electric Utilities Industry LawPower facilities requires placing chief engineers in charge of supervision of safety matters of construction work,
maintenance and operation of the power facilities. 21
Offshore Wind demonstration project
Offshore of Fukushima PrefOffshore of Fukushima Pref. METI
2MW class Floating offshore wind turbine and 2 set of 7 MW class floating wind turbine
Floating substation from FY2013g
Wi d RWind ResourceWind Speed
Offshore of Choshi, Chiba Pref.(2.4MW)/Offshore of Kitakyushu, Fukuoka Pref (2.0MW)
METI (NEDO)2MW class wind turbine
Offshore of Goto, Nagasaki Pref.(2.4MW)MOE
100KW class floating wind t bi f FY2012
22
2MW class wind turbineWind observatory towerdemonstration projects
started from FY2012
turbine from FY20122MW class floating Wind
from FY2013
Grid Framework in Japan
Hokkaido
Tohoku
Direct current power
transmission
Tokyo
KansaiChubu
Hokuriku
Kyushu Frequency converter station
Shikoku
24
Direct current power transmission
Large Battery Demonstration Projects
Hokkaido Electric Company Tohoku Electric CompanyChubu Electric CompanyKansai Electric Company
Large Battery Demonstration Projects for Grid Stabilization
p yType of Battery Redox Flow battery Lith ium-ion Battery NAS BatteryCapacity 40MW 20MW 6MW
Project ObjectiveSurplus Electric ity from
Wind powerFrequency Fluctuation
Grid Stabilization from PV(Surplus Elec . & Frequency
)Wind power
Fluctuation)
R&D Target : Cost reduction of batteries as same level as Pumped Hydro in 2020R&D Target : Cost reduction of batteries as same level as Pumped Hydro in 2020
Lithium-ion Battery NAS BatteryRedox Flow Battery
26
Demonstration Project on Next-generation Energy and Social Systems in Japan (FY 2010-FY2014)
Large-scale and cutting-edge pilot projects have been launched in 4 areas. The outcomes to be accumulated through the projects will be utilized to create smart communities and smart cities in Asia and other countries
Kyoto Keihanna District
create smart communities and smart cities in Asia and other countries.
Demonstration using new technologies in science cityKitakyushu City
Yokohama City
Kitakyushu City
Large scale demonstration in
Demonstration in industrial city
Large-scale demonstration in major city
Toyota City
Community-based
y y
ydemonstration in provincial
city
27
Information of Smart Community Projects
htt //j j / /http://jscp.nepc.or.jp/en/http://jscp.nepc.or.jp/en/video.shtml
28
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