Canadian Solar clarifies status of Japanese pipeline


Canadian Solar on Monday said only one of its may be affected by a temporary suspension in grid connection approvals by Kyushu Electric Power in Japan.

Kyushu provides power to seven prefectures in the country, including Fukuoka, Nagasaki, Oita, Saga, Miyazaki, Kumamoto, Kagoshima and recently to some parts of Hiroshima.

Canadian Solar said it was seeking to clarify the status of its Japanese pipeline in light of Kyushu’s recent announcements that it would temporarily suspend grid connection approval for new solar projects pending evaluation of its respective grid capacity availability.

Canadian Solar's late-stage utility-scale project pipeline in Japan stood at 405 MW at the end of the second quarter. During the third quarter, the company successfully added 85.5MW of new projects to its portfolio and increased its total late stage project pipeline in Japan to 490.5 MW. Approximately 150 MW of these projects already have full grid connection approval and are in the construction permitting stage. The company is currently evaluating more than 200 MW of additional projects for acquisition and maintains its goal to increase its late-stage pipeline in Japan to approximately 550-600MW by the end of 2014.

Kyushu expects to complete the evaluation of its available grid capacity by the second quarter of 2015. Projects that have full grid connection approval are not suspended and moving ahead according to plan, Canadian Solar reported. Ten of the company's projects within the Kyushu area representing a total of 95.6 MW have received full grid connection approval. Canadian Solar said it expected those 10 projects to move ahead according to plan. Only one of the company's projects in the Kyushu area, Shibushi-Uchinokura, totaling 2.3 MW, has not received full grid connection approval and as a result is affected by the temporary suspension.

Following Kyushu's announcement, Hokkaido Electric Power, Okinawa Electric Power, Tohoku Electric Power and Shikoku Electric Power also announced temporary suspensions of grid connection approvals.

Canadian Solar has three projects in the Tohoku area totaling 135 MW. The company said it is continuing to work with Tohoku to develop these projects and at this point it expected them to eventually reach approval. These three projects were originally targeted to reach commercial operation in late 2016 or 2017, and therefore allow sufficient time to accommodate the utility's grid capacity study, the company said.

Canadian Solar has no projects in the Hokkaido, Okinawa or Shikoku utility areas.

The company said it had discussed the current situation with its module customers and does not expect the recent utility announcements to affect its near term solar module business.

"We remain confident on our position in the Japanese market, both as a module supplier and project developer," said Canadian Solar Chairman and CEO Shawn Qu. "The recent announcements by electric utilities are not expected to slow down projects that have already been approved. Instead, we believe that it is ultimately beneficial to weed out some of the superficial projects so that those with good quality have better chance to advance. We expect to be on track for our Japanese project development business."

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