Grid restrictions could slow Japan's solar revolution

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Despite having grown by more than 7 GW in 2013 and on course to top 8 GW of new capacity this year, Japan’s solar revolution could be derailed as leading utilities begin suspending grid applications for new solar projects.

The Japanese solar sector, worth close to $30 billion in 2013, has enjoyed vast public and political support as the go-to alternative to nuclear power in the wake of the 2011 Fukushima Disaster.

Yet late last month five of the country’s leading utilities began restricting access of new solar plants to their grids, blaming the near-constant expansion of the energy source over the past two years – coupled with the fact that it only delivers to the grid when the sun shines – for causing connection problems.

"Because the transmission lines in some parts of Japan are very limited, solar is causing a problem in some places," Izumi Kaizuka, manager of the research division of RTS Corporation, told pv magazine. "We anticipated this problem last year, and luckily the Japanese government has begun a committee set up to investigate the issue. It will announce how it will tackle the problem at the end of year."

There are numerous options open to Japan, with transmission expansion the most likely route, says Kaizuka. "Each utility wants to hold back some extra transmission capacity for nuclear power, even though there are currently no nuclear plants in operation in Japan."

Kaizuka believes, however, that "one or two" nuclear power plants will restart operation – maybe not as early as next year, but possibly by 2016. "Looking at Japan’s solar market right now, we anticipate further growth for the remainder of the year, and next year as well. But after that, the market will begin to shrink."

The actions of Kyushu Electric Power Co.; Shikoku Electric Power Co.; Tohoku Electric Power Co.; Hokkaido Electric Power Co., and Okinawa Electric Power Co. in curtailing grid access for new solar projects could well be the beginning of the end for Japan’s large-scale solar revolution.

Writing on the Japan Renewable Energy Foundation (JREF) website, JREF director Mika Ohbayashi revealed that Kyushu has put negotiations for grid access on hold "for several months" while the utility reviewed all access requests. Currently, total demand for grid connection would amount to 12.6 GW if all was approved, Kyushu said. The utility’s minimum daytime demand is just 8 GW, but JREF believe that Kyushu’s sudden action to suspend access is "unreasonable".

"Depite more than 12 GW of capacity that has started the negotiation on grid connection so far, we only see a little more than 3 GW of variable renewable power sources actually in place," Ohbayashi wrote. "Under such circumstances, the abrupt withholding of responses is unreasonable in the ordinary business sense, and will bring great confusion to the renewable energy business."

As solar projects pile up – partly due to deliberate developer delays first investigated by METI earlier this year – the bottleneck could usher wind power to the front of the energy queue. Solar’s rival, wind power has only grown by around 1.7 GW since July 2012, but the government is keen to increase its share in the energy mix, according to government sources.

FIT fall beginnings

In response to nuclear’s fall from favor in 2011, the Japanese government’s 2012 incentive program piled incredible generosity on to its feed-in tariff (FIT). At around $0.30 cents per kWh, Japan’s FIT is the highest in the world, and has propelled a solar PV industry that has quickly risen to second-place globally in terms of new capacity.

"Plans need to be made to slow down solar, but any forced measures require thorough reviews and explanations," Ohbayashi told Bloomberg. As utilities take the lead, the government may be silently grateful that third-parties have begun to press the brakes on solar, rather than policymakers who, thus far, have been happy to see the sector cruise ahead.

Japanese Prime Minister Shinzo Abe recently spoke of his desire to restart nuclear reactors to counter-balance solar’s surge. "We will set the target for clean energy, taking into account a balance and attributes of other energy sources," the PM told parliament last week. Yet despite solar’s best efforts post-Fukushima, fossil fuels have taken up most of the nuclear slack, accounting for 88% of the energy mix since 2012. Before Fukushima, that figure was just 60%.

Japanese solar, though, is proving more durable than perhaps imagined. As uncertainty begins to bedevil the large-scale, ground-mount sector, hope is rising that the residential-plus-storage PV market can continue to shine.

"This is a sector of Japan’s solar landscape that could really grow," adds Kaizuka. "Many companies have already begun providing good services in this segment, and it is a sector that now enjoys a government-backed subsidy program."

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