Energy Efficiency, Solar, Storage, Wind Power

Japan’s Prime Minister Re-Election Risks Undercutting Clean Energy Push

Shinzo Abe’s re-election as prime minister risks undercutting Japan’s commitment to clean energy at a time when incentives are under review and the nation’s utilities say they can’t accommodate capacity already planned.

“Utilities and the trade ministry want to set the ratio of clean energy low in order to keep nuclear,” said Shigeaki Koga, a former official of the Ministry of Economy, Trade and Industry who now writes about energy and policy issues.

Abe’s ruling coalition gained more than two-thirds of the 475 seats in the lower house yesterday. The renewed mandate raises the possibility that Abe, an advocate of nuclear power as long as its safety can be assured, will use the coming term to push harder for the resumption of Japan’s idled nuclear reactors while keeping renewables policy vague and ill-defined.

“The government’s debate on the energy mix will be based on the assumption that nuclear reactors will be restarted,” said Hisayo Takada, a Tokyo-based climate and energy campaigner for Greenpeace. “Renewables may only get the remainder share.”

The coalition’s resolve on clean energy will be tested when a committee tasked with setting incentives for renewables starts deliberations early next year amid expectations that the tariff for solar power will be cut again. Also, legislation to unbundle transmission and distribution operations is expected to be submitted to parliament next year.

Industry Deregulation

“There is the possibility that the plan will be watered down,” Takada said.

Japan has added about 13 gigawatts of clean energy capacity since an incentive program began in July 2012, according to data compiled by the trade ministry.

The incentives, known as feed-in tariffs, are a holdover of the previous government led by the Democratic Party of Japan, which introduced the measures to diversify Japan’s energy supply following the Fukushima disaster in March 2011.

Since assuming power in December 2012, Abe’s focus has been on the economy to end decades of deflation and spur growth. The prime minister has had to achieve that largely without nuclear power. Japan’s reactors provided about a third of the nation’s electricity before Fukushima.

Fuel Costs

Since Japan flicked off the switch to its nuclear energy program, expensive energy imports, particularly of liquefied natural gas, have worsened trade deficits. The Japanese government estimates regional power companies paid 3.6 trillion yen ($30.5 billion) more in fuel costs in fiscal 2013 compared with fiscal 2010 before the Fukushima disaster.

Supporters of renewables have used the absence of nuclear energy — and the economic consequences — to press the case for Japan to pursue more aggressive policies to build up stores of clean energy capacity.

In April, Abe’s government released a set of policies which said Japan will aim to boost its share of renewables past the old target of 20 percent by 2030 including hydropower. The government has yet to decide how much power should come from which sources.

Targets Urged

Renewables — not including hydro power — accounted for only 2.2 percent of Japan’s electricity generation in fiscal 2013, compared with 1.4 percent in fiscal 2011. In Germany, the contribution is close to 21 percent and even higher in Spain with more than 26 percent, according to an October trade ministry document.

Proponents say Japan should set an ambitious target for clean energy even before the country decides on its energy mix.

“The new government should put clean energy as the centerpiece of its energy policy,” said Mika Ohbayashi, director of the Japan Renewable Energy Foundation. “Otherwise renewables’ share will not increase.”

Abe’s party said in election campaign literature that it will promote expanding renewables “as much as possible in a sustainable way.” The LDP has also said it will work to ease the burden on consumers.

Consumer Burden

Keidanren, Japan’s largest business lobby, says that while clean energy is important, the government should introduce measures to mitigate how much consumers end up paying and that tariffs should be adjusted every six months — rather than once a year as is currently the practice — to better reflect declining costs.

Under the feed-in tariff program, utilities buy solar, biomass, wind, geothermal and hydropower from producers and costs are passed on to consumers as surcharges.

According to government estimates, an average household in Japan would face about 935 yen a month in surcharges should all the new clean capacity that’s already been approved eventually make it online.

Still, for all the questions about the effectiveness and the cost of Japan’s clean-energy policy, supporters say progress has been made.

Local Development

“We are seeing results and companies are entering the clean energy market” after the incentive program was introduced, said Yoshihiro Fujii, a professor at the graduate school of global environmental studies at Sophia University.

The incentive program is helping to revitalize regional economies as seen in the examples of developers setting up solar panels on reservoirs, Fujii said.

“Renewables can be utilized more to revitalize rural areas,” he said, citing the push by the Abe government to breath new life into local economies.

Copyright 2014 Bloomberg

Lead image: Japan map via Shutterstock