Japan Utility to Suspend Grid Access for New Renewable Energy Producers

Kyushu Electric Power Co. will suspend responding to applications from renewable-energy producers applying to access its grid while it reviews how much more clean energy it’s capable of handling.

The utility, which supplies power to the southern island of Kyushu, said the restriction begins tomorrow, according to a statement posted on its website. The decision doesn’t affect agreements already in place.

Imbalances in supply to the grid threaten to cause blackouts, Kyushu Electric said. During the suspension, the utility will study in the next several months how much more renewable electricity capacity it can bear, Akihiko Shinkai, the utility’s deputy general manager, told reporters in Tokyo today.

Under Japan’s incentives to develop sources of clean energy, utility operators are required to buy clean energy at terms and prices set by the Ministry of Economy, Trade and Industry. The so-called feed-in tariffs cover purchases of electricity generated from solar, wind, hydro, geothermal and biomass.

The incentives, introduced in July 2012, have led to a boom in solar installations across Japan.

Japan had about 42,000 megawatts of installed renewable energy capacity as of the end of 2013, according to Bloomberg New Energy Finance. After hydro, solar is the biggest source of Japan’s clean energy, with almost 15,000 megawatts of capacity.

Kyushu Electric’s decision comes as solar developers face tighter scrutiny from the government, which is concerned some projects aren’t moving ahead as planned.

Grid Capacity

The grid’s capacity to handle new energy sources is also being tested. The power grid in Japan isn’t equipped to handle the clean energy influx, BNEF analysts wrote in an August 2013 report. Grid and market constraints will limit development, the report said.

At the end of May, Japan had approved about 71 gigawatts of new renewable energy projects since the feed-in tariff program began, according to government figures.

Hokkaido Electric Power Co.’s grid was nearing its maximum ability to accept solar power from projects that are 2 megawatts or larger, METI said in April 2013. The ministry said in December that Okinawa Electric Power Co. was also nearing its maximum ability to absorb solar power.

Hokkaido and Okinawa are both conducting experiments with storage batteries to handle extra capacity generated by solar power projects.

Copyright 2014 Bloomberg

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