Japan's parliament is set to approve a landmark bill on renewable energy that was championed by Prime Minister Naoto Kan as a way to reduce the nation's dependence on nuclear power, and which would break the monopoly of the 10 major utilities.
The final passage of the bill, which aims to bolster investment in renewable energy following the worst nuclear-plant accident in the country's history, is expected by the end of the month. Its approval also paves the way for the unpopular prime minister to step down.
Mr. Kan has predicted the legislation would spark "explosive growth" in solar and wind power. He made a commitment to raise the share of renewable energy to at least 20% of total power supply by early 2020s.
The main feature of the bill is a requirement that utilities purchase power from outside providers, such as private companies or cooperatives, under certain circumstances. This rule is seen as opening the door for much greater use of alternative energy sources, an area where Japan lags, accounting for just 9% of total supply.
The legislation, known as a feed-in-tariff law, puts the industry minister in charge of setting the prices at which utilities are obliged to purchase electricity from renewable-power generators.
Big manufacturers, already hurt by power shortages and the effects of the high yen on exports, are expected to face higher electricity bills as a result.
The idea was given little chance of winning legislative approval until the Fukushima disaster created a groundswell of opposition to nuclear power. Mr. Kan's personal efforts also are credited for its success. He said his work was inspired by a visit in 1980 to a wind farm in Denver, Colo., and has insisted he wouldn't leave office until the law is enacted.
But even with the new legislation, Hisashi Hoshi, an analyst at the Institute of Energy Economics, Japan, said "achieving the [20%] target will not be easy without offering generous incentives."
The challenge of connecting a large number of renewable-power generators to the grid is another hurdle. Upgrading the grid is expected to take time and cost up to ¥2 trillion ($26 billion), according to the Ministry of Economy, Trade and Industry.
To ease the burden on heavy electricity users, such as electric-furnace steelmakers, the legislation leaves open the possibility of reducing a new surcharge for large power users. The concession came after fierce opposition to the legislation from the steel industry.
The feed-in-tariff is expected to galvanize Japan's solar-panel makers, such as Sharp Corp. andKyocera Corp., and give a much-needed boost to the wind-power industry. But even Sharp is of two minds, since it also ranks as a major consumer of electricity and doesn't want to see costs go up as it tries to compete with foreign rivals.
The prospects of new opportunities in renewable energy has also spurred new entrants, such as mobile-phone group Softbank Corp., which is looking to develop mega solar projects in regions hit by the March 11 earthquake.
Japan has been strong in solar-panel production, but that advantage is rapidly eroding in the face of competition from China. A boom in renewable energy could result in an increase in Chinese imports instead of developing a local green industry and creating jobs.
The Japan Business Federation, the nation's largest business lobby, also known as Keidanren, has consistently opposed feed-in-tariffs. "The government should focus on ensuring stable energy supply for the next five years," Keidanren said in a statement on energy policy last month. "It must avoid a policy that results in rises in energy prices."
No comments:
Post a Comment