A feed-in tariff system that requires utilities to purchase electricity generated with renewable energy sources like solar and wind power at fixed rates took effect July 1.
Renewable energy sources other than hydropower account for only 1 percent of Japan's overall power generation.
Increased use of these clean energy sources will not only reduce the nation's greenhouse gas emissions but help lessen the nation's dependence on nuclear power generation.
As an added benefit, there will be no need to import raw materials for electricity production.
The tariff system should be used wisely to expand the use of renewable energy.
The rates at which utilities buy power from renewable energy will be reviewed annually. But rates, once determined for specific sellers, are guaranteed for 10 to 20 years.
For the first year of the system, the rates have been set at a relatively high level: around 42 yen per kilowatt-hour of solar power.
There are some who say the rates are too high.
The policy was deliberate. The only way to encourage businesses to enter the market is to ensure that they will be able to make a decent profit.
Given that Japan trailed other industrialized nations in introducing feed-in tariffs, setting attractive rates makes certain sense.
In recent months, companies have been clamoring to enter the business. During the current fiscal year, Japan's total renewable power capacity is expected to increase by 2.5 gigawatts.
Clearly, the rates at which utilities buy power under the system should be determined with great care since costs will be passed on to consumers.
Electricity rates charged to households nationwide will be raised by a flat monthly amount of 0.22 yen per kilowatt-hour. A family with an average monthly power bill of 7,000 yen ($87.67) will have to pay about 100 yen more each month.
The figure incorporates an increase resulting from the purchase of surplus electricity from household solar power generation systems.
Increases will be commensurate with the amount of power generated with renewable energy increases.
We don't doubt that many households are willing to put up with a certain level of increase in their electricity bills for expanding the use of renewable energy sources if it means reducing the nation's dependence on nuclear power generation.
But if rates remain at levels that pose an unreasonable burden on consumers, the system will eventually become unsustainable.
Even in Europe, which has been leading the world in feed-in tariffs, the system is still very much a trial-and-error process.
The government should heed the experiences of countries that introduced the system earlier.
Flexibility in purchase prices will be key as renewable power generation grows and costs drop due to technological advances.
The capacity of transmission lines and power distribution facilities will also have to be expanded.
At the same time, the government will need to implement an expanded power distribution system so that electricity can be delivered to areas serviced by other utilities.
The Tohoku region and Hokkaido are especially suited to wind power generation. The volume of electricity generated with wind power that is to be purchased under the new system is rapidly approaching a ceiling. This is because transmission networks in those regions have only a limited capacity.
The situation effectively undermines efforts to make full use of the renewable energy sources available.
Enhancing electric power infrastructure requires huge investment.
The public and private sectors must work together to stimulate the aggressive investment needed to construct a more powerful grid. This will become a huge public asset.
A renewable power generation business can be started with a relatively small amount of capital.
This could lead to community-based enterprises in which investors fund wind-power facilities or citizen power plants operated by associations. The system will also spawn new businesses. Renting roofs for solar power generation comes to mind.
The feed-in tariff system should be used in a way that helps build a new energy future for Japan.
--The Asahi Shimbun, July 4
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