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Friday, Sep. 16, 2011
Kick-starting green energy
The Upper House on Aug. 26 unanimously enacted an electricity feed-in-tariff scheme law under which Japan's 10 power companies, in principle, will be required to purchase all of the electricity generated through renewable energy sources for long periods at prices advantageous to operators of green energy facilities. The law will go into effect on July 1, 2012.
As Japan is suffering radioactive contamination and power shortages from the ongoing crisis at Tokyo Electric Power Co.'s Fukushima No. 1 nuclear power plant, it should fully make use of the law to develop a social system that reduces both reliance on nuclear power and greenhouse gas emissions. Global warming is blamed for the latter.
Some 80 countries and regions have already introduced an electricity feed-in-tariff scheme. In the past decade, there was a move among Diet members to enact such a law. But the power industry and the trade and industry ministry resisted and prevented the enactment. Their move hampered the promotion of electricity generation from renewable sources.
As a result, except for electricity from hydraulic power, electricity from renewable sources accounts for only about 1 percent of Japan's total power generation. The power industry and the trade and industry should be reminded of their responsibility for causing this situation.
Under the law, the power companies will be required to purchase all the electricity generated through such means as photo voltaic systems, wind power, small-scale hydropower, geothermal power and biomass at prices advantageous to operators of these renewable energy sources.
As for electricity generated through solar panels installed at homes, the power companies will only buy surplus power. The scheme of purchasing all electricity from renewable sources does not apply to that generated by existing windmills.
The power companies will be allowed to pass on the cost for the purchases to consumers as a surcharge. A five-member committee will be set up within the Agency for Natural Resources and Energy of the trade and industry ministry to set the prices at which the power companies will purchase electricity from renewable sources. The appointment of the five committee members needs Diet approval.
Although households and enterprises will have to shoulder higher electricity bills, they should regard the surcharge as investment by society as a whole in efforts to lay the foundation to build a society living on sustainable energy supply. (The law includes a clause that will help companies that use a large amount of electricity. The surcharge for them will be reduced.)
Electricity users have to pay attention to the fact that because the prices of fossil fuel will rise in the future, it is reasonable to promote renewable energy sources at home.
The Institute for Global Environmental Strategies estimates that in terms of long-term cost, promoting renewable energy sources will be cheaper than relying on fossil fuel if a country phases out nuclear power.
One of the reasons for promoting renewable energy sources is that they can be developed and established in various parts of Japan, helping to increase employment and revitalize economic activities in the countryside.
Electricity users should realize that relying on fossil fuel means doling out Japanese money to foreign countries, while paying for electricity from renewable energy sources means helping to increase employment and improve technology used in green energy generation.
At a time when the international community is trying to reduce greenhouse gas emissions, increasing reliance on fossil fuels would only damage Japan's reputation.
The price-setting committee must set the purchase prices of renewable electricity so that they will enable grassroots entities generating such electricity to flourish.
It should not adopt a policy that will benefit only the large capitalized companies that enter into the business of renewable electricity generation.
The government must help promote power generation methods that will fully take advantage of Japan's geological and other features, such as geothermal sources in volcanic areas, timber biomass from forest thinning, fallow agricultural fields and rice paddies, waves and tidal currents along coasts, rapid river streams and deep snow packs.
It also should help improve the technology to store renewable electricity for stable distribution, since electricity supplies from renewable sources, especially solar and wind power, have demonstrated instability.
The government also should financially help small and medium-size firms entering into green energy business and scrap various regulations hindering quick establishment of facilities and systems for green electricity generation.
But the law has a loophole. It allows the power companies to reject electricity connections from renewable sources if doing so hinders the smooth supply of electricity in their power lines.
Users and the government should strictly watch the power companies so that they do not abuse this provision.
The central government and the power industry should develop a smart grid that can cope with voltage changes in renewable electricity. Wide use by households of smart meters also should be promoted to help flatten the peaks of electricity demand. Management of power lines also should be changed so that renewable electricity can be transmitted to remote communities and cities that use a large amount of electricity.
More important, the government should break the collusion between bureaucrats and those close to the power industry when decisions are made on the nation's energy policy.