6 P. MIDFORD
the world’s second largest economy, and several other national cases
in East Asia and Northern Europe. As the third largest economy that
is also fossil-fuel poor, Japan is an important case for understanding
the barriers and opportunities for making the transition to renewable
energy, yet a case that has received only limited analysis in terms of
the second-stage challenges it faces. Most of the existing literature (see
below) focuses on Japan’s decision in the wake of the Fukushima nuclear
disaster to switch from expanding nuclear power to expanding renewable
energy through introducing a FIT and other means. The more recent
bottlenecks, including a political backlash, facing the rapid expansion of
renewable energy that has threatened grid access (exacerbated by a very
underdeveloped and even segmented grid), 5 limited access to storage,
and, on the other hand, the opportunity of electricity market liberalization, have received little attention to date. The Japan section well
illustrates all the new second-stage challenges and opportunities facing
renewable energy that this book focuses on: the new and growing issue of
renewable energy (especially solar PV) curtailment of grid access, attempts
to wrestle market and grid control from incumbent electricity generators, retail market liberalization, efforts to expand grid storage available
to renewables and to build a hydrogen economy as ways to bypass
entrenched energy sector interests.
These issues have come to the fore due precisely to Japan’s success
in rapidly expanding renewable energy capacity, although mostly this has
been limited to solar PV, through relatively simple to devise first-wave
policies such as FITs. From a pre-FIT annual installation rate of 250 MW
for solar PV before 2010, Japan realized 10.5 GW in newly installed
capacity in 2015. After 2015 growth in installed capacity slowed again,
but rebounded to 7.5 GW of new capacity in 2019, with some market
observers predicting 8 GW of new capacity in 2020. METI’s target of
solar PV accounting for 7% of the power mix by 2030 was surpassed
already in 2019 (PV-Tech 2020; REN21 2019).
A significant cause of the slowdown in new installations of solar PV
solar after 2015 was growing resistance from Electric Power Companies
(EPCOs) to connecting this new solar capacity, because they claimed
their grids were reaching the limits of how much more solar capacity
they could absorb. Already in fall 2014 several regional electric companies suspended new connections with the support of METI. In 2015
new grid connections of mega-solar facilities resumed, but under new
and less favorable rules allowing EPCOs greater scope for uncompensated
the world’s second largest economy, and several other national cases
in East Asia and Northern Europe. As the third largest economy that
is also fossil-fuel poor, Japan is an important case for understanding
the barriers and opportunities for making the transition to renewable
energy, yet a case that has received only limited analysis in terms of
the second-stage challenges it faces. Most of the existing literature (see
below) focuses on Japan’s decision in the wake of the Fukushima nuclear
disaster to switch from expanding nuclear power to expanding renewable
energy through introducing a FIT and other means. The more recent
bottlenecks, including a political backlash, facing the rapid expansion of
renewable energy that has threatened grid access (exacerbated by a very
underdeveloped and even segmented grid), 5 limited access to storage,
and, on the other hand, the opportunity of electricity market liberalization, have received little attention to date. The Japan section well
illustrates all the new second-stage challenges and opportunities facing
renewable energy that this book focuses on: the new and growing issue of
renewable energy (especially solar PV) curtailment of grid access, attempts
to wrestle market and grid control from incumbent electricity generators, retail market liberalization, efforts to expand grid storage available
to renewables and to build a hydrogen economy as ways to bypass
entrenched energy sector interests.
These issues have come to the fore due precisely to Japan’s success
in rapidly expanding renewable energy capacity, although mostly this has
been limited to solar PV, through relatively simple to devise first-wave
policies such as FITs. From a pre-FIT annual installation rate of 250 MW
for solar PV before 2010, Japan realized 10.5 GW in newly installed
capacity in 2015. After 2015 growth in installed capacity slowed again,
but rebounded to 7.5 GW of new capacity in 2019, with some market
observers predicting 8 GW of new capacity in 2020. METI’s target of
solar PV accounting for 7% of the power mix by 2030 was surpassed
already in 2019 (PV-Tech 2020; REN21 2019).
A significant cause of the slowdown in new installations of solar PV
solar after 2015 was growing resistance from Electric Power Companies
(EPCOs) to connecting this new solar capacity, because they claimed
their grids were reaching the limits of how much more solar capacity
they could absorb. Already in fall 2014 several regional electric companies suspended new connections with the support of METI. In 2015
new grid connections of mega-solar facilities resumed, but under new
and less favorable rules allowing EPCOs greater scope for uncompensated