3 WHY JAPAN IS NO-LONGER A FRONT-RUNNER: DOMESTIC POLITICS …
57
more than 80% of PV cells were installed on the rooftops of private households in Japan. However, the Japanese government ended the PV subsidy
policy in 2005. As a result, Japan, a one-time top-runner in solar energy
generation lost its lead to Germany, which in February 2000 enacted
the Renewable Energy Act (or Erneuerbare Energien Gesetz: EEG). The
objective of this law was to increase the amount of renewable electricity
in the power supply to 12.5% by 2010, as one of the central elements of
Germany’s climate mitigation policy. The main feature of the EEG was
to oblige grid operators in Germany to purchase electricity generated by
renewable energy sources at a fixed tariff. This is commonly known as a
feed-in-tariff (FIT) system, which aims to promote the investment into
renewal energy technologies and to ensure investment security.
As for wind power generation, the Japanese market for wind power
was even shrinking. Since 1990, the number of windmills had rapidly
increased, and it reached 1050 in 2005 with the generation of more than
1000 MW. It appeared that this trend would continue to grow until the
saturation of the wind power market. However, according to critics, there
was no real “market” under the new RPS law since 99.5% of the certificate “market” was covered by the ten regional electric power companies
(EPCOs) and the target for electricity generation by wind power set under
the RPS was also small.
Another impediment to the full-fledged growth of wind (and other
forms of renewable energy) market was grid connection issue. The
EPCOs regionally monopolized power lines so that other electric generators under the RPS law needed their cooperation to transmit electricity.
Since EPCOs insisted that “stability of electricity supply” was their highest
goal, and fluctuating wind power was unreliable, they were unwilling
to significantly increase their purchase of electricity generated by wind
power. As a result, the market for wind power never grew much. In
2003, the power companies received connection applications for 2000
megawatts (MW) of wind power generation, but only 330 MW was
approved for connection to the grid, according to the Institute of Sustainable Energy Policies (ISEP). The figure further diminished, in 2004,
when only 50 MW (out of applications totaling 700 MW of capacity)
was approved for grid connection (Iida et al. 2006). In sum, despite the
plan for expanding the use of new energy technology, the role assigned to
renewable energy sources was minimal. They altogether occupied a mere
3% of the total primary energy supply (excluding large-scale hydropower)
in the year 2010 (Yoneda 2008).
57
more than 80% of PV cells were installed on the rooftops of private households in Japan. However, the Japanese government ended the PV subsidy
policy in 2005. As a result, Japan, a one-time top-runner in solar energy
generation lost its lead to Germany, which in February 2000 enacted
the Renewable Energy Act (or Erneuerbare Energien Gesetz: EEG). The
objective of this law was to increase the amount of renewable electricity
in the power supply to 12.5% by 2010, as one of the central elements of
Germany’s climate mitigation policy. The main feature of the EEG was
to oblige grid operators in Germany to purchase electricity generated by
renewable energy sources at a fixed tariff. This is commonly known as a
feed-in-tariff (FIT) system, which aims to promote the investment into
renewal energy technologies and to ensure investment security.
As for wind power generation, the Japanese market for wind power
was even shrinking. Since 1990, the number of windmills had rapidly
increased, and it reached 1050 in 2005 with the generation of more than
1000 MW. It appeared that this trend would continue to grow until the
saturation of the wind power market. However, according to critics, there
was no real “market” under the new RPS law since 99.5% of the certificate “market” was covered by the ten regional electric power companies
(EPCOs) and the target for electricity generation by wind power set under
the RPS was also small.
Another impediment to the full-fledged growth of wind (and other
forms of renewable energy) market was grid connection issue. The
EPCOs regionally monopolized power lines so that other electric generators under the RPS law needed their cooperation to transmit electricity.
Since EPCOs insisted that “stability of electricity supply” was their highest
goal, and fluctuating wind power was unreliable, they were unwilling
to significantly increase their purchase of electricity generated by wind
power. As a result, the market for wind power never grew much. In
2003, the power companies received connection applications for 2000
megawatts (MW) of wind power generation, but only 330 MW was
approved for connection to the grid, according to the Institute of Sustainable Energy Policies (ISEP). The figure further diminished, in 2004,
when only 50 MW (out of applications totaling 700 MW of capacity)
was approved for grid connection (Iida et al. 2006). In sum, despite the
plan for expanding the use of new energy technology, the role assigned to
renewable energy sources was minimal. They altogether occupied a mere
3% of the total primary energy supply (excluding large-scale hydropower)
in the year 2010 (Yoneda 2008).