'Great news': Solar's role in accomplishing Japan's 2050 carbon neutrality objectives

Dec 3, 2020 04:37 PM ET
  • Solar will likely play a significant function in accomplishing Japan's plan objective of reducing greenhouse gas (GHG) discharges to zero by 2050 and also can get to 130GW to 160GW in cumulative releases by the 2030 financial year.
'Great news': Solar's role in accomplishing Japan's 2050 carbon neutrality objectives
Image: Ciel et Terre

Tokyo-headquartered evaluation firm RTS Corporation hosted a webinar last week on the carbon neutral promise made by Prime Minister Yoshihide Suga right before completion of October in what was his first-ever policy speech because taking office. RTS Corporation, which has actually been experts in study right into the PV market for over 30 years, additionally offered an upgrade on the solar PV market and its potential customers to 2030 as well as 2050.

RTS principal analyst Izumi Kaizuka claimed that the policy in addition to the predicted effect it will certainly have on the PV market was "excellent information" as the Asian country intends toward the development of a "environment-friendly culture," in which renewables, nuclear and also later hydrogen will certainly play a significant function. Suga was reported to have claimed that Japan will "fundamentally alter its policy on coal-fired generation," which the architectural modifications to sector and culture that the change to carbon nonpartisanship produces will lead to significant economic growth.

Up until Suga's outlining of those target at the Japanese Diet, which he consequently reiterated at an on-line conference of G20 globe leaders, Japan's target had actually been a reduction in GHGs of 80% by 2050. Accompanying this was a target set by the federal government Ministry of Economy, Trade as well as Industry (METI) to resource 22% to 24% of its power from renewables, mostly solar. RTS' Izumi Kaizuka kept in mind that Japan's existing ability target of 64GW of solar PV by 2030 has this year currently been gone beyond.

With this target already attained, RTS Corporation is recommending that a new, more ambitious but attainable 2030 target for PV would be 150GW of cumulative installations. The firm anticipates that between 5GW and also 7GW of solar will be set up throughout the 2020 Japanese fiscal year (JFY) which runs to the start of April 2021. The COVID-19 pandemic triggered some building and construction hold-ups, Kaizuka kept in mind during the webinar.

Brand-new organization models to emerge as policy as well as policy reforms take shape

METI is preparing to release its 6th Strategic Energy Plan record which lays out a policy roadmap, while the Ministry of Environment is set to introduce steps to sustain self-consumption of solar energy and community use of renewables. At the same time, zoning rules for solar are expected to be loosened up to increase locations where solar can be sited, including on obsolete agricultural land and also some national parks by the Ministry for Administrative and also Regulatory Reform.

Japan has actually been recognized to be revamping the feed-in toll and also other policies that promoted solar PV that were mostly introduced in 2012 after the Fukushima nuclear crash which took place the year before that. Toll payments for feeding renewable energy right into the grid in 2012 were set at ¥ 42 per kWh for systems under 10kW and also ¥ 40 per kWh for systems over that size.

After succeeding years of tariff regression, this fiscal year the tolls vary from 21 per kWh for systems under 10kW to 12 per kWh for systems in between 50kW and 250kW, while anything over that upper limit needs to join public auctions. Furthermore, smaller systems approximately 50kW are currently required to allow users to self-consume a section of their produced power onsite, with only excess generation qualified for FIT repayments.

While RTS Corporation anticipates the self-consumption market to remove, for the time being the Japanese PV market is still largely driven by FIT-granted pipes, not least of all due to the fact that large numbers of utility-scale projects over 2MW were handed contracts but have yet to be developed. There are still more than 20GW of such jobs (21.9 GW), Izumi Kaizuka stated, although 12.7 GW of that pipeline is believed to be already presently under growth.

A brand-new market mechanism to be introduced in the coming years, called the feed-in costs (FIP), is still being talked about and yet to be determined. On the other hand, the federal government's 'Act for establishing a resilient and also sustainable energy system,' of which the FIP is one element, additionally consists of a goal to produce an affordable renewable resource sector as well as a plan of attack for reforming exactly how the transmission network runs and also is spent for.

Japan's future PV market will be made up of a mix of different company models: from self-consumption to power acquisition contracts (PPAs), to some FITs provided by local authorities, auctions for high as well as extra-high voltage projects and also others, Kaizuka stated. These new service models promise to create development in the marketplace quickly, especially following Prime Minister Suga's promise.

Solar as a 'traditional power source'

Izumi Kaizuka's colleague at RTS, Takashi Ohigashi, included that following this policy announcement, solar PV will be a "conventional source of power" in Japan towards 2030 and also 2050. Ohigashi, who works in RTS' advancement promotion division, said that system prices will certainly decline to between 89 as well as 111 per watt, or a levelised price of power of listed below 6 per kWh by 2030, according to the firm's investigations.

Ohigashi further predicted that the PV market will certainly expand to in between 8GW and also 13GW per year under respective organization as usual and faster growth situations modelled by the analysis firm, to get to collective set up figures of 133GW to 165GW by 2030. Growth in the domestic market is anticipated to be driven by new company models that consist of third-party ownership, no-money-down (or 'no Yen') setups and digital power plant (VPP) models.

In feedback to a concern from the target market, the pair claimed that power storage will play a better function in future as self-consumption and also VPP models grow in popularity as the marketplace ranges up. Some local power companies consisting of Hokkaido Electric Power in the north of the country now require new solar plants to consist of power storage systems to lower curtailment as well as mitigate grid congestion.

There are nonetheless no market frameworks in Japan through which batteries as well as various other energy storage can provide grid solutions including regularity response supplementary solutions as has been seen in a few other nations, yet Izumi Kaizuka claimed it is likely such systems and also chances will be presented in the coming years.

Solar Installers, Manufacturers