Green power surge reveals contradiction in renewable supply, utilities’ demands



Japan’s utilities say they are being swamped by green power because of rules forcing them to buy up every last watt produced from renewable sources, as new electricity companies try to cash in on premium set prices.

Power firms say the grid does not have enough capacity to cope with the rocketing levels of electricity that are being generated by the growing crop of solar power plants, raising the risk of blackouts.

Yet critics point out that it is these same utilities who are pushing to restart the nation’s mothballed nuclear reactors, insisting they need the stability and reliability that atomic power plants provide.

“It sounds inconsistent that a power company says it plans to restart a nuclear plant on the one hand, and on the other says it does not want solar power because there is not enough demand” to soak up all the supply, said Hisayo Takada, a climate and energy campaigner for Greenpeace.

Under rules that took effect in 2012, Japan’s 10 electricity providers — which all hold a monopoly in their service areas — are obliged to buy power generated from green sources at rates fixed by the government each year.

This rate represents a significant premium on the cost of generation, which the utilities can pass on to consumers. That currently works out to ¥2,700 per household, per year.

The idea was to offer income guarantees to a new generation of power companies to encourage the use of renewable energy, which, together with hydropower, accounted for around 10 percent of Japan’s electricity needs in 2012. The goal is to boost that to around 30 percent by 2030.

But Kyushu Electric and four other utilities said in September they would suspend purchases under the feed-in tariff (FIT) system, citing the risk of blackouts from overload.

Critics charge that utilities don’t like green energy because it competes with their own supplies. They say the monopoly they have on distribution allows them to obfuscate.

“If a utility says it can’t transmit solar power on its grid, currently no one can verify the claim because the grid system is a closed box to outsiders,” said Greenpeace’s Takada.

“I hope the (Ministry of Economy, Trade and Industry) will review the claims with fairness and based on information disclosure that should be provided by utilities,” she said.

Green energy has taken on a particular significance since the tsunami-sparked disaster at Fukushima knocked public confidence in nuclear power, a technology that had previously supplied more than a quarter of the country’s electricity.

The nation’s reactors are all offline, but Prime Minister Shinzo Abe’s business-friendly government wants to get some of them back up and running, insisting nuclear is crucial to energy security and can help the country meet greenhouse gas emission reduction targets.

For Hikaru Hiranuma, research fellow at the Tokyo Foundation, the quibbles from the utilities are symptomatic of half-baked deregulation that has left them with too much control over both production and distribution.

“I’m a bit worried about the future of renewable energy in this country because a power grid system that is accessible to everyone hasn’t been achieved,” he said.

Primarily, he argues, the utilities should not be allowed to own distribution channels.

“Otherwise they can set up barriers to new entrants to the power market, by, for example charging for transmission and imposing penalties for unstable electricity supply.”

The growth in green energy output — up 54 percent since 2012 to 31.6 million kilowatt -hours, according to government data — was predictable enough once the FIT system debuted, he said.

“That’s how a country like Spain has made such good use of renewable energy,” he said, adding that 30 percent of Spain’s supply now comes from renewables.

“The causes of the emerging problem is not the FIT but utilities’ failure to prepare for growth in solar power . . . which raises a question about the utilities’ suitability as business entities,” Hiranuma said.

  • Michael Radcliffe

    Nobody should be surprised at such problems. European countries like Germany are also dealing with similar issues brought on by attempts to increase the electricity supply from renewables. The problem, even apart from the cost, stems from the fact that solar power is so variable. Transmission systems have to built to deal with an electricity source that ranges from 0% to full capacity, and provides nothing at all for 12 hours every day.

    Greenpeace is being rather disingenuous in not acknowledging that renewables can never supply the baseload power that society needs. Solar power must be backed up by other sources – in this case fossil fuels, with all the negative environmental impact that entails.

    Until nuclear plants are restarted, the public, industry and the environment will continue to pay the price.