METI panel to pressure power producers stalking feed-in tariff program

JIJI

A panel commissioned by the industry ministry has decided to impose more stringent regulations on entities that want to sell electricity generated from renewable energy sources under the feed-in tariff program.

The move, endorsed at a meeting of the panel on Friday, is part of the Ministry of Economy, Trade and Industry’s efforts to review the so-called FIT program, which recently triggered a revolt in the industry for obliging utilities to buy all electricity produced by renewables.

The program, aimed at promoting the use of renewable energy in Japan, requires major utilities to buy electricity generated from solar, wind and other clean energy sources at fixed prices.

The government intends to use the beefed-up requirements to certify only stable power suppliers as eligible for the FIT program. Currently, there are more than 700,000 FIT-certified solar power projects that aren’t producing electricity yet.

At Friday’s meeting, members of the panel agreed that the government should not certify applicants who have not signed contracts for connecting to the power grid.

In addition, it agreed to require the regular maintenance of power generation facilities and to revoke certification if power suppliers do not meet the new requirements.

Under the FIT program, the major power utilities earmark funds for buying power generated by renewable sources by passing the costs onto customers.

In reviewing the program, the ministry is attempting to balance the consumer burden with the need to promote renewable energy.

Some of the FIT-certified entities not producing electricity have secured limited slots for using the power grid but are apparently delaying installation on purpose until prices drop.

The ministry has argued that these entities are blocking the entry of power suppliers that can operate at lower costs and those using renewable sources other than solar.

The panel is aiming to draw up reform plans for FIT by year’s end, with legislation to revise the law eyed for Diet submission next year.