JFS Newsletter No.176 (April 2017)
https://www.japanfs.org/en/news/archives/news_id035824.html

In this issue of the JFS Newsletter, we show the current status of renewable energy in Japan at three levels: the national level, by service area of each of the regional power companies, and the municipal or prefectural level. This information is based on "Sustainable Zone 2016" ("Eizoku Chitai" in Japanese) published in March 2017 by a research laboratory led by Professor Hidefumi Kurasaka at Chiba University and the Institute for Sustainable Energy Policies (ISEP), an authorized nonprofit organization (NPO).

Renewable Energy Status of Japan as a Whole

The renewable energy market has been growing rapidly over the past decade. The growth of solar photovoltaic (PV) and wind power generation, in particular, has been remarkable. In Japan, while wind power generation has not "taken off" yet, the output by PV power generation has been growing significantly. Although the world's largest power generator by solar energy is China, Japan is quickly rising. Its annual new installed capacity in 2016 was 8.6 million kilowatts (kW) and the cumulative installed capacity reached approximately 42 million kW. As a result, Japan rose to second place, passing Germany, which was at approximately 41 million kW. However, in terms of annual new installed capacity, Japan was third, following the United States which installed 13 million kW.

Looking back to the past, the percentage of renewal energy in Japan hovered at approximately 10% until fiscal 2010. However, Japan's feed-in-tariff (FIT) scheme started in 2012, and boosted installed capacity of PV energy and other renewable energy. As a result the percentage of renewable energy (including large-scale hydropower) to the total domestic power generation capacity (including private power generation capacity) rose to approximately 14.5% in fiscal 2015.

Note: A "feed-in tariff" is a policy mechanism to accelerate investment in renewable energy technologies by having utilities offer to purchase electricity at predetermined rates from renewable energy producers in long-term contracts.

Japan's estimated cumulative installed capacity of renewable energy at the end of fiscal 2015 (excluding energy from hydropower generation larger than 10,000 kW) was approximately 43.7 million kW, an increase of approximately 30% over the previous fiscal year. As mentioned above, PV generation played a considerable role in this rapid growth. Installed capacity of all renewable energy (excluding energy from large-scale hydropower generation) increased by a factor of approximately 3.3 compared to fiscal 2010 (before the FIT scheme started), while PV energy increased by a factor of 8.5. The installed capacity of wind and biomass energy rose by a factor of 1.3 and 1.2, respectively, while geothermal and small hydropower energy remained flat.

Regarding wind power generation, the cumulative installed capacity was 3.17 million kW at the end of fiscal 2015. Even after the FIT scheme started in fiscal 2012, due to prolonged legal environmental assessment procedures, electric power system constraints and other factors, it will take more time before wind power generation is introduced on a full-scale basis.

Regarding geothermal power generation, no new installation occurred for several years after 2000, but thanks to the start of the FIT scheme, in fiscal 2015 and the previous fiscal year, approximately 5,000 kW of geothermal installations were newly introduced. Many geothermal resource surveys and development plans started across Japan and efforts are now being made to deal with various challenges, including relaxation of regulations in natural parks and consensus formation with owners of hot spring facilities.

Regarding small-scale hydropower generation (output of 10,000 kW or lower), only a few new installations were introduced over many years since fiscal 1990; however, since the FIT scheme became applicable to medium to small-scale hydropower generation facilities with output of up to 30,000 kW, surveys and business development projects for medium to small-scale hydropower generation have started across the nation. The annual new installed capacity of medium to small-scale hydropower generation in fiscal 2015 under the FIT scheme was approximately 70,000 kW. Out of this, small-scale hydropower generation with the output of up to 1,000 kW was approximately 12,000 kW and around 92 power generation facilities started operations.

Regarding biomass power generation, before the FIT scheme, installed capacity was increasing due to the growth of waste power generation, mainly using general (municipal) and industrial waste. Since the FIT scheme started, however, woody biomass power generation facilities using domestic wood resources have started to grow. In particular, for power generated using otherwise unused wood such as wood from forest thinning activities, which can be purchased at a high price under the FIT scheme, although most of them had not been used due to cost reasons by the time when the scheme started, recently relatively large-scale biomass power generation installations with output over 5 megawatts (MW) have been introduced and at the same time supply chains for procuring materials have started to be established.

Currently, however, there are many cases where procuring unused wood is difficult in terms of costs. Therefore, there is a growing number of cases to certify biomass power facilities fueled by general wood, such as imported wood and palm kernel shells. In FY2015, 15 biomass power facilities were newly introduced using unused wood, with a total capacity of 138,000 kW. This was an increase of around 2.5 times from the previous fiscal year. Meanwhile, four biomass power facilities using general wood were introduced in the same fiscal year, with capacity of 96,000 kW in total -- an increase of 3.6 times that of the previous fiscal year. Also, in FY2015, 17 biomass power facilities that treat general waste were introduced, with a total capacity of 47,000 kW, as well as 20 biogas power facilities, with a total capacity of 7,400 kW.

Renewable Energy Ratio in Electricity Demand and Supply in Each Service Area of Power Companies

Japan has 10 electric power companies, each with its own service area, from Hokkaido in the north to Okinawa in the south. According to past records on hourly demand and supply for electricity (by power source) in each service area, the average ratio of renewable energy accounted for 15.7% of the nation's total electricity demand in the first half of FY2016 (April to September). By month, the ratio reached over 20% in May 2016. Moreover, the hourly maximum value reached 46% on May 4 of the same year, creating the situation where during this one hour, nearly half of electricity used in Japan was powered by renewable energy! Also, on the same day, the average daily ratio of renewable energy reached 27.5%.

Next, let's look at the ratio of renewable energy by each service area of the power companies. The ratio in the mean value from April to September in FY2016 reached 32% in the area of Hokuriku Electric Power Co. and almost 32% in the area of Hokkaido Electric Power Co.; that is, nearly one-thirds of electricity was generated by renewable energy in those two service areas. However, Hokuriku Electric Power Co. uses a high ratio of hydroelectric power; their ratio of variable renewable energy, such as PV and wind power, is around 3%. Meanwhile, the ratio of variable renewables in Shikoku Electric Power Co. and Kyushu Electric Power Co. averaged more than 9% in the mean value of the same period. This means that the two companies generated almost 10% of their electricity by variable renewable energy sources.

Looking at the time of peak demand for electricity (hourly) under the best condition for renewables, the ratio of renewable energy reached 79% in the area of Shikoku Electric Power and 77% in the area of Kyushu Electric Power. Likewise, in eastern Japan, the ratio of renewables reached almost 71% in the area of Hokkaido Electric Power, and almost 62% in the area of Tohoku Electric Power.

Even with those high ratios, no power outages or other problems occurred. In Japan, the potential for renewables is often dismissed by arguments like this: "PV and wind power are variable in output. But if supply cannot be matched up with instantaneous demand, frequencies and voltages are disturbed, causing power outages and other problems. Since it is difficult to match the supply of renewable energy (which is variable) to constantly fluctuating electricity demand, the ratio of renewables cannot be increased over a certain level." But despite such arguments, why have these high ratios of renewable energy been achieved?

This is due to technological advances for matching up the supply of electricity with fluctuating demand, by more precisely predicting, power demand and renewable energy output based on weather forecasts. Any expected shortages can be covered by operation of natural gas thermal power plants and other means. In Spain and Germany, which are advanced in renewable energy, the prediction error is said to be below 3% to 5%. By actively improving predictive ability based on weather forecasts, Japanese power companies are also becoming able to use higher ratios of electric power from renewables.

Japan's official goal for the ratio of electricity from renewables is "between 22% and 24% by 2030." Since some Japanese power companies have already surpassed the ratio on an almost everyday basis, Japan as a whole will also be able to achieve it before 2030. Now, at long last, Japan has begun shifting from a situation where a very small amount of renewable energy exists on the base load power sources, to a situation where renewable energy is a main power source, while thermal power is used to compensate for fluctuations in renewable energy supplies.

Status of Renewable Energy Supply in Municipalities

As mentioned above, the research group led by Professor Hidefumi Kurasaka at Chiba University and ISEP release an annual report (since 2007) on "Sustainable Zones" (areas where demand for food and energy, etc., is fully met by locally available resources). The report shows municipalities that belong to "100% sustainable energy zones" and "sustainable zones," based on a survey of the status of renewable energy supply and the calculation of food self-sufficiency rates in each municipality in Japan. To draw up the Sustainable Zone Report 2016, the group determined the status of renewable energy facilities in operation as of the end of March 2016 and estimated the supply of renewable energy from them under the premise that they were in operation throughout the year.

A sustainable energy zone is defined as an area where energy demand is completely satisfied by renewable energy generated within the area. In this case, energy demand refers to the demand for households and business activities as well as for agriculture, forestry, and fisheries combined. This is because it is assumed that this energy demand can be satisfied by renewable energy, without high temperature and high pressure processing, and can be controlled by municipalities. Meanwhile, energy demand for transport is excluded from this data, because it is difficult to determine to which municipality the demand should be attributed.

Renewable energy sources covered in the reports include PV power (for households, business activities, and electric utilities), commercial wind power, geothermal power, micro-hydropower (up to 10,000 kW conduit-type facilities, limited to those subject to the Renewable Portfolio Standard (RPS) and the FIT scheme, and including regulating reservoirs), biomass power (the ratio of biomass should be maintained to be at least 50%, and including cogeneration power, but excluding waste biomass generation, as well as industrial biomass boilers for papermaking and other purposes, as a general rule), biomass thermal power (solely from wood biomass, and including cogeneration power), the use of solar thermal power (for households and business activities), and the use of geothermal heat (hot spring heat for bathing and other purposes, as well as ground source heat).

The results showed that advances in introducing renewable energy helped increase the number of municipalities that produce renewables exceeding energy demand for households, business activities, and agriculture within the area (100% sustainable energy zones). The number steadily increased, from 50 municipalities in FY2011 to 55 in FY2012, 60 in FY2013, 62 in FY2014, and 71 in FY2015.

Focusing on electricity, the number of municipalities producing more electricity from renewable sources than electricity demand for households, business activities, and agriculture also increased from 84 in FY2011 to 88 in FY2012, 94 in FY2013, 97 in FY2014, and 111 in FY2015.

There are 47 prefectures in Japan, and renewable energy supply accounted for more than 10% of regional energy demand for households, business activities, and agriculture combined in more than half of them for the first time in FY2015. The number of the prefectures was eight in FY2011, and increased to 14 in FY2013, 21 in FY2014, and 25 in FY2015. The top three energy self-sufficient prefectures were Oita with 32.2%, followed by Kagoshima with 24.9%, and Akita with 22.5%.

Regarding food self-sufficiency, 568 municipalities exceeded 100% in food self-sufficiency at the end of FY2015, a marginal decrease from 571 the previous year. Meanwhile, among 71 municipalities belonging to 100% sustainable energy zones, 39 municipalities also exceeded 100% in food self-sufficiency. These communities are truly Sustainable Zones.

Edited by Junko Edahiro

References:

Hironao Matsubara, Chapter 7 7.1 Renewable Energy Status in Japan and the World, Sustainable Zone 2016, April 2017.
Hironao Matsubara, Chapter 7 7.2 Renewable Energy Ratio in Electricity Demand and Supply in Each Service Area of Power Companies, Sustainable Zone 2016, April 2017.