Japan's clean energy incentives mark shift from nuclear power
18 Jun 2012
Japan today approved a raft of incentives for renewable energy that could flood billions of dollars into clean-energy investment and see the world's third-biggest economy substantially cut reliance on nuclear power after the Fukushima disaster.
Industry minister Yukio Edano approved the introduction of feed-in tariffs (FIT), which would allow higher tariffs for renewable energy. The move is expected to bring in more revenue from renewable generation and related equipment estimated at $30 billion by 2016.
The subsidies to take effect from 1 July are one of the few certainties in Japan's energy landscape, where the government has worked from the ground up to draft a power policy after the Fukushima radiation crisis, the world's worst nuclear disaster since Chernobyl in 1986.
Besides cutting dependence on nuclear, the measure is also aimed at reducing reliance on pricey oil and liquefied natural gas for energy needs.
Under the scheme, Japanese utilities would be required to buy electricity from renewable sources including solar, wind and geothermal at pre-set premiums for a period of up to 20 years. Consumers would foot the costs through higher bills.
Utilities will pay 42 yen per kilowatt hour (kwh) for solar-generated electricity, double the amount in Germany and over three times charged in China.
Wind power would be subsidised at least 23.1 yen per kwh, as against the low 4.87 euro cents in Germany.
Subsidies have triggered exponential growth in renewable energy in countries including Germany, which has nearly tripled its output in less than a decade.
Japan's drive to spur investment in safer, cleaner and self-sufficient energy, though is starting from a low base, with electricity generated from renewable sources apart from large hydro-electric dams accounting for only 1 per cent of power supply in Japan.
Nuclear power made up around 30 per cent of Japan's electricity supply before the Fukushima disaster of 11 March last year.
