October Agency for Natural Resources and Energy Renewable Energy Fostered by All Understand - PDF document

October 2011 Agency for Natural Resources and Energy 1 Renewable Energy Fostered by All Understand the feed - in tariff scheme and cooperate with us METI Agency for Natural Resources and Energy 2 Summary of the Feed - in Tariff Scheme for Renewable Energy Electric utility etc. Electricity customers (Costs to purchase the electricity generated from renewable energy shall be shared by all electricity customers in the form of a surcharge.) Electricity generated from renewable energy sources shall be connected to and sent via the power transmission line of the electric utility. The electric utility shall pay a fixed price corresponding to the amount of electricity sent.  This is a scheme to foster renewable energy in Japan with the help of all electricity customers.  Electric utilities will be obliged to purchase electricity generated from renewable energy sources such as solar PV and wind power on a fixed - period contract at a fixed price. This will promote the introduction of renewable energy.  Costs of purchased electricity generated from renewable energy shall be transferred to electricity customers all over Japan in the form of a nationwide equal surcharge. They shall pay the surcharge for renewable energy proportional to electricity usage. Surcharge METI Agency for Natural Resources and Energy Electricity usage: 300 kWh Electricity charge: 7,000 yen 3 Household with a solar PV panel installed (example) Home appliances etc. Inverter Distribution panel Conventional meter Electricity purchase meter Power generation with solar PV panel All electricity customers shall bear the surcharge proportional to electricity usage whether or not they have solar panels installed at their houses. Electricity usage and electricity charge will be reduced for the amount of electricity generated privately.  In case of typical household with a 4 - kw solar PV panel (that costs about ¥ 2 million at present) installed, the monthly electricity charge will be reduced from about ¥ 7,000 to ¥ 3,660 by using the electricity generated by the solar PV panel for the household.  In addition, by selling the excess electricity generated by the panel, the household will be able to earn about ¥ 9,000. If more electricity than the power used in the house is generated, the excess can be sold under the feed - in tariff scheme. Electricity usage: 157 kWh Electricity charge: 3,660 yen (including surcharge of 80 yen) Income obtained by selling electricity: 9,000 yen (Note) The above calculation is based on the assumption that the use ratio of solar PV power generation facilities is 12%, t he price/kWh of the electricity sold is 42 yen/kWh, redundancy ratio is 60%, electricity usage per month is 3,000 kW and costs 7,000 yen, and the electricity usage o f 3 00 kWh is kept unchanged in the house even after introduction of solar PV generation. The surcharge/kWh used here is the price after the renewable energy becomes quite popular (0.5 yen/kWh). METI Agency for Natural Resources and Energy Mechanism of Feed - in Tariff Scheme for Renewable Energy Electric utility Cost bearing adjustment organization (Organization to collect and distribute the surcharge) Purchase of electricity at a fixed price for a government specified period Sale of electricity from renewable energy sources Specification of purchase price and purchase period Decision of Surcharge unit price per kWh Electricity supply Collection of surcharge together with the electricity charge Submission of collected surcharge Deliver of purchase cost Approval of facilities Procurement price calculation committee (appointment of five committee members requires consent by the Diet) Electricity customers Those who generate power at home Government Those engaged in the power generation business using renewable energy sources 4 Genki - kun No. 1, symbol of “Tsuru City, Town of Water” METI Agency for Natural Resources and Energy Progress of examination From November 2009 A project team on Japan’s Feed - in Tariff Scheme (five meetings and six hearings were held) March 2010 Options for the scheme were presented and opinions were invited on the website (318 opinions were received until May 2010) From April 2010 Regional forums were held ( Explanatory meetings were held at 21 places throughout Japan and opinions were invited) July 2010 “The framework of the system” was announced From October 2010 Examination of detailed design was started at the council (Advisory Committee for Natural Resources and Energy) From November 2011 Renewable energy symposium was held (at nine places throughout Japan) December 2010 “Report on the Detailed Design (Draft)” was presented and public comments were called for (8840 comments were received until January 2011) February 2011 Compilation of “Report of Feed - in Tariff Scheme Subcommittee” March 2011 Cabinet decision of the bill August 2011 Passing and approval of the bill (August 26)  Feed - in tariff scheme for renewable energy has been examined as follows: 5 METI Agency for Natural Resources and Energy Renewable energy to be purchased Source: “Japan’s Energy 2007” by the Agency for Natural Resources and Agency “The 11 th New Energy Award” by New Energy Foundation etc.  Solar PV power generation for residences (below 10 kW)  Those who generate power using approved facilities  Fives types of energies: Solar PV, Wind power, Small and medium scale hydraulic power (generation of power below 30,000 kW), Geothermal power and Biomass (that does not affect the existing applications such as paper and pulp)  Those who can newly start power generation using approved facilities All of the generated power shall be purchased Excess electricity shall be purchased • It is not necessary to change the wiring at present. You can use it as it is. • The more you save energy, the more you can sell electricity and can obtain more income from sale of electricity. 6 Genki - kun No. 1, symbol of “Tsuru City, Town of Water” METI Agency for Natural Resources and Energy Purchase price and purchase period ○ Purchase rate and period shall be decided every year corresponding to the type, form of installation and scale of renewable energy sources. ○ Specifically, the price and the period shall be decided based on the opinion from an independent committee (members shall be appointed after authorization by the Diet) after consultation with the ministers concerned (Minister of Agriculture, Forestry and Fisheries; Minister of Land, Infrastructure, Transport and Tourism; Minister of the Environment ； and Minister of State for Consumer Affairs). 7 [Reference] Comparison example of current power generation costs yen/kWh 0 10 20 30 40 50 (Source) Geothermal: Geothermal Generation Workshop (June 2009) LNG: Subcommittee to Study Costs and Other Issues, Electricity Industry Committee (January, 2004) After open examination at the third party committee, the purchase price and the purchase period shall be decided. Appointment requires consent by the Diet Points &#x 900; • Power generation cost • Profit to be received by those who installed facilities • Service life • Premium price for three years from the launch of the scheme etc. METI Agency for Natural Resources and Energy Collection and distribution of surcharge  The equal cost (surcharge/kWh) shall be borne all over Japan. The government shall decide the surcharge/kWh based on the results of the previous fiscal year. However, enterprises that consume an extremely large amount of energy (eight times or more the average unit of manufacturers in case of a manufacturer) and customers affected by the Great East Japan Earthquake shall be exempted from the surcharge.  Since it is possible that the introduction speed of the renewable energy would vary depending on the region, an organization to adjust the burden will be established. The surcharge collected by electric utilities shall be first collected by the cost bearing adjustment organization and then delivered to the electric utilities as grants corresponding to the actual purchase costs. Electric utility A Electric utility C Electric utility B Electric utility D Customers of electric utility A Supply of electricity (Payment for purchased electricity) Payment of the purchase cost (Grant) Collected s urcharge amount Government Designation Enterprises that consume a large amount of energy (exempted from payment of 80% or more of the Surcharge) Those affected by the Great East Japan Earthquake (exempted from surcharge payment from July 1, 2012 to March 31, 2013) 8 Customers of electric utility D Customers of electric utility C Customers of electric utility B Payment of Surcharge together with the electricity charge Approval Organization to collect and distribute the surcharge (Cost bearing adjustment organization) This organization first collects the surcharge and, after adjusting the surcharge/kWh so that it becomes equal all over Japan, distributes the necessary cost to the electric utilities. METI Agency for Natural Resources and Energy 9  Excess Electricity Purchasing Scheme has been already introduced for solar PV power generation systems. The electricity purchased under this scheme will be continuously purchased under the newly introduced Feed - in Tariff scheme for renewable energy. Scope of purchased electricity is enlarged to that from other renewable energy sources; all generated electricity will be purchased Relationship with the current Excess Electricity Purchasing Scheme for Solar PV Power Support of Future Support by All Understand the Excess Electricity Purchasing Scheme for Solar PV Power and cooperate with us. Renewable Energy Fostered by All Understand the feed - in tariff scheme and cooperate with us Genki - kun No. 1, symbol of “Tsuru City, Town of Water” Solar energy [Solar PV power generation] Electricity customers [Institutions] [Residences] [Offices] Unused electricity among generated power Income by sale ( ¥ 42kWh for residences) ( ¥ 40/kWh for non - residences) Electricity Surcharge to promote solar PV power generation* (borne by all electricity customers) Electric utility * Cost required for purchase of excess electricity from solar PV power . It is added to the ordinary electricity charge and borne by all electricity customers. Mechanism of Excess Electricity Purchasing Scheme for Solar PV Power METI Agency for Natural Resources and Energy (Reference) Difference from the Excess Electricity Purchasing Scheme for Solar PV Power 10 Excess Electricity Purchasing Scheme for solar PV Power Feed - in Tariff Scheme for Renewable Energy Excess electricity is purchased Electricity generated with solar PV Electricity consumed in the residence Excess electricity (purchased) ¥ 42/kWh for ten years Purchase rate and purchase period Residences Non - residences ¥ 40/kWh for ten years Electricity customers Electric utility Surcharge will be collected by each electric utility. Electricity generated by solar PV system Electricity consumed in the residence Cost bearing Image of excess electricity in case of a residenc怀e In case of electricity from solar PV system for residences, excess electricity will be continuously purchased. Excess electricity (purchased) All generated electricity (purchased) Electricity generated from renewable energy sources Decided after invitation of opinions from the general public on the basis of discussion at the governmental council. * Price is for FY 2011 Purchase rate and purchase period After consultation with the ministers concerned, the purchase price and purchase period corresponding to energy source, form of installation and scale shall be decided based on the opinion from the third - party committee. The price and period shall be fixed after invitation of public comments. Imag怀e Electricity customers Adjustment to make the surcharge equal all over Japan Cost bearing Electric utility Adjustment organization Generated electricity is entirely purchased METI Agency for Natural Resources and Energy Handling of existing renewable energy power generation facilities 11 * Total supply of electricity all over Japan in FY 2009 was 874,100 million kWh (Electric Power Investigation Statistics, Agency for Natural Resources and Agency) (100 million kWh) Image of total obliged amount imposed on the electric utilities during the transitional measure period  Industrial power generation facilities using renewable energy sources are already subject to the Renewables Portfolio Standard (RPS) system introduced in 2003. This system obliges electric utilities to procure a certain amount of renewable energy and has largely contributed to increased use of renewable energy in Japan so far.  New Feed - in Tariff Scheme is for the facilities newly installed. About 1,400 existing facilities for power generation can continue their operation under the same environment as before under the RPS Act. Transfer from RPS system to Feed - in Tariff Scheme FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Results of supply Total of obliged amount imposed on the electric utilities METI Agency for Natural Resources and Energy Other important matters  The Act clearly specifies that the scheme should be actively reviewed corresponding to the actual situation.  The scheme shall be reviewed at least every three years . In addition, if the Basic Energy Plan is changed, the scheme shall be reviewed on the basis of the contents of the plan after change.  The scheme shall be drastically reviewed by FY 2020.  The government will further enhance PR activities. Further, it will use all possible measures including research and development promotion and review of various regulations in order to popularize renewable energy.  Electric utilities and renewable energy enterprises are required to make efforts in cost reduction. Review of the Scheme Responsibility of the Government Responsibilities of Electric Utilities and Renewable Energy Enterprises 12 METI Agency for Natural Resources and Energy