Panel proposes Japan offshore wind tariff lift, solar cut

Mon Mar 10, 2014 2:32am EDT

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TOKYO, March 10 (Reuters) - A government panel has
recommended Japan lift the amount utilities must pay for
electricity from offshore wind farms while cutting prices for
power fed in from solar projects, as the country looks to
diversify its use of renewable energy.
    Japan, hoping to boost alternative energy in the wake of the
Fukushima nuclear disaster, introduced a feed-in tariff scheme
in 2012, under which utilities must buy all power generated from
renewable sources such as wind, solar or geothermal.
    But wind projects accounted for only 3 percent of
development approvals under the programme as of November, with
solar making up 94 percent.
    The panel's recommendation, which will need approval from
Japan's trade minister to take effect, should boost business for
companies connected to the wind sector both domestically and
overseas such as Hitachi Ltd and Mitsubishi Heavy
Industries 
    "As you look at Japan, and how we see the energy mix in
Japan ... we see an opportunity, and that opportunity is in
renewables," Anne McEntee, head of renewable energy at GE
, said at an industry conference last month, when the
company announced it would begin selling a wind turbine made
specifically for the country.
    The offshore wind tariff for major projects should be lifted
by nearly two-thirds to 36 yen a kilowatt-hour from the year
that starts from April, while the solar tariff should be cut by
11 percent to 32 yen a kilowatt-hour for corporate projects, the
panel suggested in a report issued late on Friday.
    While generous subsidies have sparked a rush of solar energy
projects, the trade ministry is now considering revoking
authorization for some unbuilt installations. 
    Industry sources have said the promise of a quick profit
encouraged speculative developers lacking the experience and
expertise needed to deliver, and would cause many projects to
fall through. 
    As of November, less than a quarter of the 26,226 megawatts
of solar capacity approved since subsidies were introduced in
July 2012 is selling power to the grid, according to data issued
late last month by Japan's Ministry of Economy, Trade and
Industry (METI).
    Below is a table of the prices proposed by the committee for
the fiscal year that begins from April and the actual prices for
the current fiscal year that ends in March. The prices are in
yen per kilowatt-hour (kwh) and exclude tax.
    
 Power producer type                     Fiscal  Fiscal
                                           2014    2013
 Solar power (10 kwh or more)                32      36
 Solar power (10 kwh or less)                37      38
 Offshore wind power (20 kwh or more)        36      22
 Onshore wind power (20 kwh or more)         22      22
 Offshore wind power (20 kwh or less)        55      55
 Onshore wind power (20 kwh or less)         55      55
 Small-and-Medium scale hydro power*      14-34   24-34
 Biomass power**                          26-40   26-40
 Geothermal power**                       13-39   13-39
 *Depend on size and use of existing waterways.
**Depend on project size.   

 (Reporting by James Topham; Editing by Joseph Radford)
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