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Article 806 from 2299

:: Japanese Proposed Tariffs Submitted

+ 04.05.2012 + World's Highest Feed-in Tariffs. Differentiated by Technology. But Otherwise Little Further Differentiation. Are the Tariffs too High?

In what may be the most significant renewable energy policy development worldwide in years, Japanese authorities are circulating proposed feed-in tariffs that-if confirmed by the Minister of Trade later this month-could lead to a crash renewables program.

 

Equivalent to putting the country on a war-time footing following the Fukushima nuclear disaster, the unusually high tariffs will lead to a massive rush of renewable energy development.

 

Japan, a country long known for dragging its feet on developing its own renewable resources, may be embarking on a huge course correction in energy policy, turning its back on nuclear and turning toward renewables.

 

The outcome of the current policy debate is uncertain. Foreign analysts are left to read the tea leaves of Japanese political maneuvering to see what may be in the future for renewables in Japan.

 

Though major media outlets and trade publications have been reporting the proposed tariffs as fact, little is known in English.

 

From Japanese sources, it appears that the powerful Minister of Economy, Trade and Industry (METI) Yukio Edano will rule on the tariffs by the end of the month and open them to public comment.

 

The tariffs are scheduled to go into effect this July.

 

Proposed Tariffs

The proposed policy includes tariffs for wind, geothermal, hydro, solar photovoltaics (solar PV), biogas, and biomass technologies.

 

Most tariffs are further differentiated by size but with limited categories. For example, there are only two tranches for wind, solar PV, and geothermal. There are three tranches for hydro.

 

There is only one tariff for biogas

 

Germany until recently used six different size tranches for solar PV. For wind, Germany uses a continuum of tariffs from a targeted moderate wind resource to the resource at a windy site.

 

Similarly, Ontario's new tariffs include eight different tranches for solar PV and six different tranches for biogas.

 

The greater granularity that multiple size tranches provide a technology allow program designers to more closely tailor tariffs to actual costs, minimizing overall charges to consumers.

 

The Japanese, rather than adopting best practice from Germany, Ontario or other countries instead have opted for a simplified tariff schedule. Doing so has limited program designers' ability to refine the tariffs. Consequently, the resulting tariffs are among the highest in the world and for some technologies, such as for small wind, are the highest in the world.

 

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