It’s been over a year since the environmental disaster in Fukushima,
Japan, captured the attention of the world and rekindled the
unprecedented public focus on global energy production seen a year
earlier during the Deepwater Horizon oil spill. While we’ve been
tracking the US electricity and oil and gas sectors and monitoring the
(lack of) associated federal policy developments, a few of us at
GreenOrder recently stopped and asked ourselves, “What’s Japan been up
To find out, we attended this month’s Japan Business Forum in New York, hosted by the Japan External Trade Organization (JETRO), which centered on the theme of New Initiatives for Sustainable Growth. Driven by a $288 billion reconstruction fund and other federal policy, Japan is not only rebuilding infrastructure impacted by the March 2011 earthquake and tsunami, but is striving to transform its national energy landscape to maximize the use of non-nuclear renewable energy and develop smart energy communities.
Tatsuya Shinkawa, the DC-based representative for Japan’s New Energy and Industrial Technology Development Organization (NEDO), pointed out that Japan has been progressive on renewables for many years, offering net metering for solar PV in 1992 and instituting a national renewable portfolio standard (RPS) in 2003. But this month has seen the biggest news in recent memory: a new feed-in tariff (FIT) that aims to rapidly accelerate renewables across Japan over the next decade by incentivizing the deployment of solar PV, wind, geothermal, hydro, and biomass energy generation.
The tone of the panelists and participants at the Forum was overwhelmingly positive toward the potential impact of the FIT on driving a sustainable economy. Although he was optimistic himself, Yoshikazu Nose, Senior Vice President at Mitsubishi Corporation Americas, provided a word of caution from the business perspective, namely that a FIT needs to see consistent government support over many years (contrasting this to the recent Spanish FIT experience), and that regulators need to be extremely nimble to handle the initial surge of renewables projects.
Meant to complement the renewable energy incentives, the other cornerstone of Japan’s recovery and revitalization plan is the development of smart cities and community integrated energy systems. The smart cities development strategy uses three tiers of pilots across the country: four large-scale smart community projects, seven technology demonstration pilots, and a large number of smaller feasibility studies, with 2012 budgets of approximately $132 million, $35 million, and $3.5 million, respectively.
These demonstrations aim to build up expertise on distributed generation and smart grid technologies in collaborative settings that meet the needs of local industry and communities. At the same time, all of Japan’s major utilities have set goals of 60-80% smart meter penetration within five years. While the nation’s specific energy needs and cultural norms will determine the opportunities and challenges in such an accelerated grid modernization effort, US utilities and regulators should monitor Japan’s progress closely in order to replicate successes domestically and identify potential challenges with their own smart grid strategies.
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