Foreign
By Anthony Isibor.
A report by the Natural Resources Group, NRG, in collaboration with the Japan Energy Summit, has revealed that Japan’s solar industry has struggled more than its other energy sectors over the past year after a tripling of capacity in the last decade.
It ascribed the new redundant growth to the ever-declining Feed-in Tariffs, FIT, which hit an average of just ¥10.31/ kWh in the November 2021 tender.
The report adds that for Japan to reach its decarbonization targets by 2030, and for solar to cover 1/6th of total power demand, as per government plan, a mass new capacity rollout is required. And yet, the industry is facing more headwinds than ever.
“The number of municipalities that have restricted or completely banned new solar developments has jumped by a factor of five in recent years and now accounts for around 1/10th of the national total. In January 2022, one town in western Japan even passed an ordinance asking utility solar operators to pay a new tax based on the land space their panels occupy.
“On the cost side, the recent surge in raw material prices, especially for polysilicon, is affecting profits. On the commercial side, there’s uncertainty ahead of Japan’s April 2022 switch to the Feed-In Premium FIP system, which is supposed to encourage the addition of a storage component but offers less guarantees on electricity price.
In short, the business model is changing and for some initial investors in Japan’s solar boom it’s a sign to head for the exit, says the report.
“Goldman Sachs was one of the more prominent names to exit Japan’s solar space in 2021, selling its controlling stake in Japan Renewable Energy, JRE, to domestic oil refining major ENEOS for about $1.8 billion. The deal marked a changing of the guard, a moment in which the initial “cowboy” era of the solar industry in Japan ended. Those companies and investors likely to thrive in the new era, a Solar 2.0 if you like, will be comfortable with working at lower power prices. They will also be nimbler, more comfortable with hybrid energy systems, and apply more sophisticated and creative panel mounting solutions.
It, however, called for the expansion of solar on water, in car parks, and on roofs, to solar cells inside building materials and on top of vehicles as the burgeoning perovskite solar cell technology moves closer to commercial reality around the middle of this decade.
“That’s a vision backed by Japan’s government energy plan and financing from its Green Innovation Fund.
“Another driver for the industry is the relatively recent emergence of the “white-label” solar provider. West Holdings is one such example, a developer that inked deals to supply Amazon with 450 mini solar farms and Sumitomo Finance with a further 200 MW of solar capacity. Itochu Corp, one of Japan’s sharpest trading houses, has invested in a separate solar developer that plans to build 5,000 mini solar farms around the country by 2025.
“The demand-side push is likely to overcome the negatives and risks that have dogged the solar industry of late, especially as more state funds start to flow into local government budgets from this April to support rooftop solar on public buildings and other green initiatives. But, the area that competing energy sectors should monitor most closely is batteries. Without long-term storage, solar will also require an equivalent baseload capacity for grid balancing. Tesla and Huawei are just two of the big names trying to popularize the use of batteries for energy storage in Japan, but there are few projects of scale to note today, the reports stated.
Realnews reports that the 2022 energy outlook is in preparation for its 4th Energy Summit, which will take place from 2nd to 4th of August 2022 in Tokyo.
The 4th Energy Summit will be convening senior-level stakeholders from across the global value chain will discuss the evolving Japanese energy sector and its leading position in decarbonizing global gas, LNG, and hydrogen markets.
The Summit will address the important topics around Japan’s journey to a carbon-neutral society, the role hydrogen will play in Japan’s future, and how nations can achieve net-zero by 2050.
– Feb. 24, 2022 @ 17:37 GMT |
Tags: Japan Energy Summit Natural Resources Group
