Environmental Engineering Reference
In-Depth Information
by 1995 funding for wind power development was halved and remained at
around US$5 million for the rest of the decade (see Figure 9.4).
In 1995, a new law was passed to permit independent power providers
(IPPs) to sell power in the electricity wholesale market. Although there was
still considerable resistance to wind power from the 10 regional utilities,
this change enabled wind power developers to initiate trial projects. By
2000, installed wind power capacity had increased to 144 MW.
34
In March 2000 the government, facing pressure to decarbonize its elec-
tricity grid in order to live up to its Kyoto Protocol emission reduction
pledge, took another step toward liberalizing the nation's transmission and
distribution (T&D) network. A new law was passed that allowed power pro-
ducers and suppliers to sell electricity directly to extra-high-voltage users
(those requiring more than 2 MW of capacity).
35
his law expanded the pool
of electricity consumers beyond the 10 regional utilities and allowed wind
power developers to implement sales strategies to bypass obstructive utili-
ties. his contributed to a tripling of installed wind power capacity to 464
MW by the end of 2002.
In 2003, the government introduced the nation's irst renewable energy
mandate, a renewable portfolio standard (RPS). Under the terms of the leg-
islation, Japan's utilities were required to purchase a speciied amount of
energy from a pool of renewable technology options, which included small
and medium-sized hydropower, geothermal power, solar PV, wind power,
and biomass. Under the terms of the RPS, power providers were to receive a
purchase price that was equal to the price paid by the end-consumer. Utilities
were given the choice of either purchasing the power from IPP's, generating
the power through self-investment or purchasing surplus credits from other
regional utilities.
36
his latter option was underpinned by a banking mecha-
nism that allowed utilities to sell or store credits for any surplus purchases
of renewable energy that exceeded the annual targets.
37
On the surface, the RPS was a promising step toward encouraging renewable
energy expansion; in practice it was inefective, because the RPS targets were not
ambitious enough to nurture innovation and market commitment (next page,
Table 9.1).
38
he 2003 RPS quota of 7.32 TWh represented only about 0.75% of
the nation's annual electricity production.
39
With wind power providers having
to compete with commercially viable geothermal and small hydro projects, the
market opportunities arising from the RPS were limited. his was exacerbated
by a clause which accorded special treatment to solar photovoltaic energy. For
each kilowatt hour of solar PV electricity that was purchased, the purchasing
utility would receive credit for 2 kWh of renewable energy.
Since its launch, the modest development trajectory of the RPS has been
criticized by renewable energy advocates.
40
he RPS quota for 2014 was
