Smart Grid

June 20, 2012

In Japan, Utility Scale Solar Plants Rise from Fukushima Ashes

Things are, literally, looking up in Japan more than a year after a 3.11-magnitude earthquake and tsunami hit its northeastern coastline, causing the worst nuclear accident since the rupture and explosions at the Chernobyl RBMK reactor in the Ukraine in April 1986. This week, the nation known as the Land of the Rising Sun announced plans to build a solar power complex with a total generating capacity of 100 megawatts (MW) that will replace the crippled Fukushima Daiichi Nuclear Power Plant— making it the biggest solar project in Japan ever.

The Tokyo-based multinational electronics corporation, Toshiba (News - Alert), said it will spend around 30 billion yen (US$379.6 million) to construct several utility scale solar plants in Minamisoma, about 16 miles north of the original Fukushima generation sites. Toshiba said it will start building the plants this year and start operations in 2014.

The project surpasses an earlier plan by Kyoto-based solar system manufacturer Kyocera Corp. (News - Alert), which, in partnership with two companies headquartered in Tokyo—heavy machinery maker IHI Corp. and Mizuho Corporate Bank—proposed to launch a 70-MW plant in southern Japan.

Toshiba’s announcement followed closely upon the Japanese government’s approval of new incentives for renewable energy starting that will be effective as of July 1— including the introduction of feed-in tariffs (FITs), a move that is calculated to unleash billions of dollars in clean-energy investment.

Indeed, according to Reuters (News - Alert), Japan is poised to overtake Germany and Italy, to become the world’s second-biggest market for solar power, as incentives drive sales for equipment makers—from Yingli Green Energy Holdings Co. to Sharp (News - Alert) Corp. to Kyocera Corp. To take advantage of the subsidies, Yingli, based in Baoding, China, has made plans to start operations in Japan.

Under the new program, utilities will buy solar, biomass, wind, geothermal and hydro power. All costs will be passed on to consumers in the form of surcharges, which the government today said will average out at 87 yen (about US$1.00) a month per household. The government’s previous average estimate was 100 yen (about US$1.25). 

The measures expand on a program launched in late 2009 that requires utilities to buy solar power that the generator doesn’t need. That policy expanded the market for rooftop residential panels.

The new incentives will encourage utility scale projects, including those already planned by Toshiba and Kyocera. Solar stocks rallied upon release of the news.

In related news, several days ago, a power company in western Japan was given the go-ahead by the government to begin work to restart two reactors in Ohi town, a process that is expected to take several weeks. Despite lingering safety concerns, the restart could speed the resumption of operations at more reactors across the country. All of Japan's 50 nuclear reactors currently are offline for maintenance or safety checks.

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Edited by Amanda Ciccatelli