3 Reasons Behind Unsuccessful 1st Solar Project Bidding

2017/12/16 13:00
Kenji Kaneko, Nikkei BP Intelligence Group, CleanTech Institute
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'Severe conditions' for confiscation of deposit

A meeting of the Committee for Calculation of Procurement Prices, Etc for the feed-in tariff (FIT) policy took place Dec 14, 2017. And the committee had a hearing with industry groups for each kind of renewable energy for calculating a procurement price for the next fiscal year. As for solar power, it had a discussion on the results of the first bidding for solar projects.

The bidding system for solar projects was introduced, targeting solar power plants whose grid capacity is 2MW or higher, based on the revision of the FIT policy. And the results of the first bidding were announced Nov 21, 2017.

While the total capacity to be bid was 500MW, less than 30% of the total capacity (141.366MW) was successfully bid, meaning that it was unsuccessful. The upper price limit was ¥21.00/kWh. The lowest winning bid was ¥17.20/kWh, and the highest winning bid was ¥21.00/kWh.

Japan Photovoltaic Energy Association (JPEA) sent a questionnaire to developers in the aim of analyzing the bidding and announced the results at a meeting of the committee Dec 14, 2017.

The reasons why they did not participate in the bidding include "It was not possible to secure land for a project" (23%), "There is no available grid capacity" (23%), "The upper price limit is too high" (16%) and "The conditions for grid connection contract and confiscation of deposit are severe" (26%).