Prospects for Japanese PV Market in 2018 (2)
Trends of market scale, policy, technology, finance
Continued from Prospects for Japanese PV Market in 2018 (1)
Only '41MW' of extra-high-voltage projects in fiscal 2017
The certification situation in fiscal 2017 is attracting a great deal of attention as new project developments are in a recovery trend.
In fiscal 2017, the sales unit price for non-residential power plants below 2MW dropped to 21 yen/kWh and a bidding system was applied to plants above 2MW. Following the shift to the new system, the hurdle for obtaining the certification became higher. The conclusion of a connection contract with a power company, which requires payment of the contribution in aid of construction, is essential for acquisition of the certification.
As of early January 2018, METI has not disclosed the certification situation in fiscal 2017 at all, explaining that data acquisition from its system is impossible due to the shift to the new system.
However, the situation was confirmed for extra-high-voltage projects to which the bidding system was applied. As for bidding in fiscal 2017, projects with a total capacity of 141MW won the bid, while 500MW was set as the framework of the invitation. Among the projects, certifications were cancelled for projects worth 100MW due to failure to pay the secondary deposit, resulting in an extremely sluggish result, with effective certifications for only 41MW capacity.
The capacity was about 0.9GW in fiscal 2015 and about 2.6GW in fiscal 2016, in respect to certifications of extra-high-voltage projects. The figure dropped dramatically to 0.041GW (41MW) in fiscal 2017 (Fig. 9).
METI points out the system under which "the deposit is confiscated when a connection contract is not concluded within three months after winning the bid," which is a big risk, and "the last-minute applications for extra-high-voltage projects in 2016," which was explained earlier, as the reasons for the sluggish result.
Another possible reason is the likelihood that developers that aim to establish large-scale projects shifted the focus to the development of high-voltage grid connection projects below 2MW, to which the bidding system is not applied.
"We are keeping an eye on the bidding system for extra-high-voltage projects," a foreign-based developer actually said. "At the same time, we are placing a focus on the method of constructing multiple high-voltage plants of 2 to 3MW side by side in each location to improve development efficiency."
Following the decline in the sales unit price, solar power generation systems are shifting toward self-consumption types constructed on the sites of consumers or large-scale on-field plants larger than several tens of MW to 100MW, aiming for cost reductions, which is a global trend, and the domestic trend was roughly the same.
However, in Japan, large project sites suitable for development of extra-high-voltage projects are limited, while the development environment for large-scale projects is becoming severer due to restrictions including the three-year limit for the start of operation and the bidding system. Based on this background, it is possible that construction of low-voltage plants of around 50kW for business use, as well as concentration of high-voltage plants of around 2MW in nearby areas will be accelerated. The new certification situation in fiscal 2017 is attracting a great deal of attention from people who want to understand the trend.
In case a significant drop is confirmed in the equipment certifications including high-voltage projects in fiscal 2017, people will think the stagnation problem in the development of new solar power plants in Japan is "attributable to restrictions in local grid connection, rather than the cost," because it is often said that "development projects can be worked out even at 21 yen/kWh, but connection to the grid is impossible."