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FIT Tariffs for 'Unoperated' Solar Projects to Lower in Japan

2018/10/18 16:36
Kenji Kaneko, Nikkei BP Intelligence Group, CleanTech Labo
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Reduction of purchasing price, deadline for start of operations as set

The Agency for Natural Resources and Energy of Japan's Ministry of Economy, Trade and Industry (METI) had a meeting of the Subcommittee for Introducing Large Amount of Renewable Energy and Next-generation Power Network Oct 15, 2018.

In regard to measures to deal with projects that were certified in an early stage of the feed-in tariff (FIT) scheme, METI's proposals were announced. According to the proposals, purchasing prices (FIT tariffs) will be lowered under certain conditions, and a "deadline for the start of operation" will be set.

Those measures are targeted at projects that were certified in fiscal 2012 (¥40/kWh), fiscal 2013 (¥36/kWh) and fiscal 2014 (¥32/kWh) and for which a deadline for the start of operation has not been set at the time of shifting to the revised FIT policy. According to a calculation conducted by the Agency for Natural Resources and Energy, the total power generation capacity of those projects is 11-17GW.

For those "unoperated projects," an FIT tariff of two years ago (from the moment of entering the "starting operation preparation period") will be applied. The moment of entering the starting operation preparation period means the day on which a power company (power transmission/distribution company) accepts the application of the start of grid connection work.

If a power company accepts the start of grid connection work by the end of March 2019, the current purchasing price (¥40, 36 and 32) will not be changed. On the other hand, if it is accepted in fiscal 2019 and fiscal 2020, the price will be ¥21/kWh and ¥18/kWh, respectively. In either of the cases, the deadline for the start of operation will be one year.