Renova Inc, a venture company that develops renewable energy power generation projects, was listed on the Mothers Section of the Tokyo Stock Exchange in February of this year. The company has been operating or constructing mega (large-scale) solar power plants with about 270MW of output in total at 10 locations and a biomass power generation plant with an output of 20MW. It is also engaged in the development of offshore wind power generation and geothermal power generation.
We interviewed Yosuke Kiminami, president of Renova Inc, and asked about the renewable energies trend in Japan and abroad as well as the company's future business strategies.
Q: Renova started with the development of mega solar power plants and is now also developing biomass, wind power and geothermal power plants, and the business has been expanded to abroad. What is the environment surrounding renewable energies in Japan and abroad, from the viewpoint of the company, which is engaged in a wide range of renewable energy projects?
Kiminami: There are three global topics that have positive impacts on the renewable energy business. The first topic is the strengthening of renewable energy promotion policies in each country responding to the Paris Agreement, which took effect in November 2016. The second is that investors and financial institutions in the private sector have started to move toward "decarbonization" and an increasing number of companies are introducing renewable energies. The third is the dramatic decline in the costs for solar and wind power generation in the Middle East and Europe.
Severe cost reductions strongly impact domestic market
Kiminami: Domestic renewable energy policies are affected by overseas trends, but "significant renewable energy cost reductions" have the strongest impact among the three.
Japan was the 100th country that ratified the Paris Agreement; unfortunately, Japanese investors and financial institutions are not aggressive regarding "decarbonization." Under such circumstances, the bidding price of less than 3 yen/kWh for a mega solar power plant in Abu Dhabi, as well as the power generation cost of 4 yen/kWh for an onshore wind power plant and less than 6 yen/kWh for an offshore power plant in Europe, was a surprise for the domestic market.
Renewable energies were conventionally evaluated by the country and the industry as "energies that are effective as measures against global warming but are high in cost." However, the cost reduction results data from abroad clearly indicates that "renewable energies are no higher in cost."
Figures are convincing, and the country and industry now have to admit that "renewable energies are cost competitive."