Renewable Energy Feed-in Tariff Spurs Interest in Developing Japan’s Geothermal Energy Resources

Feed-in tariff sparks renewed interest in geothermal power production in JapanSolar photovoltaic (PV) power generation has garnered the most attention from project developers, large business groups and investors in Japan in the wake of the 2011 tsunami and nuclear power plant disaster and introduction of a national renewable energy feed-in tariff (FiT) last July. Japan also has substantial geothermal energy resources, however, and the renewable energy FiT is spurring interest in development.

At least 21 prospective geothermal power projects are currently under consideration across the island nation, including seven in which the use of small-scale binary turbines is proposed, officials of Japan’s Ministry of Economy, Trade and Industry (METI) told reporters at a briefing on April 9.

Tapping geothermal energy in Japan

Japan is actually the world leader when it comes to the manufacturing of geothermal power turbines and equipment. Nonetheless, geothermal power project development was limited to large-scale projects mostly in the northern Tohoku region of Honshu, the northernmost island of Hokkaido and the southern island of Kyushu prior to the introduction of the renewable energy FiT, according to a Bloomberg News report.

That’s changed since, as renewable electricity providers are paid above-market rates under the FiT. Power utility customers pick up the tab for cleaner, safer renewable electricity.

The 21 geothermal power projects now under consideration is more than double the 17 geothermal power plants now in operation in Japan. These have a total generation capacity of 520 megawatts (MW).

Per the FiT, geothermal energy producers in Japan are paid an attractive 27.3 yen per kilowatt-hour for a plant with a power generation capacity of 15,000 kilowatts or more and 42 yen per kWh for smaller plants for 15 years, according to Bloomberg’s report.

21 prospective geothermal power projects

The total combined power generation capacity of renewable energy facilities that came on-line in Japan between April 1 and December, 2012 rose to 1,178,000 kW, according to Japan’s Agency for Natural Resources and Energy (ANRE).  Solar PV facilities accounted for 1,119,000 kW, the large bulk of which – 911,000 kW – came from installation of solar PV for households.

New wind power (34,000 kW), biomass (22,000 kW), small and medium hyrdopower (3,000 kW) also contributed to Japan’s growing renewable energy generation capacity. No new geothermal power capacity was added during the period, according to the ANRE.

The rush on the part of project developers to install solar PV generation capacity recently prompted regulators to reduce the solar FiT to 37.80 yen/kWh from 42 yen/kWh for commercial customers and 38 yen for household customers in fiscal 2012, which ends March 31. Electricity purchase prices for other renewable energy sources, including geothermal, are to remain the same.

Image credit: Geothermal Resource Council, courtesy flickr

Andrew Burger
Andrew Burger
A product of the New York City public school system, Andrew Burger went on to study geology at the University of Colorado, Boulder, work in the wholesale money and capital markets for a major Japanese bank and earn an MBA in finance.

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