RENEWABLES JAPAN STATUS REPORT

CROATIAN CENTER of RENEWABLE ENERGY SOURCES

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RENEWABLES JAPAN STATUS REPORT


Introduction
This report deserves commemoration as the first
Renewable Energy White Paper to be published in
Japan. Following roughly 4 years behind the
establishment of the world renewable energy White
Paper, the Global Status Report (REN21), which
was first published in November 2005 at the
Peking International Conference on Renewable
Energy (BRIEC 2005), in some ways this report’s
delay reflects Japan’s late start in renewable
energy policy and market development.

Renewables have long occupied a branch within
energy policies. However, greater technological
dispersion has helped bring about a global trend in
which exponential growth in renewables is
emerging due to continuous innovation and
decreasing costs. Within the next 10 years
renewables are expected to be able to exceed a 100
trillion yen market becoming a key form of energy
for the 21st
Century in addition to fulfilling
simultaneous roles as a base industry and
providing the core component for time urgent
climate change policy measures.
In this way, a renewable energy revolution has
continued to advance and gain momentum in
recent years. In Japan interest is also finally
heightening regarding the role renewables play in
energy, climate change, and industrial policies.
Supported by effective policies measures such those
from Green New Deal initiatives, which are
occurring in several countries around the world,
and Feed-in Tariff (FIT) schemes, which expanded
from Europe to the rest of the world, renewables
have achieved rapid growth. Such policies have
created conditions in which renewables, such as
wind and solar photolvatic (solar PV), are emerging
more and more as attractive new industries and
markets.
With such goals as the EU’s aim of 20% renewable
energy by 2020 and the Obama administration’s
declaration of 25% electricity from renewables by
2025, a type of “target introduction competition” for
renewables is fast expanding in numerous

countries, regions, and municipalities. Japan can
also be said to have at long last joined in this
competition.
However, Japan’s renewable energy market has
remained in a grounded state due to market
policies for renewable not been sufficiently
examined or implemented. At the 2008 G8
Summit (Toyako Summit), solar PV, only one form
of renewable energy, was finally recognized as an
important candidate for government backed
support. A type of gift was left behind by the
former administration in which a limited FIT
scheme applicable for only surplus electricity
generated from residential, non-business use solar
PV was established in November 2009. However,
the government remains behind in conducting
policy-based examinations for other forms of
renewable electric generation such as wind power,
the use of natural heating, and bio-fuels.
The new administration, which won the general
election in August 2009 and is led by the
Democratic Party of Japan, set several high targets
in its manifesto including a 25% reduction of
greenhouse gases by 2020 based on 1990 levels, the
introduction of a FIT for all quantities and types of
renewables, and increasing the percentage of
renewables as a primary energy source to 10%. It
is hoped that the new administration will show
initiative as a leader by shifting control of energy
policy away from ministry bureaucrats and push
for new measures to deal with renewable energy
and global warming issues.
The publication of Japan’s first ever renewable
energy White Paper was made possible by the
expertise and action accumulated though the
cooperative efforts of various renewable energy
business organizations. It is hoped that this first
publication will help spur rapid development in
Japan’s renewable energy markets, the new
industries supporting these markets, and the
regional societies revitalized by them.

Renewable Policy Landscape
With the submission of its Provisional Basic Law
for Measures against Global Warming in March
2010, the Japanese government is preparing to

declare a target of renewable energy comprising
10% of overall energy supply by 2020. In FY
2003, in a separate policy, Japan established a

renewable portfolio standard (RPS). However,
due to problems such as carrying over surplus
from the previous year’s requirement, utility
businesses have had little incentive to expand
renewable energy. In addition, subsidies
supporting solar PV installation were terminated
by the government. This caused Japan to fall
from first place in the world in solar PV
installations in 2004 and suffer from a declining
market share ever since.
The G8 Summit in 2008, however, triggered
Japan to finally shift its posture, becoming more
proactive in support of solar PV. This resulted in
the introduction of a feed-in tariff (FIT) in
November 2009, although the FIT is limited to
the sale of surplus power generated by solar PV.
The additional reintroduction of subsidies for
solar PV January 2009 also helped stimulate an
increase in solar panel shipments for 2009 of 2.1
times that of the previous year. The latter half
of the year (July~December), which includes the
introduction of the FIT in November, experienced
particularly strong growth with shipments
increasing as much as 3 times that of the previous
year. Such results provide a good example of the
degree in which policies can promote the
introduction of renewables (in this case solar PV).
The ruling Democratic Party of Japan’s manifesto
promises to expand the current FIT to include all
amounts and types of renewables. In order to
effectively spread the use of renewable energy,
following through with such a promise is
desirable.

While policies regarding solar PV have been
examined and implemented in Japan, measures
to expand the use of other renewables have been
left behind. For wind power, problems such as
grid restrictions, coexistence issues of birds and
wind turbines, and social consensus problems
exist. In addition, policies, much less
frameworks, needed to support renewable energy
heating and transportation fuels are also lacking.
In the private sector, there are high expectations
for the smart grid system being introduced by the
Obama Administration. However, solutions
regarding issues such as deregulation and
reduction of grid restrictions remain to be seen.
With Japan entering the first commitment period
established by the Kyoto Protocol, various carbon
credits such as carbon offset, domestic credits,
J-VER, and Tokyo metropolitan credits have been
introduced, crowding the market. While the
environmental value of the utilization of
renewable energy in these markets is promising,

many issues such as harmonization of credits and
establishment of national legislation remain to be
solved.
Among local governments, the Tokyo
metropolitan government is leading Japan’s
environmental energy polices. Tokyo plays a key
role in creating policy models through such
actions as the introduction of an emission trading
scheme and expansion of solar energy. In
addition, Tokyo is initiating policy cooperation in
the metropolitan area as well as creating
practical partnerships with private sectors and
environmental NGOs.
Energy companies such as electric power, gas, and
oil companies are also pursing renewable energy.
Power utilities are planning mega solar power
generation as well as integrating solar heating
technologies in the development of hot-water heat
pump mechanisms. In addition, gas companies
are developing solar heating for apartments that
can be installed on balconies, and oil companies
are entering full-scale into the solar PV market.
The solar PV industry is most the advanced
among Japanese renewable energy industries.
The former administration targeted an increase
of 20 times as many solar PV installations by
2020 and 40 times by 2030. Although other
renewable were given low standing by the
previous administration, it is expected that more
proactive renewable policies will be introduced by
the new government.
Green Power Certificate trading in the private
sector reached 160 GWh in FY 2008 (100%
increase from the previous fiscal year) with
trading expected to be increase further due to the
Tokyo Metropolitan Government’s new cap &
trade market. Green Heat Certificates for solar
hot water systems were also introduced in April
2009 and a similar certifying system for other
heat renewables is being created.
In order to expand the renewable energy market,
it is necessary to provide financial support,
develop infrastructure to encourage participation
by citizens and communities, and establish a new
social system based around social consensus
regarding issues involving windmills such as
birds and scenery, or those between hot springs
and geothermal power.

Trends of Renewable Energy
(1)Electric Power
Changes in trends regarding the electric power
energy market in Japan are described as follows.
As shown in Figure 1, the existing capacity of
renewable power generation reached over
10,000MW at the end of fiscal year 2008, 60% of
which consisted of small hydro under 10,000kW
and biomass (including waste power generation).
Solar PV and wind power accounted for an
estimated 37% at the end of FY 2008. These grew
more than 30% annually from 2000 until 2004,
however, growth has since slowed due to a
discontinuation of subsidies. Although added
power capacity from geothermal and small hydro
has been small since 1990, it accounted for
estimated 35% of the cumulative capacity at the
end of FY 2008.
Increases in waste-power generation, especially
those using general wastes, had led to an overall
increase in biomass power capacity resulting in
biomass providing just under 30% of total capacity
at the end of FY 2008.
The projected amount of power generation in each
fiscal year is shown in Figure 2. This was
calculated by a ratio of facility utilization (i.e. how
much energy is actually produced from facilities)
based on each technology. Although the growth
rate of geothermal power and small hydropower
was low, its utilization rate exceeded 60% on the
average and annual power generation accounted for
more than half of the energy supplied by renewable
energy.

Solar PV and wind power generation had a high
growth rate and accounted for 15% of renewable
energy power generation in FY 2008. Renewable
energy supplied only 3% of the total power
generation in Japan (1,200,000GWh in FY 2007,
including households) which is only 1% increase
since 1990.


In FY 2008, the total renewable energy supply was
7,918GWh while the amount required by the
Renewable Portfolio Standard (RPS), which was
introduced in FY 2003, was 7,465GWh. A surplus
of 6,759GWh was carried over from the previous
fiscal year. Thus, while electrical power suppliers
can meet the RPS requirement, they can also carry
over 7,043GWh for FY 2010. Therefore, it can be
concluded that the current PRS framework does not
create incentives for electric power suppliers to
promote renewable energy.
On the other hand, since the green power
certification system started in FY 2001, the amount
of certified electric power has continued to expand,
with cumulative capacity of certified facilities
reaching 400MW in FY 2008. Annual certified
power exceeded 200GWh in FY 2008 and green
power certificates of more than 160GWh were also
issued in FY 2008.
(a) Solar Photovoltaic (PV) Power Generation
Cumulative installations of solar PV reached


2,198MV, exceeding 2,000MV mark at the end of
FY 2008 in Japan, although the growth rate has
slowed down since FY 2005 when subsidies for
households expired. On the other hand, overseas
shipments of solar PV panels grew steadily and
exceeded domestic shipments in FY 2004. An
estimated 900 MV was shipped abroad in single FY
2008 (four times as much as the total amount
shipped domestically).


(b) Wind Power Generation
Japanese wind power generation started in 1980,
but began in full-force with the introduction of
1,000kW generating systems in 1999. Since then,
the construction of new large-scale wind farms
have allowed for total generation capacity to reach
more than 10,000kW.
By the end of FY 2008, 1,517 wind turbines were
installed with capacity of 1,853.6MW. However,
reaching the national target of 3,000MV added by
2010 appears unlikely without any support from
the government.
Many wind turbines have been installed in
Hokkaido, Tohoku, and Kyushu where the wind
conditions are desirable. However, recruitment
for new installation is limited because grid
connection capacity is constrained. Applicants
need to draw lots or take bids. Furthermore,
various restrictions on location, the amendment to
the building code in 2008, and global increasing
demand on wind power plants have added burden
on wind power industries. As a result, in terms of
single year basis, additional installations were
stagnating.


(c) Small Hydropower Generation
Small hydropower capacity with 10,000kW or less
was 3,225MW (1198 plants) at the end of FY 2008,
accounting for 6.6% of the total hydropower
capacity in Japan. Most domestic small
hydropower plants were built before 1990, and only
127 plants accounting for a total capacity of
166MW were constructed after 1990. Individually,
most of these facilities produce less than 1000kW so
they are subject to the Renewable Portfolio
Standard.
(d) Geothermal Power Generation
Since the first operation of geothermal power
generation started in 1966, geothermal power
capacity has remained around 550MW. When
geothermal development gained momentum after
the oil crisis in the 1970’s, geothermal power
equipment was installed by private initiatives.
Since 1990, installations had been promoted by
various subsidies provided by the government.
However, since 1999 when the last facility was
introduced in Hachijo Island, geothermal has not
been developed further, leading the current decade
to be called the "lost decade". Most geothermal
power is not regarded as renewable energy, nor
applicable to Renewable Portfolio Standards. In
recent years, reviews on the geothermal power
generation have once again started with
geothermal beginning to drawing attention due to
the huge resource potential and growth of domestic
industry.
(e) Biomass Power Generation
There are various sources used for fuel in biomass
power generation including wood originated from
forests, food and livestock, industrial waste such as

architectural scraps and general waste such as food
waste. Biomass power is generated from direct
combustion, gasification or methane fermentation
of biomass. Cumulative domestic capacity
increased 750% (from 1990 level) to 3,138MW by
the end of FY 2008. Power generation from
general waste accounted for 55% with industrial
waste supplying 40%, making up 95% of biomass
power generation in Japan. In addition, most of
the biomass facilities have been certified by Japan’s
RPS. Power generation from woody biomass of
forest remained about 4% making cascade
utilization of forestry biomass through the
promotion of forest industry and active use of
domestic lumber highly expected. Evaluation of
both the sustainability and reduction effects of CO2
according to different types of biomass sources has
proven difficult, making the development of a fair
evaluation method greatly needed in order to
support the implementation of other systems such
as emissions trading.
(2) Heat
Generally, there are three types of renewable
heating markets. Solar heating is the most
popular. The second type is geothermal heating
which includes heat from ground sources. This
type is familiar to the public as a source for hot
springs. The third is biomass heat which uses
forestry resources. However, other than solar
heating, there is very little domestic statistical
information and data in order to determine how
many heating systems have been installed.
(a) Solar heating
Solar hot water capacity increased in the 1980's
after the oil crisis, however, declines in product
reliability stemming from quality issues of these
generation systems caused a decline in sales.
Recently however, development of new technologies
allowing for the combination of solar heating with
other heating sources has led to resurgence in
expectations for its use as these systems can be
employed not only for households, but also for
businesses.
The solar heating market emerged in the 1970’s
after the oil crisis. Sales reached a peak in 1980,
with more than 800,000 solar hot water systems
(≒1680MWth) and about 26,000 (≒17.5MWth)
solar heating systems installed. However, the

market shrank to less than one tenth of the peak,
with 60,000 solar hot water and 4,700 solar heating
systems installations in 2008. As a result the total
capacity of solar heating, which is determined by
deducting the depreciation of the systems from the
cumulative installations, has continued to decline
since 1994.
(b) Geothermal
The traditional use of hot springs for bathing is
regarded as a usage of geothermal heat. Hot
springs can reduce the usage of fossil fuels as
substitutes for heating bath water. The use of
geothermal heat, which tends to have stable
temperatures, can help improve the energy
efficiency of air conditioning, heating, and supply of
hot water.
(c) Biomass
Traditionally, firewood has been included as a
biomass resource. However, in its consideration of
biomass, this report assumes the use of sources
such as wood pellets and wood chips in special
burning appliances. Large scale boilers which use
biomass resources in paper manufacturing
companies, as well as CHP (combined heat and
power) systems are also considered in this research.
Nevertheless, it is difficult to estimate the amount
of energy generated from these means as the most
of the heat generated is consumed in the
manufacturing process.
(3) Fuels
The bio-fuel target of 500,000kl to be used for
transportation by 2010 was included in the Kyoto
Protocol Target Achievement Plan, which was
determined by the cabinet ministry in 2005.
Nevertheless, domestic ethanol production was
only 30kl in 2006, 90kl in 2007 and 200kl in 2008.
While biodiesel production was 10,000kl in 2007,
its main component waste vegetable oil is also used
in feedstock, industrial manufacturing, and boiler
fuels leading to an estimated demand of 100,000kl.
However, sales of electric vehicles (EV) expected to
use renewable energy started in 2009, leading to a
potential increase in attention surrounding
bio-fuels.

：Long-term Scenario
“Renewable energy vision in 2050” which adopts
Japan’s long term energy vision was published by
“Japan Renewable Energy Policy Platform”
(JREPP), an organization established in July, 2008
among renewable energy related organizations.
This vision examines the potential of renewable
energy, particularly as a center of “innovation” in
regard to the possibility of Japan establishing its
own targets as well as contributing toward climate
change measures.
For the study, a goal of 75% reduction in CO2
emissions originating from energy use (based on
2000 levels) and the domestic development of 50%
of Japan’s energy needs by 2050 was assumed.
The results of the study showed the potential for
renewable energy to be responsible for 67% of
domestic electric demand and more than 50% of
primary energy supply. In order to achieve this
long-term vision, it is essential to establish a
long-term high numerical target and political
commitment as well as the inclusion of external
costs such as those caused by climate change.

In order to achieve this vision, JREPP is creating
policy recommendations, to help establish a
transparent and stable “renewable energy market”
which can reduce the financial risk of renewable
energy business for the long term by introducing
feed in tariffs.

：Regional Potential & Implementation
Although only 4% of energy is domestically
supplied in Japan, certain regions have the
potential to supply abundant amounts of renewable
energy.
Data from the “Energy Sustainable Zone” report
(2008) shows that 11 prefectures including Oita,
Akita and Toyama supplied more than 10% of their
energy demand in consumer (household & business,
excluding industry and transportation) and
agricultural sectors from renewables. 6
prefectures supplied more than 10% of their
demand in electricity and heat of consumer and
agricultural sectors. Furthermore, an estimated
50 municipals supply their municipal energy
demand (both power and heat) in consumer and
agricultural sectors with renewable energy only,
with 100% or more of the energy self- supplied
(Figure 6).
In comparison, the energy self-sufficiency ratio for
big cities such as Tokyo and Osaka is very low at
less than 1%. It is therefore necessary for these
cities to deepen cooperation with regions where
renewable energy is available or abundant in order
to increase their development and use of renewable
energy.

As for the potentiality of regional installations,
examination of the feasibility and estimated
generation capacities of solar PV, wind power, and
geothermal power have been conducted. In
addition, the suitability of these locations as well as
their social and economic limitations is also
becoming clearer from studies conducted by the
Ministry of Environment and other organizations.
For renewables other than solar PV, policies
supporting introduction which match the
particularities of each region and focus on factors
such as reinforcing the regional power operation
systems are needed. The results of each the
studies carried out are currently being used base
material for regional renewable energy
introduction plans.




“Renewables Japan Status Report 2010, Executive Summary”
Producers：“Japan Renewable Energy Policy Platform” (JREPP) http://www.re-policy.jp/
Editing：Independent, Non-Profit Research Organization,
Institute for Sustainable Energy Policies (ISEP) http://www.isep.or.jp/
Editors：Hironao Matsubara, Akira Urai and Noriaki Yamashita
Translators：Erik Jensen and Yuka Ueno
Published：March 12th
, 2010 (revised on March 26) English version: April 27th
, 2010
Cooperation：“Biomass Industrial Society Network”
※This report is made possible with the financial support of Mitsui & Co., Ltd. Environment Fund, UK
Foreign and Commonwealth Office Strategic Programme Fund and Japan Fund for Global
Environment.
What is Japan Renewable Energy Policy Platform (JREPP)？
JREPP is a voluntary association established on July 1st
, 2008 by several renewable energy related
organizations and aims to implement sustainable renewable energy policies for the development of a
low carbon society. In order to accomplish this goal, JREPP provides policy analysis and advice on
renewable energy.
Participating organizations (as of March, 2009)：Japanese Association for Water Energy Recovery,
Japanese Wind Power Association(JWPA), Wind Power Developer Association(WPDA), Solar System
Development Association, Japan Geothermal Developers’ Council, The Geothermal Research Society of
Japan, Research Committee on Climate Change Measures in Architectural Institute of Japan, Japan
Wood Pellet Association, Institute for Sustainable Policies
※Disclaimer：The views expressed in this report do not necessarily reflect the position of the
organizations participating in JREPP. Although information given in this report is the best available to
the authors at the time, JREPP cannot be held liable for its accuracy and correctness. The report is
subject to revision in the future.
More info at http://solarserdar.blobspot.com.

CROATIAN CENTER of RENEWABLE ENERGY SOURCES ( CCRES )