Japan Mulls Solar Auctions in Overhaul of Renewables Incentives

(Bloomberg) — A Japanese government task force is
considering auctioning as a way to manage the awarding of solar
projects amid an overhaul of an incentive program to encourage
clean energy.

The auction system is one option under consideration by a
panel set up by the Ministry of Economy, Trade and Industry to
review the country’s incentive program for renewable energy. The
program began in July 2012 to diversify the country’s energy
sources.

So far, most of the clean energy added under the program
has been solar, although the program covers other sources such
as wind and geothermal. Some utilities say their transmission
lines are being overwhelmed with requests for grid connections
from solar developers.

Under the current system, the government sets a tariff
every year to reflect a drop in system prices. The ministry
panel, which includes several academics, on Tuesday debated
several options for solar projects.

One option is to hold auctions, giving approval to
developers who offer the lowest price. Another option under
consideration is cutting the tariff that developers receive for
their output at a set rate or in accordance with installations.

“I am under the impression that a fair number of people
support auctioning while there are details we need to look at
more closely,” Kenji Yamaji, head of the ministry panel and
director-general of the Research Institute of Innovative
Technology for the Earth, said at Tuesday’s meeting.

To contact the reporter on this story:
Chisaki Watanabe in Tokyo at
cwatanabe5@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Iain Wilson, Abhay Singh

About BloombergNEF

BloombergNEF (BNEF), Bloomberg’s primary research service, covers clean energy, advanced transport, digital industry, innovative materials and commodities. We help corporate strategy, finance and policy professionals navigate change and generate opportunities.

Available online, on mobile and on the Terminal, BNEF is powered by Bloomberg’s global network of 19,000 employees in 176 locations, reporting 5,000 news stories a day.
 
Sign up for our free weekly newsletter →

Want to learn how we help our clients put it all together? Contact us