Renewables 101: Mandate. Subsidize. Repeat.

by Drew Thornley

The flowchart of renewable-energy policy, here and worldwide, is quite simple: Legislate the use of a certain amount of renewable energies, have taxpayers pay to keep them in business, and repeat as much as needed. In the wake of Fukushima, Japan has no plans to depart from greening as usual. The WSJ reports (emphasis mine),

Japan’s parliament is set to approve a landmark bill on renewable energy that was championed by Prime Minister Naoto Kan as a way to reduce the nation’s dependence on nuclear power, and which would break the monopoly of the 10 major utilities.

Mr. Kan has predicted the legislation would spark “explosive growth” in solar and wind power. He made a commitment to raise the share of renewable energy to at least 20% of total power supply by early 2020s.

The main feature of the bill is a requirement that utilities purchase power from outside providers, such as private companies or cooperatives, under certain circumstances. This rule is seen as opening the door for much greater use of alternative energy sources, an area where Japan lags, accounting for just 9% of total supply.

The legislation, known as a feed-in-tariff law, puts the industry minister in charge of setting the prices at which utilities are obliged to purchase electricity from renewable-power generators.

Big manufacturers, already hurt by power shortages and the effects of the high yen on exports, are expected to face higher electricity bills as a result.

But even with the new legislation, Hisashi Hoshi, an analyst at the Institute of Energy Economics, Japan, said “achieving the [20%] target will not be easy without offering generous incentives.”

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