PVinsights : Update on the grid connection suspension of PV projects in Japan.

On the 28th of October, the Agency for Natural Resources and Energy in charge for administrating the FIT scheme published a notice to commercial renewable energy operators and developers.


Japan has been experiencing high rates of solar PV deployment since 2013 due to falling costs combined with advantageous policy incentives, but developers are being challenged by rising concerns about the country electricity grid capacities.
On August 8, 2014, Okinawa Electric Power Co. announced the temporary suspension of grid connection approval for renewable energy projects under the FIT scheme. Four more regional electricity distributors made similar announcement in late September: Kyushu Electric Power, Shikoku Electric Power, Tohoku Electric Power and Hokkaido Electric Power. As most projects registering for FIT are solar PV (rather than more stable sources such as geothermal) the companies fear that the surge in new connections will create an important influx of instable electricity that their current electricity grids cannot manage.
The Ministry of Economic, Trade and Industry (METI) in charge of energy policies has established a Working Group in October to examine grid capacities and publish results before the end of the calendar year, but meanwhile grid connection applications for new PV installations above 10 kW remain suspended in those five regions.
On the 28th of October, the Agency for Natural Resources and Energy in charge for administrating the FIT scheme published a notice to commercial renewable energy operators and developers. The notice highlights the fact that the granting of grid connection approvals is entirely under the discretion of the electricity distributors, depending on the capacities of their grid. The notice emphases that a project can receive ministerial approval based on technical eligibility criteria, but still be refused grid connection if the utility firms considered the stability of electricity supply on their grids threatened. Therefore, the government urges developers to engage early in substantial consultation with utility firms while designing their projects.
Furthermore, the government reminds that approval can be cancelled if a project fails to secure land and equipment 180 days after receiving approval. The deadline can be extended to 360 days if the project is waiting for grid connection approval, but not beyond. This can be explained by the number of projects approved but not carried out. Japan has approved about 70 GW solar projects under the FIT scheme since 2010, of which only 15% are currently operating, according to METI.
While the resuming of grid connection approvals in the concerned region remain uncertain for the immediate future, the government sends out a clear message regarding the importance of comprehensive assessment and consultation before project application, while also urging the large number of approved projects to carry on with their realization.

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