Friday, June 17, 2011

No. 68: Is wind power generation promising in Japan? Not really (June 17, 2011)

The pacing of constructing wind power plants is decelerating in Japan. According to the Japan Wind Generation Association, the wind power plants that started to operate in 2010 have a combined generation capacity of 260,000 kW, less than the capacity of the previous year for the first time in the past three years. The accident in the Fukushima Nuclear Power Plant is expected to stimulate the move for more wind power plants, but the reality is different. The new generation capacity of 2010 decreased 13% from the previous year and 35% from 2006 when the construction of wind power plants peaked. There are several reasons for the decelerated pace. The government traditionally subsidized one third of the construction cost of a wind power plant, but it discontinued the subsidy starting 2010. In addition, the bill that obliges electric power companies to purchase renewable energy was submitted to the Diet, but prospects do not look brighter.

Wind generation power companies are mostly not good in financial condition. Japan Wind Development sold its Wakayama Plant to a subsidiary of Osaka Gas. Japan New Energy Explore (JANEX) operating wind power plants in Kyushu decided to put off the plan to construct new wind power plants. Japan has a total wind generation capacity of 2,440,000 kW. The Japan Wind Generation Association projects to increase Japan’s capacity to 1,100,000 kW by 2020. Today, however, winder generation capacity is currently equivalent only to two nuclear power plants.

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