x Abu Dhabi, UAESaturday 22 July 2017

Green fuel a big winner in fall out from Fukushima

Wind, sun, tidal, thermal - one legacy of the Fukushima nuclear disaster is a surge in interest in Japan in all things renewable within the energy industry.

Wind, sun, tidal, thermal - one legacy of the Fukushima nuclear disaster is a surge in interest in Japan in all things renewable within the energy industry.

A rush of technology firms and investors are exploring a range of green energy projects, tapping into the anti-nuclear sentiment that remains strong across Japan.

The renewable energy sector was given a significant boost last year with the launch of a government feed-in tariff, which resulted in subsidies for companies investing in the sector.

This month, there was more good news on the horizon for the renewables industry when Shinzo Abe, the prime minister, pledged to invest ¥30 trillion (Dh1.11tn) into Japan's electricity industry to boost competition and fuel renewable projects.

The announcement sent shares tumbling among utility companies, in particular Tokyo Electric Power Company (Tepco), the owner of the Fukushima reactors at the centre of the 2011 nuclear disaster.

The investment is part of a wide-reaching plan by Mr Abe to oversee a major revamp of the electricity industry in Japan, with the aim of weakening the current energy monopoly held by 10 regional utility companies to increase competition and help revitalise the world's third-largest economy.

As much as 98 per cent of the nation's electricity is supplied by these 10 politically entrenched companies, which were set up during the American occupation in 1951 post-Second World War Japan and have until now resisted attempts at liberalisation.

"For 60 years after the war, one giant power company in each region has dominated from power generation to transmission to retail," Mr Abe says.

"The times are changing. We are in the age where consumers themselves produce power."

Last month, Mr Abe's plan to reform the energy industry swung into action when a proposal to create a new body in 2015 to coordinate power supply and demand was passed by a government lower house committee.

If Mr Abe is successful in his long-term vision of breaking the traditional power dynamic of Japan's energy industry - which will be dependent on the ruling Liberal Democratic Party winning this month's upper house elections - it will open the floodgates for a number of enterprising private companies to develop renewable energy projects.

Companies most likely to become major new players in Japan's future energy scene include Marubeni, which is involved in a string of green energy investments, among them high-profile plans to set up the world's first floating wind turbine off the coast of Fukushima.

The first tests for the innovative project 20km off the coast, and which aims to contribute to Fukushima's attempts to reinvent itself as a renewable energy hub, began last week.

Another company set to benefit is Softbank, a leading mobile phone services provider, which is planning a series of huge solar plants across Japan, while Lawson, a convenience store operator, has also installed solar panels on the roofs of 1,000 of its outlets.

Such projects have prompted analysts to predict the nation's current 7.4 gigawatts of installed solar capacity will double this year - with the expectation that Japan may not be long off becoming the world's largest solar power market after China.

Renewables are not without their critics, who foresee energy costs as higher in comparison with nuclear or fossil fuels such as coal, oil or gas, resulting in a subsequent hike in electricity bills for consumers.

But in the wake of Fukushima, the public appetite for non-nuclear fuel is far from being sated.

 

business@thenational.ae