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Renewables Japan Status Report 2009
Japan Renewable Energy Policy Platform (JREPP)

RENEWABLES JAPAN STATUS REPORT 2009EXECUTIVE SUMMARY
Chapter 1： Overview
In Japan, renewable energy is finally beginning togain attention as a key element in energy, climatechange and industrial policy with renewable energy
such as wind power and solar photovoltaic (PV)emerging as an attractive new industry and market.
This is attributed to the “Green New Deal” policy
which has been undertaken in countries around theworld, as well as other effective policies such as
Feed-in Tariff which was initiated in Europe andexpanded to the rest of the world.
Many national, regional and local governments
have been setting targets as if they are competingwith each other. For example, Europe establisheda target for 20% share of energy consumption fromrenewables
by
2020,
while
the
Obama
administration pledged that 25% of electricity
should come from renewable sources by 2025.
These policies placed pressure on the former Aso
administration in Japan resulting in theestablishment of a target of“20% renewable energy
by 2020” (the share of energy consumption provided
by renewables).

However, renewable energy policies have not been
fully examined nor implemented at the "policy
market" level and the Japanese renewable energy
market has yet to grow. While the G8 Toyako
Summit in 2008 triggered the Japanese
government to prioritize political support for solarPV, other renewable energy such as wind power,
heating and transport fuels have yet to receive
through political analysis.
The new administration led by the Democratic
Party, which took over as the result of the generalelection in August 2009, has called for a “25%reduction from 1990 levels" and “Feed-in Tariffs
applicable for all technologies as well as the entire
amount of energy produced" in its manifesto. It
also established the high goal of introducing
renewable energy. However, whether the newadministration can change energy policies draftedby Ministry officials (Kasumigaseki) and whether it
can introduce renewable energy and global
warming policies with political initiative remains tobe seen.

Chapter 2： Renewable Policy Landscape
Both national and local governments have
improved renewable energy polices drastically inJapan.
Since last year when the financial crisis caused aworldwide recession, a “Green New Deal” which
focuses on renewable energy in order to tackle
economic, climate and energy crisis, has been
examined. The Japanese government decided toallocate 1 trillion yen in the supplementarybudget of “Economic Crisis Measures” to spur a
low carbon revolution. Nevertheless, aspects
needed to help transform the “social framework”
and structure of society into a low carbon society
are not included in this budget.
Since 2004, solar PV market has been growing
rapidly all over the world, especially in Germany.
Japan slipped from first place in solar PV
installations in the world, resulting in a shrinkingof its market in contrast to the global trend. The
G8 summit in 2008 triggered the government tochange its position to support solar PV morepositively. In addition, the ruling and opposition
parties as well as Ministry of the Environment

proposed a Feed-in Tariff (“FIT”), causing the
Ministry of Economy, Trade and Industry, which
had formerly opposed an FIT, to finally change its
position and disclose the introduction of FIT.
Although the fast implementation of the FIT
signaled a positive change in renewable energy
policy, it needs to be further reviewed since it does
not correspond with the new administration’s
manifesto.
Other than solar PV, the renewable energy
market has not matured yet. Wind power has
some issues such as grid restriction or social
consensus on “how windmills can coexist withbirds”.
In addition, there is no policy, or
framework to support the renewable heating
market and renewable transportation fuels.
Although the expectations by private sectors
concerning the smart grid proposed by the Obamaadministration are quite high, development tosolve the issues such as the regarding reduction ofgrid restrictions remains to be seen.
With the first commitment period set by the
Kyoto protocol approaching, various carbon
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Renewables Japan Status Report 2009
Japan Renewable Energy Policy Platform (JREPP)
credits such as carbon offset, domestic credits,
J-VER, and Tokyo metropolitan credits have been
introduced. While the environmental value of inthese renewable markets is promising, issues
such as harmonization of credits andestablishment of legal systems remain to besolved.
Among
local
governments,
the
Tokyo
metropolitan government is leading Japan’senvironmental energy polices. It plays a key roleand is creating policy models in importantenvironmental energy fields by introducing
emissions trading and promoting solar energy.
In addition, Tokyo is initiating policy cooperationin the metropolitan area as well as practicalpartnerships
withprivatesectorsandenvironmental NGOs.
Energy companies such as electric power, gas oroil companies are also pursing renewable energy.
Power utilities are planning mega solar power
generation as well as integrating solar heating
technologies in the development of hot-water heatpump mechanisms. In addition, gas companies
are developing solar heating for apartmentbalconies, and oil companies are entering
full-scale into the solar PV market.

Japanese renewable energy industries, since theprevious administration did not encourage
renewable energy other than solar PV. The
former administration targeted an increase of 20
times as many solar PV installations by 2020 and
40 times by 2030.
Now that the newadministration has been established, it isexpected that more active renewable policies will
be introduced.
Green Power Certificate trading by private
sectors reached 160 GWh in FY 2008 (twice thatof the previous fiscal year) and will be further
promoted by the new market which the Tokyo
Metropolitan Government plans to introduce.
Green Heat Certificates for solar hot water
systems were also introduced in April 2009 and asimilar certifying system for other heat
renewables is being prepared.
To expand the renewable energy market, it isnecessary to provide financial support, develop
infrastructure to encourage participation by
citizens and communities, and establish a newsocial system on the basis of the social consensus
regarding issues surrounding windmills such as
birds and scenery, or those between hot springsand geothermal power.

The solar PV industry is most advanced among

Chapter 3： Trends of Renewable Energy(1)Electric Power
Changes in trends regarding the electric power
energy market in Japan are described as follows.
As shown in figure 1, the existing capacity of
renewable power generation reached over
10,000MW at the end of fiscal year 2008, 60% of
which consisted of small hydro under 10,000kW
and biomass (including waste power generation).
Solar PV and wind power accounted for an
estimated 37% at the end of FY 2008. These grew
more than 30% annually from 2000 until 2004,
however, growth has since slowed due to a
discontinuation of subsidies in 2005. Although
added power capacity from geothermal and smallhydro has been small since 1990, it accounted for
estimated 35% of the cumulative capacity at theend of FY 2008. Increases in waste-power
generation, especially those using general wastes,
have led to an overall increase in biomass power
capacity resulting in biomass providing just under
30% of total capacity at the end of FY 2008.

by a ratio of facility utilization (i.e. how muchenergy isactually produced from facilities) based on eachtechnology. Although the growth rate ofgeothermal power and small hydropower is low, its
utilization rate exceeds 60% on the average andannual power generation accounts for more thanhalf of the energy supplied by renewable energy.
Solar
PV and wind power generation had a high growthrate and accounted for 15% of renewable energy
power generation in FY 2008. Renewable energy
supplied only 3% of the total power generation in
Japan (1,200,000GWh in FY 2007, including
households) which is only 1% increase since 2000.

The projected amount of power generation in eachfiscal year is shown in Figure 2. This is calculated
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Renewables Japan Status Report 2009
Japan Renewable Energy Policy Platform (JREPP)
exceeded domestic shipments in FY 2004. An
estimated 900 MV was shipped abroad in single FY
2008 (four times as much as the total amountshipped domestically).

Figure 1 Cumulative Renewable Power Capacity inJapan (ISEP)

Figure 3 Shipment Volume of Solar PV (from JPEA
data)(b) Wind Power Generation

Figure 2 Estimated Renewable Power Generationin Japan (Survey by ISEP)In FY 2008, the total renewable energy supply was
7,918GWh while the amount required by the
Renewable Portfolio Standard (RPS) which wasintroduced in FY 2003 was 7,465GWh. A surplus
of 6,759GWh was carried over from the previous
fiscal year. Thus, while electrical power suppliers
can meet the RPS requirement, they can also carryover 7,043GWh for FY 2010. Therefore, it can beconcluded that the current PRS framework does notcreate incentives for electric power suppliers topromote renewable energy.
On the other hand, since the green power
certification system started in FY 2001, the amountof certified electric power has continued to expand,with cumulative capacity of certified facilities
reaching 400MW in FY 2008. Annual certified
power exceeded 200GWh in FY 2008 and green
power certificates of more than 160GWh were also
issued in FY 2008.

Japanese wind power generation started in 1980,
but began in full-force with the introduction of
1,000kW generating systems in 1999. Since then,the construction of new large-scale wind farms
have allowed for total generation capacity to reachmore than 10,000kW.
By the end of FY 2008, 1,517 wind turbines were
installed with capacity of 1,853.6MW. However,reaching the national target of 3,000MV added by2010 seems unlikely without further initiatives.
Many wind turbines have been installed in
Hokkaido, Tohoku, and Kyushu where the windconditions are desirable. However, recruitment
for new installation is limited because gridconnection capacity is constrained. Applicantsneed to draw lots or take bids. Furthermore,various restrictions on location, the amendment tothe building code in 2008, and global increasing
demand on wind power plants have added burden
on wind power industries. As a result, in terms of
single year basis, additional installations are now
stagnating.

(a) Solar Photovoltaic (PV) Power Generation
Cumulative installations of solar PV reached2,198MV, exceeding 2,000MV mark at the end of
FY 2008 in Japan, although the growth rate has
slowed down since FY 2005 when subsidies forhouseholds expired. On the other hand, overseas
shipments of solar PV panels grew steadily and
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Renewables Japan Status Report 2009
Japan Renewable Energy Policy Platform (JREPP)

2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0

Annualy Added Capacity [MW]Existing Capacity [MW]1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
FY

Figure 4 Wind Power Capacity, Added and Existing(JWPA)(c) Small Hydropower Generation
Small hydropower capacity with 10,000kW or lesswas 3,225MW (1198 plants) at the end of FY 2008,
accounting for 6.6% of the total hydropower
capacity in Japan. Most domestic smallhydropower plants were built before 1990, and only
127 plants accounting for a total capacity of
166MW were constructed after 1990. Individually,
most of these facilities produce less than 1000kW sothey are not subject to the Renewable Portfolio
Standard.
(d) Geothermal Power Generation
Since the first operation of geothermal power
generation started in 1966, geothermal power
capacity has remained around 550MW. Whengeothermal development gained momentum after
the oil crisis in the 1970’s, geothermal power
equipment was installed by private initiatives.
Since 1990, installations had been promoted byvarious subsidies provided by the government.
However, since 1999 when the last facility was
introduced in Hachijo Island, geothermal has notbeen developed further, leading the current decade
to be called the "lost decade". Most geothermal
power is not regarded as renewable energy, norapplicable to Renewable Portfolio Standards. In
recent years, reviews on the geothermal power
generation have once again started withgeothermal beginning to drawing attention due tothe huge resource potential and growth of domestic
industry.
(e) Biomass Power Generation
There are various sources used for fuel in biomass
power generation including wood originated fromforests, food and livestock, industrial waste such asarchitectural scraps and general waste such as foodwaste. Biomass power is generated from direct
combustion, gasification or methane fermentationof biomass. Cumulative domestic capacity
increased 750% (from 1990 level) to 3,138MW by
the end of FY 2008. Power generation fromgeneral waste accounted for 55% with industrial
waste supplying 40%, making up 95% of biomass
power generation in Japan. In addition, most of
the biomass facilities have been certified by Japan’s
RPS. Power generation from woody biomass offorest remained about 4% making cascade
utilization of forestry biomass through thepromotion of forest industry and active use ofdomestic lumber highly expected. Evaluation ofboth the sustainability and reduction effects of CO2
according to different types of biomass sources has
proven difficult, making the development of a fairevaluation method greatly needed in order tosupport the implementation of other systems suchas emissions trading.
(2) Heat
Generally, there are three types of renewable
heating markets. Solar heating is the mostpopular. The second type is geothermal heating
which includes heat from ground sources. This
type is familiar to the public as a source for hot
springs. The third is biomass heat which uses
forestry resources. However, other than solar
heating, there is very little domestic statisticalinformation and data in order to determine how
many heating systems have been installed.
(a) Solar heating
Solar hot water capacity increased in the 1980's
after the oil crisis, however, declines in productreliability stemming from quality issues of thesegeneration systems caused a decline in sales.
Recently however, development of new technologies
allowing for the combination of solar heating withother heating sources has led to a resurgence in
expectations for its use as these systems can be
employed not only for households, but also forbusinesses.
The solar heating market emerged in the 1970’s
after the oil crisis. Sales reached a peak in 1980,
with more than 800,000 solar hot water systems(≒1680MWth) and about 26,000 (≒17.5MWth)solar heating systems installed. However, themarket shrank to less than one tenth of the peak,with 60,000 solar hot water and 4,700 solar heating
systems installations in 2008. As a result the total
capacity of solar heating, which is determined byRenewables Japan Status Report 2009

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Renewables Japan Status Report 2009
Japan Renewable Energy Policy Platform (JREPP)
deducting the depreciation of the systems from thecumulative installations, has continued to decline
since 1994.
(b) Geothermal
The traditional use of hot springs for bathing isregarded as a usage of geothermal heat. Hot
springs can reduce the usage of fossil fuels as
substitutes for heating bath water. The use ofgeothermal heat, which tends to have stabletemperatures, can help improve the energy
efficiency of air conditioning, heating, and supply of
hot water.
(c) Biomass
Traditionally, firewood has been included as abiomass resource. However, in its consideration of
biomass, this report assumes the use of sources
such as wood pellets and wood chips in special
burning appliances. Large scale boilers which use
biomass resources in paper manufacturing
companies, as well as CHP (combined heat andpower) systems are also considered in this research.
Nevertheless, it is difficult to estimate the amountof energy generated from these means as the mostof the heat generated is consumed in the
manufacturing process.
(3) Fuels
The bio-fuel target of 500,000kl to be used fortransportation by 2010 was included in the Kyoto
Protocol Target Achievement Plan, which was
determined by the cabinet ministry in 2005.
Nevertheless, domestic ethanol production was
only 30kl in 2006, 90kl in 2007 and 200kl in 2008.
While biodiesel production was 10,000kl in 2007,
its main component waste vegetable oil is also usedin feedstock, industrial manufacturing, and boiler
fuels leading to an estimated demand of 100,000kl.
However, sales of electric vehicles (EV) expected touse renewable energy started in 2009, leading to apotential increase in the attention in bio-fuels.

Chapter 4：Long-term Scenario“Renewable energy vision in 2050” which adopts
Japan’s long term energy vision was published,among other renewable energy relatedorganizations, by “Japan Renewable Energy Policy
Platform” (JREPP), an organization established in
July, 2008. This vision examines the potential ofrenewable energy, particularly as a center of“innovation” in regard to the possibility of Japanestablishing its own targets as well as contributing
toward climate change measures.
For the study, a goal of 75% reduction in CO2emissions originating from energy use (based on
2000 levels) and the domestic development of 50%
of Japan’s energy needs by 2050 was assumed.
The results of the study showed the potential forrenewable energy to be responsible for 67% ofdomestic electric demand and more than 50% ofprimary energy supply. In order to achieve thislong-term vision, it is essential to establish along-term high numerical target and politicalcommitment as well as the inclusion of externalcosts such as those caused by climate change.

In order to achieve this vision, JREPP is creating
policy recommendations, to help establish atransparent and stable “renewable energy market”
which can reduce the financial risk of renewableenergy business for the long term by introducing
feed in tariffs.

Figure 5 Share of Power Generation by
Technologies in 2050

Chapter 5：Regional Implementation and Its Potential
Although only 4% of energy is domesticallysupplied in Japan, according to a study entitled“Energy Sustainable Zone” abundant energy is
being supplied in prefectures, cities andmunicipalities.
Each regional renewable energy supply which data
was collected in 2008 shows that 11 prefectures
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Renewables Japan Status Report 2009
Japan Renewable Energy Policy Platform (JREPP)
including Ohita, Akita and Toyama supplied morethan 10% of the energy demand in consumer andagricultural sectors. 6 prefectures supplied morethan 10% of demand of electricity and heat fromrenewables. Furthermore, an estimated 50
municipals supply their municipal energy demand(both power and heat) with renewable energy only,with 100% or more of the energy self- supplied(figure 6).
In comparison, the energy self-sufficiency ratio for
big cities such as Tokyo and Osaka is very low atless than 1%. It is therefore necessary for thesecities to deepen cooperation with energy
self-sufficient regions in order to increase theirdevelopment and use of renewable energy.
As for the potentiality of regional installations, thefeasibility and estimated amount of renewableenergy which could be supplied by installations ofsolar PV, wind power, hydro or geothermal power
are also examined.
The findings of these studies are published as
evidence for recommendations to promoterenewable energy.

100% Energy Sustainable Zone
(FY2008)

Figure 6
EnergyMunicipals with 100% Self Supplied“Renewables Japan Status Report 2009, Executive Summary”
Producers： “Japan Renewable Energy Policy Platform” http://www.re-policy.jp/
Editing：Independent, Non-Profit Research Organization, Institute for Sustainable Policies (ISEP)
http://www.isep.or.jp/
Editors：Hironao Matsubara, Akira Urai and Noriaki Yamashita
Published：October 1st, 2009 (English version: February 1st, 2010)
Cooperation： “Biomass Industrial Society Network”※This report is made possible with the financial support of the Mitsui & Co., Ltd. Environment Fundand UK Foreign and Commonwealth Office.
What is Japan Renewable Energy Policy Platform (JREPP)？
JREPP is a voluntary association established on July 1st, 2008 by several renewable energy relatedorganizations and aims to implement sustainable renewable energy policies for the development of alow carbon society. In order to accomplish this goal, JREPP provides policy analysis and advice on
renewable energy.
Participating organizations (as of March, 2009)：Japanese Association for Water Energy Recovery,
Japanese Wind Power Association(JWPA), Wind Power Developer Association(WPDA), Solar System
Development Association, Japan Geothermal Developers’ Council, The Geothermal Research Society ofJapan, Research Committee on Climate Change Measures in Architectural Institute of Japan, Japan
Wood Pellet Association, Institute for Sustainable Policies※Disclaimer ： The views expressed in this report do not necessarily reflect the position of theorganizations participating in JREPP. Although information given in this report is the best available tothe authors at the time, JREPP cannot be held liable for its accuracy and correctness. The report issubject to revision in the future.

Renewables Japan Status Report 2009
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