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Sunday, March 11, 2018, 16:48
Electric power shift to local generation, use
By The Japan News/ANN
Sunday, March 11, 2018, 16:48 By The Japan News/ANN

These solar panels are a key power source for self-power management and distributed-type in Higashimatsushima, Miyagi Prefecture, Japan. (PHOTO / THE JAPAN NEWS)

TOKYO - This localized approach aims to use electricity generated by sunlight and wind power and ensure electricity supplies are available in the event of a major earthquake or other disasters. Efforts to create electricity supplies for smaller areas are popping up in many places. Reinvigorating the local economy by using renewable energy has become a major trend.

These new efforts come in two major types. The first is the “self-power management and distributed-type,” in which distributed power generation facilities and storage batteries are installed and optimized to supply electricity within a designated area. The second is the “regional power producer and supplier” type, in which local solar plants and other facilities that cannot generate enough electricity are augmented by procuring power from the market, and then this electricity is sold at retail to public facilities, private companies and households.

A recent example of the self-power management and distributed type is a project involving Kyushu University, the Fukuoka prefectural government and the Kasuga city government. Solar panels with an installed capacity of about 2,000 kilowatts and storage batteries were set up at the university’s Chikushi campus in Kasuga, Fukuoka Prefecture, and dedicated transmission lines were built underground. The university, and city and prefectural public facilities about two kilometers away from the campus, use electricity generated by these facilities. The project is scheduled to swing into full operation in the spring of 2019.

In the center of this area, there is the prefectural Kasuga Park, which has an area of about 30 hectares. In a disaster, this park will be used as an evacuation area for about 150,000 people. The project will enable the park to receive a supply of electricity that will last for at least three days.
Management and supply of this electricity is handled by Kasuga Blue Energy, a limited liability company staffed mainly by researchers from Kyushu University. Because the Kasuga city office and five prefectural facilities — a police station, high school, child consultation center, park and a multipurpose complex with a pool — have different peak times for using electricity, the company juggles the supply for the entire area and ensures optimal power use to prevent wastage.

The project’s cost comes to about ¥1.7 billion. Two-thirds of the amount required to install major equipment will be covered by an Environment Ministry subsidy intended to help reduce carbon dioxide emissions by public facilities.“This will help preparations for disasters,” said Kyushu University Prof. Tatsuro Harada, 54, who has been in charge of the project. “If users of this solar power can come up with ways to use it with maximum efficiency, it could lead to a regional energy framework that can complement a large electrical power plant.”

New regional power 

The liberalization of the retail power market in April 2016 created what are known as “regional power producers and suppliers.” These operators champion the concept of “local production and local consumption,” and their main clients are local companies. A “power producer and supplier” refers to a power provider other than the nation’s 10 major power utilities. Among these new firms, regional producers and suppliers are oriented toward a certain area and have a compact structure. The Internal Affairs and Communications Ministry and other entities have given these developments a helpful nudge in the belief it will rejuvenate regional economies.

In December 2015, the city government of Yonago, Tottori Prefecture, and several private companies that came together during a survey conducted by the city while it participated in an internal affairs ministry project, established Local Energy Corp. The city government covered 10 percent of the ¥90 million start-up costs, Chukai Cable Television System Operator — a local cable TV company — paid 50 percent and four other local firms chipped in the rest. More than half of Local Energy’s electricity comes from power generated through biomass purchased from the city’s “clean center” garbage incineration plant and power produced from waste-to-energy generation not including raw garbage. In addition, the company buys power from a private mega solar power plant in Yonago and the Japan Electric Power Exchange, an electricity trading exchange.

Local Energy sells electricity at retail to public facilities in about 300 locations, and sells it wholesale to Chukai TV and one other company. These two companies then sell the power at retail to about 6,000 ordinary households and businesses.

Masaki Mori, a managing director at Local Energy, said his company’s approach would bring benefits to the local economy. “Power bills for these public facilities are about 5 percent to 10 percent cheaper than they were when the facilities bought electricity from traditional power utilities,” said Mori, 42. “Our participation in the bidding for supplying electricity to public facilities creates competition among power companies. Even if we don’t win the contract, power bills come down, and that saved money can be kept and used in the region.”

Managed by HOPE 

In some cases, a self-power management and distributed-type company has developed into a regional power producer and supplier.
In Higashimatsushima, Miyagi Prefecture, 1,133 people died or remain missing from the March 2011 Great East Japan Earthquake and tsunami. Two years ago, the city government installed solar panels with an installed capacity of 540 kilowatts on the premises of the city’s Smart Disaster-Prevention Eco-Town, which was built to provide housing for people who lost their homes in the disaster. In addition, lead storage batteries and emergency diesel generators that use biofuel were added. This setup started using a micro-grid to supply power to 85 housing units and four nearby medical facilities.

Higashimatsushima Organization for Progress and Economy, Education, Energy (HOPE), a general incorporated association entrusted to manage the electricity supply facilities and collect power bill payments, also launched a power retail business at about the same time. This electricity comes from excess power generated by the solar panels in the eco-town, and HOPE also buys power from transport and construction companies in Higashimatsushima that have solar power generation facilities in the eco-town and from the power market. It currently sells electricity to 145 public facilities and 143 private companies. It is contracted to supply about 10 megawatts of power.

Crunch time looms

Various types of regional power producers and suppliers receive investment or cooperation and support from local governments. 
 “As far as we know, there are several dozen of them. Although they supply less than 1 percent of electricity sold in terms of volume, this figure is steadily increasing,” said an official of the Environment Ministry’s Climate Change Policy Division.
Many of the nation’s solar and wind power generation facilities were built for the purpose of selling electricity to power companies through the feed-in tariff system for renewable energy sources. The system runs for a fixed term, and a growing number of facilities will reach the end of this term from 2019 and beyond.

Many regional power producers and suppliers want to absorb the power generated by these facilities and expand their business. However, price competition is fierce among the major power utilities, and the large regional power producers and suppliers that entered the market, so will the regional entities survive? Many observers also are closely watching whether fair competition can be ensured through ongoing reforms to the electric power system and other steps.

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