In June 2020 a bill was enacted pursuant to which the Japanese authorities can withhold a portion of payments under a power purchase agreement that will instead be placed in a reserve to cover decommissioning costs. While the final decommissioning regulations have not yet been published, a detailed outline of the regulations was recently published for public comment.
Biomass-fuelled power generation facilities continue to play an important role in Japan's renewable energy portfolio. While the requirements in this respect are complex, interest in biomass renewable energy remains strong. Further, it is anticipated that as the sustainability rules applicable to woody and agricultural biomass fuels are settled, interest and investment in the biomass industry will continue to accelerate. This article provides an overview of the sustainability rules applicable in Japan.
A significant component of the recently approved Proposal to Amend the Electricity Business Act for the Purposes of Establishing a Resilient and Sustainable Electricity System is the nullification of feed-in tariff (FIT) certificates. The Ministry of Economy, Trade and Industry (METI) has recently published a series of notices that provide further clarity on how the nullification will take effect and METI's intention to create exemptions for certain FIT certificate holders.
The Committee on Procurement Price Calculation of the Ministry of Economy, Trade and Industry recently announced a recommendation to set the maximum procurement price that bidders may propose in their development plans for offshore wind renewable energy power generation facilities at Y29 per kilowatt hour. This recommendation reduces the standard procurement price by approximately 20%. The reduction is not expected to affect the pre-tax internal rate of return for developers.
The government recently commenced the first tender process under Japan's new offshore wind law for a floating wind project off the coast of Goto City. This article summarises the key elements of the Occupancy Guidelines for the Goto Offshore Area which, although specific to the Goto project, provide insight as to the Japanese authorities' general approach towards the implementation of the offshore wind law and how the tender processes for the other identified sites will proceed.