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Renewable energy use must not result in excessive financial burdens

It is important for solar, wind and other renewable energy sources to be widely used at affordable rates, a task that must be completed without imposing an excessive financial burden on ordinary households and the corporate sector.

About two years have passed since the launch of the government-backed renewable energy purchase program. The number of power generation plans approved under the system has been increasing faster than expected.

If all approved renewable energy production plans are put into action, the amount of electricity generated through such means will add up to 90 percent of the government’s numerical target. The government said it aims to make renewable energy account for more than 20 percent of the nation’s total electric output by the end of 2030.

Under the government-initiated scheme, power from renewable sources will be bought at high prices over the three-year period following the start of the system, which is designed to encourage the use of renewable energy. Moreover, the program will ensure that renewable energy produced under each power generation plan is bought at prices set at the time when the plan is approved, with such a purchase mechanism to be kept in place for up to 20 years.

This favorable mechanism appears to have set off a flood of applications for the purchase program from business operators seeking to obtain high-price energy purchase rights as soon as possible.

Though the spread of renewable energy is a welcome change, it must be remembered that the purchase cost is covered by money accrued from electricity bills paid by ordinary households and business corporations.

According to one estimate, families and corporations will likely bear a renewable energy purchase cost of more than ¥38 trillion over the next 20 years, by paying electricity bills that include such additional charges.

If renewable energy generation plans continue to be approved at a rapid pace, ordinary households and corporations will be forced to shoulder even an greater financial burden.

The slow progress in restarting nuclear power plants has contributed to an increase in fuel expenses for thermal power generation. This has left electricity rates stuck at high levels.

Reexamine pricing

If the current situation goes unchecked, the renewable energy purchase program could impose an additional burden on ordinary families and corporations. This cannot be overlooked.

If the government chooses to reduce purchase prices, it could lead to a last-minute rise in business operators submitting applications for the renewable energy purchase program. Therefore it may be worthwhile to temporarily stop examining and approving applications, and to consider whether it is necessary to adjust purchase prices to more appropriate levels.

Another aspect of the current situation facing the renewable energy purchase scheme is the exceedingly large number of applications approved for solar power generation. This is partly attributable to the preferential prices at which electricity produced through solar power systems will be purchased. It is also much easier to maintain solar power generation systems than wind or geothermal power systems.

However, one disadvantage of solar power generation is that its output can fluctuate widely according to the weather. Given this, it is important to achieve a proper balance in the overall composition of various renewable energy sources, including wind and geothermal power generation. Like solar power, wind power generation also varies, although at different times, while geothermal power generation is capable of steadily generating electricity.

Another problem is that Hokkaido and the Tohoku district, both home to a large number of solar and wind power generation plans, lack the sufficient capability to transmit electricity from their regions to Tokyo and its neighboring areas, where a massive amount of electricity is consumed.

If electric power corporations are required to foot the high costs of maintaining and upgrading their electrical transmission facilities, it may become another factor supporting the idea of an electricity rate hike.

The question is the extent to which the public should be required to cover the rising financial burden that accompanies the widespread adoption of renewable energy. The government should closely listen to the opinions of consumers and business circles, and transform the renewable energy purchase program into a more realistic system.