In Japan, the discussion on the first major change of the feed-in tariff (FIT) program was concluded in December 2014. Since the start of the FIT program in July 2012, PV installations have significantly increased in Japan. As the number of approved PV systems under the FIT program increased more than expected, concerns about the impact of grid and economic burdens arose. As reported in pv magazine 12/2014, Kyushu Electric Power Co., Inc. and other electric utilities in Japan announced that they will suspend accepting applications to grid connection contracts. Meanwhile, the Ministry of Economy, Trade and Industry (METI) held meetings of the New and Renewable Energy Subcommittee under the Advisory Committee for Natural Resources and Energy, in order to comprehensively review the current FIT program. The Subcommittee proposed new rules for the FIT program and METI announced a drastic revision of the implementation of the FIT program based on the proposed framework. It released a document called Review of the facility approval and management of the facility approval under the feed-in tariff (FIT) program in FY 2014 on December 19, 2014. In response to METIs announcement, the seven electric utilities made announcements about their own measures.
Public comments were invited with a deadline on January 9, 2015. After that, ministerial orders and announcements were to be amended and the review was to be implemented according to the schedule described below. However, as of January 19, 2015, METI has not published a ministerial ordinance on curtailment rules for new projects. The PV industry is waiting on the details. Below, the key changes for the FIT program are summarized.
On December 18, METI abruptly announced that the acceptance of applications for PV projects with the FY 2014 tariff (< 10 kW: JPY 37/kWh, > 10 kW: JPY 32/kWh) will be terminated as of January 30. A rush of applications is expected in January. A number of amendments will be made according to a series of rule changes. Project developers must know the effective date of these changes, when the new rules will apply to facility approval, and then make changes to their existing facilities and planned facilities. Following are the key points of the revision of the FIT program. These are also summarized in Table 1 (see p. 36) together with other key points.
The PV industry has to face these changes as well as the constriction of the grid. The 2014 annual installation volume (DC base) seems to be higher than 9 GW. Given the changes and the grid constriction, it seems that the market will not grow at the same rate in 2015 as it did in 2014.
Fixing the FITs
As of April 1, 2015 (the beginning of the Japanese Fiscal Year 2015), the date for fixing the FITs for PV projects that apply for grid connection contracts will be fixed at the later date of approved date or the date when grid connection contracts are signed, changed from the current rule of later date of approved date or the date when applications for grid connection contracts are made. However, in case there is evidence issued by the electric utility that the grid connection contract has not been signed for 270 days or more after the date of the application for grid connection contract, due to a reason attributed to the electric utility, the FIT on the 270th day after the next day of the date of application shall be applied. According to this rule, it is necessary to make an application for grid connection by the end of June in the previous year 270 days before the end of the current fiscal year in order to receive the FIT for the current fiscal year ending in March each year.
Change of facility
In case applications for change of facility before commissioning are made on or after February 1, 2015, the FIT as of the date when the change is approved shall be applied.
Changes include the change of the PV module supplier (manufacturer) or the increase of output capacity. This rule also applies to projects approved before the enforcement of the new rule. For PV systems of 50 kW or larger with such changes, the 180 day rule shall be applied, which requires contracts for project site and equipment orders to be carried out within 180 days of the date of approval of the change. In the case of an output increase, change of PV manufacturer or change of PV module type, it is required that the document for the change of the facility will be submitted to the regional Bureau of Economy, Trade and Industry by the designated time on January 30, 2015.
Output curtailment
The suspension of responses to applications for grid connection contracts came from the calculation process based on the following conditions: 1) holidays when factories stop operation,
| Table 1: Key points of the revised FIT program | |||
|---|---|---|---|
| Topic | Current status | After revision | Notes |
| 1. Date for fixing the FIT level | Later date of project approval or when the utility company receives application for grid connection contract | At the time of signing the grid connection contract (if utility companies cannot answer within 270 days, the FIT level can be adjusted) | Applied from the projects submitted grid connection contract as of April 1, 2015, and later The Federation of Electric Power Companies of Japan (FEPC) is considering one-stop service for pre-consulting, grid connection studies and application for a grid connection contract |
| 2. Curtailment of new projects | |||
| A: Extension of subjected PV systems | PV systems of 500 kW or more are subject to curtailment described in B | All PV systems (PV systems of 10 kW or more are prioritized for curtailment; subjects of new rules differ for utiliy companies) | Revised by ministerial ordinance Enforced on the date of issuance of the ordinance (January 26, 2015) |
| B: Shift to time controlled rules from 30 days rules | No compensation for a maximum of 30 days on a day-to-day basis | No compensation for a maximum of 360 hours per year | Revised by ministerial ordinance Enforced on the date of issuance of the ordinance (January 26, 2015) |
| C: Obligation to install a remote control system for curtailment | No obligation | Obligation to install an inverter with remote control function (as it takes time to develop the system, conventional inverters may be installed in the short term if project developers commit to additionally installing the system later) | Revised by ministerial ordinance Enforced on the date of issuance of the ordinance (January 26, 2015) The Japan Electrical Manufacturers Association (JEMA) is examining the technical issues |
| D: Eligible utility company can implement curtailment | Hokkaido Electric Power | Hokkaido Electric Power, Tohoku Electric Power, Hokuriku Electric Power, Shikoku Electric Power, Kyusyu Electric Power and Okinawa Electric Power | Enforced on December 22, 2014 Listed utility companies can implement curtailment |
| 3. Change of output capacity of PV facility after commissioning | Applying the FIT level and purchase term for the existing facility | Additional capacity is regarded as new facility (exception: PV systems < 10 kW) | Applies to the employment of the change submitted on April 1, 2015, and later |
| 4. Requirement of changing PV facility before commissioning | FIT level is changed to the level at the time of submitting the document to change output capacity over 10 kW or PV module output capacity ± 20% (project owner has to submit application document of the change to the regional office of METI) | FIT level is changed to the level at the time of submitting the document for increase of power generation capacity change of basic specification of PV modules (manufacturer, type, efficiency)Exceptions :< 10 kW PV system (after changing), manufacturers stopped production, increase of efficiency, etc. | Applies to the employment of the change submitted on February 15, 2015, and later For 50 kW facilities, the 270 day rule will be applied for the project site and facility |
| 5. Prevention of gripping the capacity and release of reserved hosting capacity | No rules | Connection fee must be paid within a month after signing grid connection contract Utility can cancel reserved capacity if the facility cannot start generation on the scheduled date in the signed contract | Implemented as of mid-January |
| 6. Use of approved project data base by local government | No | METI will provide detailed information of approved projects to local authorities | As soon as possible |
| Source: RTS Corporation, PV Activities in Japan, December 19, 2014, and January 16, 2015 | |||
without demand for air conditioning; 2) favorable irradiation conditions so that PV systems generate power almost in full capacity; and 3) electric utilities stop operation of their power generation facilities or operate at low load in preparation for irradiation fluctuation. Under such conditions, electric utilities examined to what extent they can reduce their power generation and calculated the possible capacity for PV installation by deducting the minimum required power generation from the electricity demand in case PV systems make up for the demand.
These conditions may occur only infrequently on a day with good irradiation and when the demand is low, and will not occur under normal demand. If the output of PV systems under such conditions is curtailed, it will become possible to install more PV systems in normal times. As shown in Table 1 (see left), the scope of output curtailment has been extended in the amendment of the ministerial order scheduled in mid-January 2015. The implementation of this rule will also be amended, including the extension of the rule to be applied to the entire output capacity, the transition to remote-controlled automatic procedure for curtailment, and the shifting from a day-to-day basis to an hourly basis.xAdvertisement
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