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HOME > Monthly Perspective > Expectations for realizing a “Renewable energy-oriented ‘regional’ economic society” led by local municipalities

Expectations for realizing a “Renewable energy-oriented ‘regional’ economic society” led by local municipalities

2020.09.14

Japan’s energy policy greatly changed its direction towards the “creation of a renewable energy-oriented economic society”, aiming to making renewable energy a mainstream power source from an early date. The Ministry of Economy, Trade and Industry (METI) started preparations for the formulation of the Sixth Strategic Energy Plan and design of a new scheme with the following as the pillars: 1) evolution toward realizing the competitive renewable energy industry; 2) maintenance of social infrastructure such as network, etc. that support renewable energy and 3) establishment of communities in harmony with renewable energy, based on the Acts for Establishing Resilient and Sustainable Electricity Supply Systems, aiming for a full-scale development of renewable energy. The future dissemination of PV power generation is shifting from the expansion of MW-scale PV power generation based on power sales as a competitive power source to the creation of the market in which supply and demand are integrated (supply/ demand integrated market), as well as the market for local production and local consumption of electricity as a locally-utilized power source. The role of municipalities will be extremely important for the expansion of dissemination in this field since it requires measures responding to the local characteristics.

 

Furthermore, the involvement of municipalities is necessary for progressing the above mentioned 1) and 3). Since the start of the Feed-in Tariff (FIT) program, the mechanism of PV dissemination based on gross power sales was established by mainly the “national government”, “PV industry” and “finance”, however, now that the economic efficiency of PV has improved, the path is open for expansion of dissemination rooting in local communities based on self-consumption with PV as a locally-utilized distributed power source. Therefore, municipalities can play the role of revitalizing the regional economy and guaranteeing safety and security of local residents, while enabling the expansion of dissemination led by municipalities through installation of distributed renewable energy and utilization of renewable energy-based electricity (RE electricity).

 

Municipalities have so far promoted dissemination of renewable energy in a passive manner with support from the Cabinet Office, ministries and agencies based on national policies. However, from now on, municipalities will be able to promote local production and local consumption of RE electricity with local industries and residents in an active manner. Utilization of renewable energy need to be progressed responding to local characteristics while classifying renewable energy power sources into competitive power source and locally-utilized power source responding to their characteristics. To achieve this, it is important for each municipality to take the central role in promoting installations according to the status quo of each area. Especially, PV can be introduced in any area of Japan, and is the most suitable for local energy supply as the main axis of distributed power sources.

 

The creation of a renewable energy-oriented economic society shall first be started on a prefectural level or a municipality level with the creation of “renewable energy-oriented ‘regional’ economy” initiated by municipalities as an advanced model. Hereafter, municipalities are expected to stand in the perspective of revitalizing the regional economy, taking energy and environmental measures, and improving the living environment of local residents. It is expected for municipalities to make efforts for the realization of a renewable energy-oriented regional economy as shown in Table 1, and contribute to the development of the regional economy.

 

Luckily, municipalities throughout Japan today, have an increasing interest in installation of renewable energy, and 151 municipalities with 71.15 million residents made a commitment to achieve virtually zero emission of CO2 by 2050. The National Governors’ Association (NGA) have repeatedly made recommendations related to the dissemination of renewable energy and recently made a recommendation to make the RE electricity generation ratio to over 40 % by 2030. As such, municipalities are getting more and more active in expanding renewable energy installation.

 

On a prefectural level, Fukushima Prefecture is progressing its vision of covering the primary energy demand of the prefecture with 100 % renewable energy by 2040. On a city level, Hamamatsu City holds the vision of the 2050 Hamamatsu City Area RE100 and is making efforts for the achievement of the goal.

The national government should enhance support for the municipalities making ambitious efforts for the expansion of renewable energy installation, by recognizing them as the top runner model for the creation of a renewable energy-oriented economic society. By setting guidelines for the creation of renewable energy-oriented regional economic society, it may be possible to expand such economic society. It is necessary for the government to show the future image and the path for realizing a renewable energy-oriented economic society, and transfer a certain level of authority to municipalities and promote the independence of local municipalities. Meanwhile, the PV industry should also cooperate with these municipalities and expand the range of the PV industry through partnerships with local businesses engaging in the renewable energy business.

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