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Realists and idealists on the cost of adopting renewable energy

Monday, July 11th, 2011

Though the power companies and their allies in the business community still insist that nuclear is the more viable form of energy generation for Japan, everyone else is already thinking beyond nuclear, including the government.

Towering, infernal; or, How I learned to stop worrying and love the pylon

On March 11 when the earthquake/tsunami happened, it just so happened that the Diet was discussing a bill to promote renewable energy sources like wind and solar. It is the exact same bill that Prime Minister Naoto Kan insists on passing before he steps down, and was written by the Ministry of Economy, Trade and Industry, the government organ whose predecessor was mainly responsible for putting nuclear power at the center of Japan’s energy policy. It’s not as ironic as it sounds. METI has been charged by the international community with reducing Japan’s carbon output, and since renewables only account for one percent of the country’s energy production there’s room for improvement in that area. Besides, as bureaucratic maverick Shigeaki Koga wryly suggests in the Asahi Shimbun, for METI officials there are as many opportunities for career advancement in the renewable field as there are in the nuclear field.

The question now is, how much is the consumer going to have to pay for this shift to renewable energy? NHK ran a discussion of the matter on Saturday morning with two experts. Tetsuya Iida, a former nuclear power insider who now runs an energy research center, is, as the announcer labeled him, an “idealist”; while Yuzo Yamamoto, a professor at Kotoha University, is a “realist” on the matter.

According to the proposed bill, called the Renewable Energy Act, the government will endeavor to increase the share of wind and solar energy to 13 percent of all power generation in Japan in 10 years by setting the price that power companies will have to pay for that energy. Though a number of venture businesses have tried to make a go of renewables, their main problem is startup costs. “It’s unavoidable that you operate in the red at first,” said the president of one solar farm in Miyazaki Prefecture. Construction of windmills is very expensive and the cost has almost doubled over time owing mainly to the price of materials. Moreover, the power companies pay less for wind energy than they used to: ¥10 per kilowatt-hour, down from ¥12 per kw/hour in 2003.

An NHK reporter pointed out that METI had been subsidizing the construction of solar and wind farms, but that last year the subsidies were stopped after a round of the Administrative Reform Council, which was charged by the ruling Democratic Party of Japan to cut waste. The premise was that the Renewable Energy Act would eventually be passed and thus make the subsidies obsolete.

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