<article><p class="lead">Japan has decided to introduce a feed-in-premium (FiP) scheme for renewable power sources from April 2022. But the market-based programme will probably exclude biomass, as well as geothermal and small-scale hydro and solar power projects, which will continue to be financed by the existing feed-in-tariff (FiT) system.</p><p>Japan's parliament passed a bill to launch the FiP system on 5 June, with the revised renewable energy law scheduled to take effect on 1 April 2022. </p><p>The new mechanism allows renewable power producers to sell their electricity in a spot market at a premium to wholesale prices. This is aimed to expand renewable power capacity without subsidiaries, encourage competition and reduce the cost burden on consumers under the current FiT system. </p><p>Details of the FiP system have not been fixed yet, including how to decide premiums and reference wholesale prices, as well as targeted renewable sources. But related committees under the trade and industry ministry (Meti) are proposing the FiP system should be applied to large-scale solar power and wind power projects, as the capacity of these power sources have been increasing with generation costs being reduced. </p><p>The committees are also considering other renewable sources, such as biomass, geothermal and small-scale solar and hydro power, will continue using the FiT scheme, which ensures electricity sales at fixed prices for allowed periods. Installation of these power sources are still limited, with generation costs relatively high compared with large-scale solar and wind power projects. </p><p>Japan launched the FiT system in July 2012 to help reduce the country's greenhouse gas emissions. Installed renewable power capacity totalled 72,944MW at the end of December last year, more than triple the 20,600MW in June 2012, Meti data show. </p><p>Solar rooftop capacity in the household sector rose by 143pc from June 2012 to 11,430MW by the end of last year, while solar capacity in other sectors increased to 42,457MW from 900MW over the period. Wind power capacity rose by 53pc to 3,967MW. Biomass power capacity increased by 92pc to 4,414MW, while geothermal and small-scale hydropower capacity rose by 16pc to 578MW and by 5pc to 10,097MW respectively. </p><p>Total electricity purchasing costs under the FiT system reached around ¥13 trillion ($120bn) from July 2012 to December 2019. Meti expects the purchase costs will be around ¥3.8 trillion in the April 2020-March 2021 fiscal year, while surcharges to customers are forecast at around ¥2.4 trillion for the year. </p><p class="bylines">By Motoko Hasegawa</p></article>
