On August 26, the Japanese parliament passed a new energy law that aims to reduce Japan's greenhouse gas emissions by 25 percent by 2020 from the 1990 level. It introduces a feed-in-tariff mechanism that requires utilities to buy electricity produced from renewable sources at premium prices. The law comes into effect on July 1, 2012.

Analysts predict that solar energy will be the big winner. Currently, two solar plants are being developed in Kawasaki as part of a Mega Solar Power Generation Project carried out jointly by the city and the Tokyo Electric Power Company (TEPCO), which also operates the crippled nuclear plant at Fukushima. Together, the solar plants are expected to produce about 20 million/kWh of electricity annually.

The Ukishima plant began commercial operations in August this year with the plant at Ogishima scheduled to begin production in December. "On sunny days, the power plant generates more than 6,000 kilowatts of electricity," says Mr Yumida an employee at the Ukushima plant. "But when it's cloudy it can only cover 20 percent of demand."

Generating electricity from wood

Yusuhiro Fukushiba from the office for environment and sustainability in Kawasaki thinks there are some potential pitfalls in the new law. Energy companies will face extremely high costs, especially for solar power, if the state does not subsidize them, but if the prices are too low there will not be enough incentive to promote renewable energies.

For half a year, a new private biomass power plant in Kawasaki has been generating electricity by burning chips of wood. Hiroshi Nakamura, the director, does not think the new energy law will make a great difference to the prices. "We have long-term contracts with TEPCO and we are bound to secrecy," he says.

Biomass plants make sense in Japan where many houses are still made in wood and do not have a very long lifespan - when they are taken apart the wood can be used as fuel.

Right now, there are plans to build two biomass plants in the northeastern region of Tohoku where huge amounts of debris were left over by the devastating earthquake and tsunami.

The new law will have an impact on these plants if there is a higher price for feeding into the grid but Fukushiba doubts whether it will be felt in the near future.

"Right now there is chaos in the political world, especially in the ruling party. It's all going to take time until this law is put into effect. We of course would like the details as soon as possible so we could pass them on to our citizens and local companies but it will take time because of the political turbulence."

Author: Peter Kujath / mg
Editor: Anne Thomas