Japan Geothermal Power Could Grow to 2 Gigawatts by 2020s

Geothermal capacity in Japan could grow almost fourfold to 2 gigawatts by the 2020s following the government’s decision to allow projects in newly opened areas of national parks, according to a research agency.

Japan’s geothermal sector may also benefit from a feed-in tariff program starting in July to pay above-market rates for renewable energy as well as 9 billion yen ($109 million) in subsidies for feasibility studies and test drilling for the year ending March 2013, Bloomberg New Energy Finance said.

“The expanded access rules, the resource study subsidy, and the feed-in tariff should revive geothermal developments in Japan,” the London-based agency said in a report.

Last month, the Ministry of Environment announced an expansion of areas where developers may do surveys and build geothermal power plants in national parks, where more than 80 percent of the nation’s resources are.

In addition to the current capacity of 537 megawatts, Japan could develop some 1,000 megawatts, or 10 percent of resources, in the newly opened national park areas, according to BNEF. The country could also add about 500 megawatts of capacity outside national parks, according to the estimates.

To contact the reporters on this story: Chisaki Watanabe in Tokyo at cwatanabe5@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net.