Grid Congestion for Renewable Energy May Expand to South Japan

Power grids in southern Japan are close to capacity for solar and wind projects as the country pushes to add stations that derive power from clean energy.

Chugoku Electric Power Co. (9504) and Kyushu Electric Power Co. (9508) each have less than 1 gigawatt of available grid capacity for solar or wind projects after deducting existing and approved capacity, according to estimates by Bloomberg New Energy Finance released yesterday.

The study coincides with a debate about how to fix grid congestion on Hokkaido, the northernmost island of Japan. Hokkaido Electric Power Co. (9509), the island’s sole utility, says applications for large-scale solar plants have surged since Japan began offering inducements to promote clean energy, leaving it with more proposed capacity than its grid can handle.

Japan has approved 22.4 gigawatts of renewable energy capacity since an incentive program began in July 2012, according to the Ministry of Economy, Trade and Industry. BNEF estimates Japan has 34 gigawatts of technical grid availability for new solar and wind projects.

Reform of the power market could improve the country’s grid, the London-based researcher said in the report. Such a bill is expected to be submitted to parliament in the autumn.

To contact the reporter 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

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