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Japan's renewable curtailments are on course to reach a record, as nuclear power increases

A review of industry statistics showed that the use of nuclear energy in Japan will increase this year, leading to a record-breaking reduction of wind and solar generation. This will further exacerbate the pain of a sector experiencing a mass exodus.

Since the Fukushima nuclear disaster in 2011, the fifth largest power producer in the world has slowly restarted some of its nuclear plants.

Two reactors that were brought back online in the past year are among 14 of 33 commercially-available reactors. One more reactor received preliminary approval for a restart this year that could not happen until 2027.

This has allowed Japan to reduce its fuel costs, especially expensive fossil fuel imports and meet the rising demand for power from data centres and chipmakers. Grid flexibility has been compromised because nuclear power is difficult to ramp up and down.

The amount of solar or wind power that was able to be produced, but was rejected preemptively because the grid reached its limit.

According to an analysis of data by the Renewable Energy Institute, in nine of Japan's 10 grid regions, curtailments increased 38.2%, to 1.77 Terawatt-hours or 2.3%, of the total green power generated during the eight months to August.

This compares to 1,28 TWh, or 1.8%, of renewable energy output during the same period in last year and the previous record annual of 1.9% set in 2023.

Michiyo Miyamoto is a Japan energy finance specialist with the Institute for Energy Economics and Financial Analysis.

She gave as an example the increased output of the Shimane No.2 nuclear reactor, located in the western region Chugoku and restarted in late December.

DISTANT GOALS

Japan wants nuclear power to be 20% and renewables 50% by 2040. This compares to levels of 23% compared with 8.5% respectively in fiscal 2023.

The renewable energy sector has been hit hard by the curtailments, but the revenue lost from them is not the only thing that's hurting it. IEEFA reported in August that a record 52 renewable energy developers left Japan in the fiscal period ended March, including eight bankruptcy cases.

Amid rising costs, groups led by the trading house giant Mitsubishi walked away from three offshore projects in August. This raised concerns over the viability and feasibility of other offshore projects.

The International Renewable Energy Agency reports that the growth rate of new wind and solar installations is expected to slow down in Japan by 3.3% between 2024 and 2009, which is the lowest pace since 2009.

Kenichi Onishi is a researcher at the Institute of Energy Economics in Japan. He said: "If curtailments exceed expectations, it will be harder for renewables to recover their costs and discourage new investment."

Requests for comments were not answered by the Japan Community Power Association (JCPA), the Japan Council for Renewable Energy (JCRE) and the Japan Wind Energy Association.

Increased curtailments have also been caused by transmission shortages and maintenance problems. REI data revealed that during the first five month of the current fiscal period, which ended in August, curtailments on the island of Kyushu were 7.6%, while those on the northern region Tohoku were the highest, rising from 2.1% up to 5.8%.

The main problem is the insufficient capacity of grid transfers from regions with high renewable energy. Kyushu’s photovoltaics expansion outpaced the local demand and export capacity, said Uran-Ulizi Batyabar of Rystad Energy in Tokyo.

Minoru Shioda is an official in the energy efficiency and renewable energies department of the Industry Ministry. He said that Japan is trying to reduce curtailments through building inter-regional power transmission lines, promoting storage batteries, and encouraging high demand during times of high energy generation.

Shioda said higher hydropower generation due to heavier-than-expected snowfall led to curtailments in Tohoku this spring. Analysts cited the restart last October of a nuclear unit at Onagawa in Tohoku as another key reason for the curtailments.

Tetsunari IIda, the chairperson of Institute for Sustainable Energy Policies, said that unless regulatory reform prioritizes renewables over incumbents Japan risks falling behind global trends.

(source: Reuters)