The Act on the Promotion of Renewable Energy in Japan

Introduction

On June 11, 2012, Japan took a significant legislative step by enacting the Act on the Promotion of Renewable Energy, also known as the Feed-in Tariff (FIT) Scheme for renewable energy. This move was largely in response to the Fukushima Daiichi nuclear disaster of 2011, which drastically altered the national energy strategy and underscored the need for a sustainable and diversified energy portfolio.

Context and Background

The catastrophic events at Fukushima in March 2011 led to heightened public concern over nuclear energy safety and a subsequent reevaluation of energy policies. The disaster prompted widespread anti-nuclear sentiment and a national dialogue on energy independence, leading the government to prioritize alternative energy sources.

Key Provisions of the Act

• Feed-in Tariff Mechanism: The Act established a feed-in tariff system, which obliged utility companies to purchase electricity generated from renewable sources such as solar, wind, geothermal, small hydro, and biomass at fixed rates. This guaranteed price system aimed to encourage investment by ensuring a stable return for developers of renewable energy projects.

• Coverage and Rate Adjustments: The policy covered a variety of renewable sources, with set procurement prices and contract durations determined based on installation type and scale. The rates were subject to annual adjustments to reflect changing market conditions and technological advancements.

Goals and Objectives

• Diversification of Energy Supply: The Act sought to diversify Japan’s energy mix and reduce dependency on nuclear power, thus enhancing energy security and sustainability.

• Promotion of Renewable Investments: By creating economic incentives for renewable energy, the legislation aimed to boost domestic production and technological innovation within the renewable energy sector.

• Reduction of Greenhouse Gas Emissions: Encouraging wider adoption of renewables aligned with Japan’s commitments to international environmental agreements and efforts to combat climate change.

Impact and Aftermath

The enactment of the Act on the Promotion of Renewable Energy significantly accelerated the growth of renewable energy in Japan. Solar power, in particular, saw a dramatic increase in installations, positioning Japan as one of the leading countries in solar energy capacity.

The policy underwent several revisions over the following years, addressing costs and grid integration challenges, while maintaining its core objectives of fostering renewable energy development and reducing reliance on nuclear power.

Conclusion

The Act represents a pivotal shift in Japan’s energy policy landscape, driven by the urgent need to adopt safer and more sustainable energy practices. It not only highlights Japan’s response to a national crisis but also underscores a global trend towards renewable energy adoption in the face of environmental and safety concerns.