TEPCO Applies New Method to Solve Problem of Stagnant Solar Projects (page 2)

Payment of contribution in aid of construction or cancellation of contract

2019/03/27 13:46
Kenji Kaneko, Nikkei BP Intelligence Group, CleanTech Labo
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New capacity of about 3,000,000kW across Japan

If about 80% of the commercial low-voltage, high-voltage and extra-high-voltage power plants that applied for grid connection in or after fiscal 2013 also cancel their contracts or withdraw, a free space of more than 1,000,000kW will be created in the service area of TEPCO Power Grid.

If the canceling scheme is applied to the service areas of other companies, in accordance with the policy of METI, and a similar percentage of power plants cancel their contracts or withdraw, a new capacity of about 3,000,000kW can be created in Japan.

Originally, in order to obtain certification based on the revised feed-in tariff (FIT) policy implemented in April 2017, it is necessary to conclude a grid connection contract after paying the contribution in aid of construction to a power company. However, in fact, there seem to be many projects that were certified without paying the contribution because they repeatedly extended the payment due date.

On the other hand, many power plants that have not been operated for a long period of time face the reduction in purchasing price or are required to start operation by a newly-set deadline due to the FIT rules changed in December 2018. Some of them gave up on commercialization, and others found it difficult to sell the project (certification and right to connect to a power grid). As a result, many projects were "locked up" while keeping their grid capacities.

To solve such a problem, METI has been revising the rules of the policies for power transmission/distribution business so that power companies can refuse grid connection and revoke capacities allocated to power plants that have not paid the contribution in aid of construction.

This time, it was a great achievement that 80% of the targeted plants had canceled their contracts or withdrawn in the service area of TEPCO Power Grid, which actually carried out the canceling scheme. And it is expected that the "exit" of locked-up projects will make it easier for new projects to connect to power grids.