In a response to concerns over the safety of nuclear energy, Japan is heavily investing in safe, renewable energy. The official subsidy program begins in July 2012 but several programs are already underway.
Removing nuclear power plants could take up to 40 years, so the main objective is to implement a source of renewable but long-lasting energy. According to Reuters, Japanese utility companies are now required “to buy output from five sources- solar, wind, geothermal, small-sized hydro and biomass power.” These sources are priced at fixed rates in order to present them as a stable choice for investors.
In more direct intervention, Japan is building 22 solar plants with a 102 megawatt capacity. If this project is successful it will then be open to private investments and entrepreneurship. The country also approved geothermal projects and research in its national parks. Bloomberg New Energy Finance predicts that “the geothermal capacity in Japan could grow almost fourfold to 2 gigawatts by 2020.” If the geothermal power plants meet expectations, the new areas could supply up to 10% of Japan’s electricity requirements.
Private investors are gaining interest in these projects, too. Sparx Group Company, the largest Japanese hedge fund, is investing up to $100 million in wind and solar research. The Wall Street Journal reports that Sparx’s CEO, Shuhei Abe sees large investment opportunities in the renewable sector and wants to get a head-start, preferably by July. These opportunities are mostly due to the government’s “relaxation of complex regulations in the area” creating a balanced approach between private and public to Japan’s energy management problem.
See the complete reports (sources):
Sparx Plans Renewable-Energy Fund
Published on Online.wsj.com - April 2, 2012 - Authors: Kana Inagaki and Ben Lefebvre
Large solar projects by Japanese utilities
Published on Asiaone.com - April 2, 2012 – From Reuters
Japan Geothermal Power Could Grow to 2 Gigawatts by 2020
Published on Bloomberg.com - April 5, 2012 – Author: Chisaki Watanabe