Policies Concerning New Energy

Outlook for the Deployment of New Energy by the Central Government

The Supply/Demand Subcommittee for the Advisory Committee on Energy prepares the “Outlook for Long-term Energy Supply and Demand” approximately every three years in order to provide forecasts for the future of Japan’s energy supply and demand conditions. Its May 2008 version describes projections of energy supply and demand to FY 2030. For the New Energy, the Outlook shows two scenarios: the Continuous Efforts Scenario and Maximum Introduction Scenario.

In August 2009, the document was reviewed as a response to the government’s mid-term goal up to 2020 in greenhouse gas emissions reduction. Many of the assumptions were updated in order to ensure that they would be robust enough to act as the basis for the formulation of reduction measures that are aligned with the new goal. The effort resulted in the Outlook for Long-term Energy Supply and Demand (Recalculated).

Main Pieces of Legislation Related to New Energy:
Act on the Rational Use of Energy (Energy Savings Act) [1979]

This legislation promotes and facilitates energy saving measures at manufacturing plants and general buildings in order to ensure that fuel resources are efficiently utilized. Promulgated in 1979 as a response to the Second Oil Shock, the law has had four revisions in order to expand its scope and tighten the requirements.

Act on the Promotion of Development and Introduction of Alternative Energy
(Former Alternative Energy Act) [1980]

The Act on the Promotion of Development and Introduction of Alternative Energy, which was legislated in 1980, was amended by a 2009 legislation passed for the very purpose of revising it: the scope was changed from alternative energy to non-fossil energy and the law was renamed as the Act on the Promotion of Development and Introduction of Non-fossil Energy.

Energy Supply Business Operators are required by the act to promote the use of non-fossil energy resources and the efficient utilization of fossil energy.

Act on the Promotion of New Energy Usage (New Energy Act) [1997]

This law was enacted in 1997 aiming to accelerate the efforts of promoting new energy usage. The act provides for the formulation of master policies for the development of new energy including the clarification of roles that the central and regional governments, business operators, private citizens are to play respectively. It defines the New Energy from a policy perspective as “those energies which are approaching the stage of practical application but not yet widespread due to constraints from the standpoint of economic efficiency and are particularly necessary for furthering the introduction of Petroleum Alternative Energy.” Under this act, the Enforcement Order for the Act on the Promotion of New Energy Usage was issued.

Act on Promotion of Global Warming Countermeasures
(Warming Countermeasures Act) [1998]

This law provides a framework in which the central and regional governments, businesses and general public form a united front in tackling global warming and was promulgated in 1998 in response to the adoption of the Kyoto Protocol. Any business operator who produces emissions of a certain amount or more is obligated to calculate the emissions and report it to the central government.

Basic Act on Energy Policy [2002]

This law was enacted in 2002 to establish the basic direction the country should take in energy policies. It sets out the secure and stable supply, environment, and market mechanism as the principles to follow and lays out the respective responsibilities of the central government, regional governments, and businesses.

Under this law, the first “Basic Energy Plan” was prepared in 2003. Its fourth plan of April 2014 shows the new direction for energy policies over the next 20 years that would allow the country to respond to significant events and changes in and out of Japan that affect the energy sector, such as the East Japan Great Earthquake.

Act on the Promotion of the Use of Non-fossil Energy Resources and the Efficient Use of Fossil Energy Resources by Energy Supply Business Operators
(Structural Upgrading Act for Energy Supply) [2009]

Created in July 2009 for the purpose of promoting the introduction of non-fossil fuel energy resources and more efficient utilization of fossil fuel energy, the law provides a list of initiatives to take and certain pass/fail criteria as guidelines for business operators supplying energy such as electricity, gas, or kerosene oil. If the efforts by such business operators are deemed insufficient based on the criteria, the Minister of Economy, Trade, and Industry may issue a recommendation or order.

The Purchase Program of Surplus Solar Power, which was introduced in November 2009 under this Act was migrated to the Feed-in-Tariff Program for Renewable Energy under the Act on Special Measures Concerning the Electricity Purchase from Renewable Energy by Electricity Business Operators as of July 2012.

Act to Partially Revise the Act on the Promotion of the Development and
Introduction of Alternative Energy [2009]

The Alternative Energy Act of 1980 focused on the departure from heavy dependence on oil in order to secure a long-term stable supply of energy, but for the reduction of GHG emissions, it is necessary to reduce the use of fossil fuels as a whole, including coal and natural gas. The Alternative Energy Act was therefore reviewed, resulting in this new act that has rewritten it and now provides supply targets and guidelines for non-fossil fuels in general. It was enacted on July 1, 2009 together with the Act for Structural Upgrading of Energy Supply.

Act on Special Measures Concerning New Energy Use by Electric Business Operators (Special Renewable Energy Act) [2011]

Act on Special Measures Concerning New Energy Use by Electric Business Operators, introduced in August 2011, set forth a Feed-In-Tariff program in which electric business operators are required to purchase power generated from renewable energy resources such as solar, wind, hydro, geothermal, and biomass for a certain period at a certain price to be determined by the national government. The cost of such purchase incurred by the electric business operators is to be recovered by surcharges levied on all users in proportion to their power consumption. The law also demands that necessary measures be implemented to avoid any inequality among regions in the amount of surcharges levied.

The specific prices and periods for purchase are prescribed in a ministerial notification by the Minister of Economy, Trade and Industry every year based on the type, service format, and size of renewable energy. The minister prepares the tariff upon consultation with relevant ministers such as the Minister of Agriculture, Forestry and Fisheries; Minister of Land, Infrastructure, and Transportation and Tourism; Minister of Environment; or Minister in Charge of Consumer Affairs. The prices and periods are determined with due respect to the views of the Committee in Charge of Calculation of Procurement Price and Period.

As a result of this act, the Feed-In-Tariff for Renewable Energy started in July 2012.

Act on Special Measures concerning New Energy Usage by Electric Utilities (RPS Act) (Established in 2002 and abolished in 2012)

Under this law, the Renewables Portfolio Standard was introduced in 2003 as a new program aiming to further expand the deployment of new energy in power generation. The program mandates utilities that retail electric power to source a certain proportion of their power supply from new energy with the ratio dependent on the total power sold for the year.

The RPS System was cancelled when the Feed-In-Tariff for Renewable Energy was implemented, but the existing RPS-recognized facilities have a grace period to continue operating as they are, and if they take the procedures to cancel their RPS recognition, then they qualify to apply for the FIT recognition.