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Japan’s $21 million microgrid investment boosting renewable sector says GlobalData

Research and consulting firm GlobalData has predicted that Japan’s increased focus on smart grid deployment will enable it to become one of Asia-Pacific’s top smart grid markets.
Japan’s $21 million microgrid investment boosting renewable sector says GlobalData

Japanese smart grid deployment forms part of the country’s plan to boost energy efficiency and power generation from renewable sources according to GlobalData. The company’s latest report states that Japan was among the first countries in the world to invest in smart grid research and development in the early 2000s. The country’s New Energy and Industrial Technology Development Organisation (NEDO) funded a number of pilot microgrid projects from 2003 onwards.

More recently, the Japanese Ministry of Energy initiated a new programme, in 2014, to encourage microgrid development. The programme has a budget of $7 million annually for three years for independent demonstration projects, such as electric vehicles for mobility and storage, renewable energy production and storage systems, as well as energy optimisation.

“Following the Fukushima nuclear disaster in 2011, Japan suffered substantial damage to its grid infrastructure, along with a reduction in its base load generation” said Sowmyavadhana Srinivasan, GlobalData’s Senior Analyst covering Power. “Consequently, there are more efforts to increase the country’s energy efficiency and renewable power generation. However, the proliferation of renewable power projects in Japan has been hindered by numerous difficulties with grid connection, currently divided into 10 regions and operated by 10 different utilities. One of the major challenges for developers in 2014 was the requirement for an improved transmission system.”

Mr Srinivasan added that this is further compounded by the fact that it had previously taken around three to four years for developers to overcome all regulatory hurdles involved in implementing renewable projects. The lengthy approvals process led the Japanese government to reduce the waiting period to less than two years. Combined with the possible establishment of a centrally-operated grid, this might allow projects to be set up in less time, enabling the renewable sector to become a significant part of the country’s power network.

In 2014, renewable energy only accounted for 10 perent of Japan’s installed capacity, but GlobalData is expecting this to grow to 19 percent by 2025.

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