As Japan continues to bounce back from the Fukushima nuclear disaster
in 2011, it has focused on renewable energy to lessen its reliance on
nuclear and carbon-heavy fossil fuels. In just two years, Japan
installed more than 11 gigawatts (GW) of renewables, thanks in part to a
generous feed-in tariff (FIT) program established in 2012. While most
of that development has been centered on solar, Japan has recently
turned toward its abundant reserves of geothermal energy, with the
Ministry of Economy, Trade and Industry (METI) expecting 380 to 850 MW
of new installed geothermal capacity by 2030.
The 9.5-MW Matsukawa Geothermal Power Station, built in 1966, was one of the first geothermal plants in Japan. Credit: Wikipedia.
A Baseload Dilemma
When Japan shut down its nuclear capacity more than 29 percent of its
baseload power capacity was turned off. As a result, many regions have
dealt with scheduled blackouts. According to a recent report from Japan's Liberal Democratic Party
(LDP), the country must increase homegrown energy, rather than rely on
fossil-fuel imports. The report calls for 25 percent more baseload
power, which is music to the geothermal industry's ears: the industry
has long touted its baseload resource benefits.
Home to more than 100 active volcanoes, Japan holds the third largest
reserve of geothermal potential in the word at more than 23 GW. Despite
this huge potential, there was less than 540 MW of installed capacity
before the 2011 accident. This lag may soon see an uptick.
Policy Change
Geothermal development in Japan faced several barriers before the
Fukushima accident, according to Kasumi Yasukawa of the National
Institute of Advanced Industrial Science and Technology (AIST). One
major obstacle was due to, of all things, environmental considerations.
Nearly 80 percent of Japan's geothermal resources are located within
national parks or protected hot springs, areas designated as restricted
"zones" with limits on the type and location of work that can be done in
them. Japan set a moratorium on geothermal production within these
parks, with heavy restrictions even on light research.
In 2012, the Ministry of the Environment relaxed the rules for each
zone, known as ordinary, special protection (SP) or special class 1, 2
or 3 (S1, S2, or S3). In the past, surface surveys and small-scale
development was only allowed in ordinary zones. Now, however, survey
work is allowed in SP and S1 zones; small-scale development is allowed
in S2 and S3 zones and large-scale development is allowed in ordinary
zones.
"Keeping a balance between geothermal power and national parks has
been a very big issue," said environment minister Goshi Hosono during a
press conference when the new rules were released. "We plan to develop
geothermal power in earnest as the importance of renewable energy is
increasing."
In 2012, the government also increased funding for geothermal
exploratory drilling from $15 million to $90 million, according to
AIST's Yasukawa. Exploratory drilling is considered the most costly and
risky aspect of a project and usually a deterrent for many developers.
It accounts for about 50 percent of geothermal costs. In addition to
this funding, Japan set 15-year feed-in tariff (FIT) prices for
geothermal projects at 27.3 yen/kWh [US $0.23/kWh] for projects 15 MW or
larger, and 42 yen/kWh [US $0.35/kWh] for projects less than 15 MW.
Increased Interest
These measures have brought new interest in geothermal development,
leading to the inception of the Japan Geothermal Association (JGA),
which today provides support for more than 50 companies that are
stakeholders in the industry. Over the past year, several companies have
announced that they are starting exploratory research.
Tokyo-based financial services company Orix announced in late 2014
that it plans to build as many as 15 geothermal plants within the next
five years. The company plans to expedite this initiative by building
smaller scale plants of around 2 MW in capacity in order to avoid costly
and lengthy environmental assessments that plants larger than 7 MW must
undergo. Orix also helped develop the 2-MW Kumamoto geothermal plant
built by Chuo Electric Power in 2014. It was Japan's first 1-MW+
geothermal project to go online in 15 years. Chuo also plans to build
five more small-scale plants in the next five years.
Other companies are working to improve the few established geothermal
plants in Japan. For example, Idemitsu Kosan Co. announced in March
that it would build a 5-MW binary project near an existing 27.5-MW plant
in southern Japan. Binary plants are able to take advantage of
lower-temp resources, and are often used to enhance production at
existing plants. Idemitsu plans for the plant to be commissioned in
2017. In addition to these small-scale developments, METI said that
exploratory operations are taking place in more than 40 locations across
Japan, signaling an exciting time for the geothermal industry.
http://www.renewableenergyworld.com/articles/print/volume-18/issue-3/features/geothermal/is-japan-the-next-boom-market-for-the-geothermal-energy-industry.html