Japan should nearly treble the supply of electricity generated by renewable energy by 2014 from current levels to reduce use of fossil fuels, a government panel on energy policy said on Tuesday. The call, which comes amid growing pressure on governments to act against global warming, may force Japanese utilities to double related costs with little incentive.

The energy subcommittee of Japan's trade ministry said in a draft report that utilities should be required to raise supplies of electricity generated by renewable energy, such as wind and solar power and biomass, to 16 billion kilowatt-hours a year by the fiscal year starting in April 2014. That compares with 5.5 billion kilowatt-hours supplied in the year ended in March 2006, or about 0.5 percent of Japan's total annual electricity supply. "The subcommittee will open the draft report for public comment and the trade ministry is expected to approve the final report by the end of this fiscal year (in March). Regulations will be revised soon after that," a panel official said.

Regulations now set a target for power producers to supply 12.2 billion kilowatt-hours of electricity from renewable sources in 2010/11, and they have no targets beyond that year. The Federation of Electric Power Companies estimates that the regulation change would force utilities to spend about 100 billion yen (US$832 million), boosting costs without government incentives.

"The industry is spending 50 billion yen to meet the 2010 level even now. The spending will double to 100 billion yen beyond that year," Mamoru Muramatsu of the industry federation told the panel. "The government should be aware of that." Some analysts have said the industry's related spending could swell to 130 billion yen a year as a result of the regulation change. That is more than last year's net profits of Japan's third-ranked utility Chubu Electric Power Co. But the panel appeared to offer utilities no incentives or carbon credits, nor did it say how much greenhouse gas Japan could reduce via increased supplies of electricity from renewable sources.

"There are some concerns that introductions of excessive incentives would damage efforts to cut costs via such means as technological innovation," the draft report said. Scientists on a UN body assessing climate change last week blamed global warming from greenhouse gases on the burning of fossil fuels.

Japan is struggling to meet UN-led Kyoto protocol targets to reduce greenhouse gas such as carbon dioxide so as to help slow global warming. Japan's greenhouse gas emissions totalled 1.36 billion tonnes in the year to March 2006, making it the largest polluter among the countries with Kyoto caps. The volume is 14.1 percent above its Kyoto reduction target. Some analysts point to Japan's slow progress to a lack of incentives or mandatory emission caps for companies. (US$1=120.17 Yen)
(Por Ikuko Kao, Planet Ark, 08/02/2007)