Member Article

As of late this year [1], the Agency of Natural Resources and Energy announced that it has issued deadlines for the submission of renewable energy application documents, etc. based on the FIT Act in FY 2017. Upon submission of these applications, etc. they will be reviewed by the Ministry of Economy, Trade and Industry (METI), however, every year, the review process tends to be stalled because of the large number of applications submitted at the end of the fiscal year. Such application deadlines have been set in order to minimize delays in the examination of applications, etc. According to this announcement, the deadlines for submitting applications, etc. are as follows.

If the applications, etc. are submitted after these deadlines, and even if the applications, etc. are certified, they will be certified in not FY 2017, but in FY 2018 (the period from April 1, 2018 to March 31, 2019).

Depending on whether the applications are certified in FY 2017 or in FY 2018, for example, there may be a difference in the purchase price of electricity under the FIT Act.  That is, the purchase prices in FY 2018 for the following types of renewable energy are as follows.

Therefore, it is extremely important to submit application forms for new certification, etc. by the above deadlines for the types of renewable energy for which it has been decided that the purchase price in FY 2018 will be lower than the current purchase price (for FY 2017).

The purchase price of electricity under the FIT Act is determined by the Minister of METI, however, on this occasion, it is stipulated that it shall be determined based on the opinions of the Procurement Price Calculation Committee (a committee consisting of five experts appointed by the Minister of METI under the FIT Act). From October this year, said committee has commenced consideration of the above purchase prices of FY 2018 which are “To be determined.” At this point, the purchase price of solar power generation of 10 kW or more for FY 2018 is predicted to decrease significantly (approximately JPY 16 to JPY 19/ kW) from the purchase price of FY 2017.

In addition, for “general woody biomass (ippan mokushitsu biomass)” out of biomass power generation, although it has been determined and announced that the price for FY 2018 will not change from the current price (that is, JPY 21/ kW for businesses of 20 MW or more, and JPY 24/ kW for businesses of less than 20 MW), METI has indicated the intention to once more reconfigure this. This is because biomass power generation projects of “general woody biomass” have already increased much more than expected. Therefore, if the price for power generation projects of “woody biomass” is to be set again for FY 2018, it is expected to be lower than the current purchase price. “General woody biomass” means power generation projects of lumber, end materials, imported materials, and palm coconut shells, etc.