Renewables Update

Wind is built fast and at low cost elsewhere – Why do Japan's power companies prefer expensive imported fuels?

31 January 2014 Tomas Kåberger, Chair of Executive Board, Japan Renewable Energy Foundation

Wind power is now the cheapest source of electricity in most countries in the world. Not even new coal fired power stations can compete despite world market coal prices being modest after Chinese and American demand failed to meet expectations.

As a result wind power has become a major source of electricity in many countries. Denmark was the pioneering industrial country to develop wind power in the 1970s. Denmark saw wind as an alternative to nuclear, and never built any nuclear power plants. In 2013 wind power provided 33% of the electricity consumed in Denmark and the Danish parliament set the target that by 2020, 50% of electricity should come from wind power alone.

In dark and cold month of December 2013 wind supplied 50% of all electricity used in Denmark. During the darkest day of the year wind compensated for the lack of solar energy and produced 102 percent.

In recent years also countries that did invest in nuclear have turned to wind instead. In 2012 the electricity production from wind passed the nuclear production in China. In 2013 the wind generation in Spain passed nuclear. Wind is now the largest source of electricity in Spain with more than 20% of the generation.

Most countries now have open competitive electricity markets, where the ownership of the electricity grid is separated from ownership of production plants to ensure fair competition. The cost of electric power is low compared to Japan. The low cost of wind power is often driving costs down.

In the United Stated the department of energy is now reporting that the average cost of electricity from new wind power plants was around 4 yen per kWh in 2012. Similar low costs for new wind electricity is reported also from Brazil and Australia. In Europe the cost of new wind power is slightly higher, in the order of 7 yen per kWh.

Still, these costs are well below Japans electricity prices and the costs of electricity from nuclear and fossil fueled plants that have been built in Japan.

During the last couple of years the investments in Sweden has resulted in a yearly addition of about 80 W of new capacity per inhabitant. If the inhabitants of Japan achieved the same rate of investment, Japan would see 10 GW of new capacity per year that would produce an additional 20-30 TWh. If that would happen, within 10 to 15 years wind alone would substitute all nuclear power produced before the Fukushima catastrophe. Still the share of the electricity would be lower than in Denmark.

So, it can be done, but requires that the government changes the laws of the electricity market, removing the privileges of the current electric power companies.