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June 5, 2020

Solar delays mean energy shortfall for Japan: GlobalData analysts

The Covid-19 pandemic has deflated Japan’s photovoltaic (PV) solar market to the point where it will soon rely on coal, GlobalData analysts said today.

By Matthew Farmer

The Covid-19 pandemic has deflated Japan’s photovoltaic (PV) solar market to the point where it will soon rely on coal, GlobalData analysts said today.

As in many countries, electricity demand in Japan fell during its coronavirus-induced lockdown. With the country’s increased use of solar power, supply remained consistent and wholesale electricity prices were kept low.

Japan has invested significantly in solar, but changing the country’s tariff structure and problems with interconnection have caused delays. During the pandemic, construction work for new solar facilities was put on hold. The country is also facing large delays in receiving PV units from China.

Japan’s state of emergency ended last week. As it recovers from the pandemic, it is facing a supply shortfall. With its low share of nuclear power, coal and gas seem set to fill the generation void. In the first quarter of 2020, Japan imported 3.4% more coal than in the same period of 2019. Practically, this meant another 1.5 million tons, bringing its imports to 44.8 million tons.

Japan to make proivisions for solar post-pandemic

GlobalData senior power analyst Somik Das said: “Japan, in its quest to meet the target of having 24% of its energy use from renewables by 2030, made investments in the solar and offshore wind a priority. However, these efforts are expected to experience a setback due to the Covid-19 outbreak.

China forms an integral part of Japan’s solar supply chain. The onset of the pandemic there has affected the shipment of photovoltaic modules and other equipment for many Japanese developers.

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“As per the last amendments to Renewable Energy Act, solar projects have to meet strict deadlines to reach commercial operation, the government has released an aid to help the projects bound by power purchase agreements (PPAs).

“In the $1.1tn stimulus package, the government has made provisions of $1bn for the development of onsite renewables which are expected to support corporate power purchase agreements (PPA) under their commitment to the RE100 initiative.”

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