JETFUEL – 1 October 2022

JETFUEL – 1 October 2023

• Reduction in wind permitting delays. The Japanese government is seeking to streamline the process for offshore wind farms to gain approval for new projects. In Japan, new operators traditionally have to go through a four-step multiyear assessment and permitting process before they may begin construction at selected sites. However, the government is doing away with two of these steps in an effort to reduce the lengthy process and promote growth in the sector. Though not officially approved yet, Environment Minister Akihiro Nishimura said that the government hopes to introduce new legislation “as soon as possible.” This update follows goals set several years ago by the Ministry of the Environment to source 10 gigawatts (the equivalent of 10 nuclear reactors) from wind energy generation by 2030. 

• Energy Storage Woes: In late September, the utility Kyushu Electric Power Co. in Southern Japan announced that power would be free on select October and November afternoons as the grid experienced more solar generation than it could handle. The free electricity will only be available to about 120,000 households in Kyushu, which has some of the best weather in the country– at least for solar generation. The nature of the island limits the utility provider’s ability move excess energy onto the mainland, which is what has made their energy market particularly sensitive to excess power. In the past year, solar farms were asked to halt output 11 times between October and November of last year, and 54 times between April and August this year
  • Itochu’s Batteries: Japanese trading house Itochu announced in August that it has launched a partnership with several other companies to explore massive Lithium-ion battery farms to store electricity. Itochu expects that demands for energy storage will increase for reasons similar to the issues plaguing Kyushu’s grid this fall. Power variation from renewables is relatively unpredictable, and storing energy from windy and sunny days is a lot better for the environment than reigniting natural gas plants. The prototype facility is expected to have a rated output of 1.8 megawatts and a capacity of 4.9 megawatt hours.

• The biggest LNG Importer of 2022 is back in force. As the temperature finally drops across Japan this week, LNG demand is expected to decrease as regional air conditioning use plummets. Major power providers have re-entered the market and bought spot cargo contracts this fall while the prices are subdued, and the country will begin replenishing its LNG levels. The seasonal lull in demand is expected to abate in the second half of November, when households and businesses turn back on the power to facilitate electric heating in the winter. At the same time, national power capacity decreased this month– though this was to be expected as some power plants entered regular maintenance during the fall season.