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According
to the statistics for 1996, 62% of Japan's total supply of
electricity came from thermal power plants. Hydroelectric
power accounted for 19% and nuclear power for 18%. Japan
started using nuclear plants to generate electricity over
30 years ago, and the share of nuclear power has been
rising gradually.
The
largest single source of energy for thermal power plants
is gas (liquefied natural gas, or LNG), which accounts for
25% of the total. Next comes oil, at 18%, followed by
coal, at 15%. Various renewable energy sources are also
used, like solar energy, geothermal energy (using heat
from the earth), and also wind and wave power. One
interesting power source is trash! At nearly 160 out of
the 1,900 waste disposal facilities around Japan, the
energy from incinerators is being used to generate
electricity, producing about 659,000 kilowatts of power
that would otherwise "go up in smoke."
Deregulation
Gives Japan's Energy Market a Charge
Households
that generate their own electricity have begun selling it
to power companies; though the quantities are not large,
households equipped with solar panels are selling a
growing volume of surplus electricity to these buyers.
Waste treatment plants that generate electricity by
burning garbage are selling more and more of their surplus
to the power companies as well. Furthermore, since 1995,
when restrictions on electric power wholesaling were
relaxed, companies, such as steel manufacturers, have been
entering the power-generation business one after another.
If this trend takes hold, the mainstream, it can be
expected to bring many benefits; for example, it could
alleviate the problem of finding sites for new power
plants and could lower rates by increasing competition.
Sudden
Growth in Power Supply from Incineration Facilities
There
has been a sharp rise in power generation from new energy
sources that reduce the burden on the environment by
minimizing CO2 emissions or by recycling resources. The
impetus for this trend is a program instituted in 1992
that encourages electric power companies to purchase the
excess electricity generated privately. Also, in 1997, the
government passed the Law Concerning the Promotion of the
Use of New Energy to provide subsidies and other support
measures.
According
to the results of a 1996 survey by the New Energy
Foundation, an organization affiliated with the Ministry
of International Trade and Industry, electric power
generated by local governments and other new sources
reached about 3 million kilowatts, equalling the average
output of three nuclear power plants and accounting for
1.4% of the electricity generated by all power plants in
Japan. Of this amount, 78% was generated on a small scale
by a means long used to generate electric power: the
natural flow of water, such as that for irrigation
purposes. Solar energy generated only
1,300
kilowatts and wind power only 3,000 kilowatts of electricity, but the
incineration of garbage to generate electricity has grown sharply in
recent years.
Solid-waste
treatment plants generate electricity from the heat produced by
burning garbage. Of the approximately 2,000 such plants in Japan,
about 160 now generate electric power by this means. Together, they
produce about 650,000 kilowatts of electricity. Local governments are
increasingly turning their waste treatment plants into
power-generating facilities, and there are now 19 plants in Tokyo
Prefecture, 17 in Osaka Prefecture, 14 in Kanagawa Prefecture, and 12
in Saitama Prefecture that generate electricity. The amount of
electricity produced by these plants is about three times that of five
years ago, and is equivalent to the amount consumed by 200,000
households. The plants use the bulk of this power themselves and sell
only about a third of it to electric power companies. However, MITI
estimates that by fiscal 2010, the amount of electricity generated by
these plants will reach 4 million kilowatts, thanks to an increased
number of power-generating incineration plants and better equipment.
The volume sold to power companies is expected to grow accordingly.
Another
noteworthy trend is the emergence of arrangements by private citizens
to generate electricity for their own use. A citizens' group in
Tokyo's Edogawa-ku is now engaged in facility, financed by citizen
donations and lending from non profit groups. The citizens' group is
installing solar panels on the roof of a new building under
construction at a local temple, and plans to generate 5 kilowatts of
electricity, of which some will serve as the power source for the
temple's reception hall, and the remainder will be sold to the Tokyo
Electric Power Company. After using this revenue to pay back its
loans, the citizens' group will apply future revenue toward
constructing its second and third power-generating facilities. By
building these clean energy installations that leave no undesirable
legacy for future generations, the citizens' group hopes to help
arrest global warming.
New
Market Entrants
Meanwhile,
in an effort to foster competition in the electric power industry,
where monopolies have always prevailed, and to alleviate the problem
of finding sites for new power plants, the Japanese government has
lifted restrictions on the large-scale wholesaling of self-generated
electric power by companies outside the industry. Since this
deregulation in 1995, companies from the steel, cement, petroleum,
chemical, and paper and pulp industries have been jumping into the
electric-power-generation business one after another.
The
electric companies determine how much they are willing to purchase and
solicit bids, then sign sales contracts with the selected companies. A
petroleum refinery in Kyushu became the first to enter the electric
power wholesale business under this system. This refinery, which
invested 25 billion yen to build a power plant on some of its idle
land, has sold 137,000 kilowatts of electricity since April 1999.
Under its current contract, the refinery will supply electric power
for the next 13 years.
According
to this refinery, the advantage of selling electricity wholesale is
that "While profit margins are slim, it's a stable source of
income." The power company, meanwhile, says it is happy to do
business with this new wholesaler because "The cost is lower,
since the bid price doesn't include the costs of land and transmission
lines."
Thus
far, Japan's nine power companies have purchased some 7 million
kilowatts of electricity from wholesalers and say they hope to meet
over 10% of future increases in demand through such sources. Electric
power is much more expensive in Japan than in Europe and the United
States, where wholesale arrangements have been in place for a long
time. Ideally, the entry of new sellers into the market will lower
prices for everyone
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