Renewable energy companies base their hopes on Taro Kono’s victory for Japanese Prime Minister

Presidential candidate of the ruling Liberal Democratic Party, Taro Kono, the minister in charge of vaccinations, attends a debate organized by the Liberal Democratic Party, the Youth Bureau, the Women’s Bureau at the party headquarters , in Tokyo, Japan on September 20, 2021. Philip Fong / Pool via REUTERS

TOKYO, Sept. 24 (Reuters) – Renewable energy companies are betting that the main contender in the race to become the next Japanese prime minister, Taro Kono, will trigger changes that allow for better market access and a fairer playing field after years of neglect.

The 58-year-old has long championed more renewable supplies in the roughly $ 150 billion electricity sector in Japan, the world’s largest national electricity market outside of China, and has promised an economic stimulus package focused on renewable energies if he wins.

Investors bought renewable energy shares in hopes that the popular Kono would win the September 29 vote for the next leader of the Liberal Democratic Party (LDP) and – by virtue of his majority in parliament – become the next Prime Minister of Japan. Read more

Japan’s energy mix is ​​already changing, with the rise of renewable energies, replacing the fossil fuels that powered electricity after the Fukushima nuclear disaster in 2011.

Kono, a former defense minister and descendant of a political dynasty, is currently in charge of administrative reform and has clashed with the powerful Ministry of Industry (METI), which, like the Steel Federation, has supported a revival of the moribund nuclear sector.

“Kono has been rushing to deregulate over the past year, and a lot has changed. Japan’s energy shift will continue to progress if Kono is elected,” said Mika Ohbayashi, director of the Renewable Energy Institute founded by SoftBank Group Corp. (9984.T) General Manager Masayoshi Son.

Renewable energies have also received a boost from the pledge made by outgoing Prime Minister Yoshihide Suga last year to align Japan with Europe and declare a goal of carbon neutrality by 2050.

“The attitudes of METI officials have changed dramatically. Their attitudes towards renewable energy startups were rather cold, but they cannot afford to continue this position,” said Koki Yoshino, managing director of Japan Renewable Energy, who operates nearly 50 wind and solar projects.

In 2018, a panel convened by Kono, then foreign minister, sparked controversy by engaging in the energy debate, normally reserved for METI, backing a call to get rid of nuclear power and coal while significantly increasing renewable energies.

Last year, Kono set up a task force to remove regulatory barriers hindering Japan’s switch to renewable energy.

The world’s third-largest economy and fifth-largest carbon emitter rely heavily on imported fossil fuels 10 years after the Fukushima disaster nearly killed its nuclear sector, the source of one-third of Japan’s electricity before 2011.

Renewables are quickly catching up and accounted for 22% of Japan’s energy supplies last year, hitting a recent government target a decade earlier than expected and even contributed more than coal in a quarter.

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Despite this growth, critics say the METI has introduced rules that make it easy to force shutdowns of solar power plants, called cutbacks, when supplies are plentiful.

Connections for renewable energy projects are also blocked at the whim of established companies, Kono said on its homepage where it describes its policies.

Rules governing the use of a major transmission line that connects the main island of Japan to Hokkaido in the north need to be revised to allow more renewables into the mix, Kono said.

Electricity transmitted by the line must be declared one day before the actual transmission, making it difficult for weather-dependent renewables to use the line, which is currently underutilized, to transmit electricity to Tokyo. , he said.

The METI has increased the renewable energy production target from 36 to 38% of Japanese electricity by 2030, from 22 to 24%, and has established auction rules for offshore wind, the one of the fast growing sectors in other parts of the world. Read more

Renewable energy is also popular, and opinion polls show consumers, still wary of nuclear power, want more greener options, while leading companies have lobbied the market. government to relax regulations so they use more emission-free sources.

Yusuke Kojima, director of Looop Inc, an electricity retail start-up that also sells solar power plant and storage battery products, said he hoped Kono would support the industry and said the recent policy changes marked a big change for his business.

“In the past, we couldn’t prioritize renewables because Japan as a whole didn’t see them as a primary energy source. But the commitment to carbon neutrality and other policies mean that the energies renewables are now on the table, ”Kojima said.

Carbon dioxide emissions by region

Reporting by Kiyoshi Takenaka, Sakura Murakami and Aaron Sheldrick; Editing by Antoni Slodkowski and Michael Perry

Our Standards: Thomson Reuters Trust Principles.

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