Is a Contracts for Difference Scheme the Right Move for the Japanese Energy Sector?
In the wake of Fukushima nuclear crisis, Japan’s energy sector has been in a state of relative uncertainty. Though the government is looking to bolster its renewable energy targets, it is also entertaining the option of restarting its nuclear plants.
According to PV-Tech.org, Japan could soon move to a ‘contracts for difference’ (CfD) scheme similar to the UK’s, effectively overhauling the country’s renewable energy policies. Under the CfD scheme, energy generators would be in competition with one another to provide the lowest price for energy. All generators would also be drawing from the same pool of funding, ramping up competition.
First and foremost, however, the government needs to outline a clear energy policy for the country—something that’s likely to occur by the end of the year. This policy will shed light on the mix of energy the government aims to utilize.
Regardless of the energy mix the government decides on, some are worried CfDs are not the best answer for Japan.
Japan Renewable Energy Foundation’s (JREF) director Mika Ohbayashi believes a move toward CfDs would bolster the country’s argument for nuclear energy.
“They [the Japanese government] are considering CfDs, but the UK is using CfDs to allow it to build new nuclear power plants while Japan is looking to use it to justify restarting existing ones,” she told PV-Tech. “It’s a crazy system I think.”
CfDs, which have found a strong footing in the UK, garner mixed reactions from the renewable energy sector. The CfDs tend to favor large, established companies and energy sources, such as wind and solar. Less established forms of energy, such as offshore wind, have a much more difficult time acquiring a CfD, leading to their disdain for the scheme. With the CfD allocation in the UK much lower than expected, members of the offshore wind industry are concerned about its future.
“Offshore wind developments are huge infrastructure projects with investment lead times of several years,” Lindsay Leask, senior policy manager for offshore renewable at Scottish Renewables, told Wind Power Monthly. “A stable framework which provides certainty and clarity over the long term is therefore absolutely crucial to the sector's success. Without a CfD offshore wind projects simply cannot proceed. The budget for the first allocation round of CfDs was far lower than anyone in the sector had anticipated, has clearly impacted the confidence of existing and potential investors in the sector.”
This then begs the question: Could the same thing happen in Japan and what would it mean for renewable energy? A work group has already been tasked with determining the amount of available capacity on the grid for renewable projects and their findings haven’t been entirely promising. Ohbayashi was skeptical about the approach of the group and their motives.
If a CfD scheme is put in place, nuclear energy is Japan could be a major part of the country’s energy profile. All of this, however, remains to be seen.
All but two UK regions failing on school energy efficiency
Most schools are still "treading water" on implementing energy efficient technology, according to new analysis of Government data from eLight.
Yorkshire & the Humber and the North East are the only regions where schools have collectively reduced how much they spend on energy per pupil, cutting expenditure by 4.4% and 0.9% respectively. Every other region of England increased its average energy expenditure per pupil, with schools in Inner London doing so by as much as 23.5%.
According to The Carbon Trust, energy bills in UK schools amount to £543 million per year, with 50% of a school’s total electricity cost being lighting. If every school in the UK implemented any type of energy efficient technology, over £100 million could be saved each year.
Harvey Sinclair, CEO of eEnergy, eLight’s parent company, said the figures demonstrate an uncomfortable truth for the education sector – namely that most schools are still treading water on the implementation of energy efficient technology. Energy efficiency could make a huge difference to meeting net zero ambitions, but most schools are still lagging behind.
“The solutions exist, but they are not being deployed fast enough," he said. "For example, we’ve made great progress in upgrading schools to energy-efficient LED lighting, but with 80% of schools yet to make the switch, there’s an enormous opportunity to make a collective reduction in carbon footprint and save a lot of money on energy bills. Our model means the entire project is financed, doesn’t require any upfront expenditure, and repayments are more than covered by the energy savings made."
He said while it has worked with over 300 schools, most are still far too slow to commit. "We are urging them to act with greater urgency because climate change won’t wait, and the need for action gets more pressing every year. The education sector has an important part to play in that and pupils around the country expect their schools to do so – there is still a huge job to be done."
North Yorkshire County Council is benefiting from the Public Sector Decarbonisation Scheme, which has so far awarded nearly £1bn for energy efficiency and heat decarbonisation projects around the country, and Craven schools has reportedly made a successful £2m bid (click here).
The Department for Education has issued 13 tips for reducing energy and water use in schools.