August 29, 2018 / 9:02 AM / a month ago

UPDATE 1-Japan's Kyushu Electric may restrict renewable energy supplies after nuclear ramp-up

(Adds comment, detail)

By Osamu Tsukimori

TOKYO, Aug 29 (Reuters) - Kyushu Electric Power Co may start restricting third-party supplies of solar energy after it restarts a fourth nuclear reactor, the company said on Wednesday, underscoring the risks to a government push to boost renewable energy.

Japan’s fifth-biggest utility by sales plans to restart the No. 2 reactor at its Sendai station later on Wednesday, giving Kyushu the most nuclear generation since the 2011 Fukushima disaster led to the shutdown of Japan’s atomic power sector.

The move could lead to possible restrictions on the purchase of renewable energy as early as next month, a Kyushu spokesman told Reuters, declining to be identified because of company policy.

“Output restrictions can occur when power demand is low and solar power generation is high, such as in the autumn, spring or at the year-end and beginning of the year,” the spokesman said.

The Fukushima disaster prompted a shift in Japan toward renewable energy, backed by mandatory preferential rates for solar, wind and other supplies.

Introduced in 2012, the preferential rates, known as feed-in-tariffs, were at the time among the highest in the world, sparking a rush of investments by startups and other companies.

Only one of Japan’s other nine nuclear operators, Kansai Electric Power Co, the country’s second-biggest utility by sales, so far has reactors running.

However, the slow return of nuclear, which once accounted for 30 percent of Japan’s electricity generation, is now threatening the once-guaranteed income for operators of renewables.

The government changed regulations in 2015, allowing the old utilities, which control the country’s transmission grids, to restrict supplies of renewable energy from their solar or wind farms if they deem it necessary to maintain grid stability.

The orders can be made at short notice and without having to pay compensation.

Solar power has grown particularly fast on the island of Kyushu, where Kyushu Electric operates, because of plentiful sunshine and available land.

“Given the increase in solar capacity in Kyushu it is not necessarily a surprising event and we have seen this type of thing happening in Europe where renewables have grown fast,” said Professor Yoh Yasuda, project professor of renwable energy economics at Kyoto University.

Kyushu had 8 gigawatts of solar capacity connected to the grid at end-June, just shy of the 8.2 gigawatts that a government committee estimated in 2016 would be the maximum the utility could take without curtailment.

Should Kyushu start restricting supplies the curtailment may affect as much as 4.2 gigawatts of the available capacity, the spokesman said, adding suppliers would be given a day’s notice. (Reporting by Osamu Tsukimori; writing by Aaron Sheldrick; editing by Richard Pullin)

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