Storing up trouble in Japan

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Wind power in Japan is taking a battering, but this time it has nothing to do with typhoons and tornadoes and everything to do with the government's willingness to swallow utility tales about the prohibitive cost of adapting the country's power system for greater uptake of wind energy without massive investment in battery storage. Protection of the


multi-billion dollar car industry seems to be playing a role

Hopes for a revival of Japan's wind market still look slim as long as the government continues to put its faith in experiments with battery storage rather than investment in the transmission upgrades and grid network expansion the industry says are needed for development to take off again. With just 1394 MW of wind plant installed by the end of 2006, the country is almost certain to miss its target for 3000 MW of wind by 2010 by several hundred megawatts, even though the government increased its renewables obligation on utilities earlier this year to 1.63% of total electricity generation by 2014, up from 1.35% by 2010.

Japan's utilities have long been reluctant to take on more wind power, arguing that it is costly and that its variable supply risks destabilising grid frequency. Wind power, however, makes up less than 0.5% of Japan's power generation -- akin to "tickling an elephant with a feather," according to one wind integration expert. Nonetheless, back in March 2006, Tohoku Electric Power Company, Japan's fourth largest utility, began requiring wind turbine operators to store electrical output in batteries before it is distributed rather than send the electricity directly into the network.

So far the utilities have presented little evidence to support their claims of the prohibitive cost of integrating wind power into the Japanese system and the resulting disruption they say will be caused to grid networks. In contrast, grid operators running networks with relatively high wind penetration in Europe and North America -- well over 20% in some areas -- have long since discovered that their worst fears proved groundless in practice: power systems can be incrementally adapted to absorb increasing volumes of wind power. The cost of doing so can be less than meeting demand with another generation technology, as Ireland has discovered (Windpower Monthly, December 2004).

An increasing number of independent studies argue the point. A study by Danish system operator Energinet analyses the economic impact of a hypothetical power system based on 100% wind (Windpower Monthly, September 2006). It found the extra system cost reaches just EUR 9/MWh, below 10% of average domestic electricity prices in the developed world. A 2004 report on integrating up to 20% of wind into the British power system described similar findings. Even the International Energy Agency, not known for its positive forecasts for wind energy, acknowledges that the technical barriers to integrating large volumes of wind power "are well understood and current estimates of associated costs of system integration indicate that the economically exploitable potential remains significant."

The IEA further notes in a 2005 report, Variability of Wind Power and Other Renewables, that output swings caused by capricious weather conditions are greatly reduced once large volumes of renewable energy are aggregated into integrated power systems. "It is thus not important to ensure steady supply of every single generator," it says. Using Germany as an example, the IEA points out that wind power could be boosted from around 20,000 MW of installed capacity today to about 36,000 MW in 2015 without any need to add further "firm supply" power plant to boost short and medium term power reserves. Similarly, French grid operator RTE, which although it controls Europe's largest electrical network has little experience with wind power as yet, estimates that short term fluctuations caused by 10,000 MW of wind capacity would not overtax available reserve.

Other motives

None of this seems to have persuaded either the Japanese government or the country's utilities to re-think their policy on major investment in battery storage. The policy, however, has at least as much to do with chasing commercial benefits unrelated to wind power as it does with increasing wind energy penetration on the Japanese grid. Development of energy storage devices, they argue, will not only alleviate the perceived problem of grid instability caused by wind power, thus enabling more wind capacity to be built, but also contribute to the development of a new generation of lithium cells suited to a class of plug-in hybrid electric cars. These, says the government, will replace gasoline vehicles in the future.

"We see the focus on plug-in hybrids and batteries as a strategy with multiple facets," says Haruhiko Ando of the Ministry of Economy, Trade and Industry (METI). Linking wind power and auto batteries will help the country simultaneously tackle climate change, support the domestic car industry while reducing reliance on petroleum imports and slashing gasoline use up to 70%. It will also drive up efficiency at utility companies, according to Ando.

With its leadership in the car development market, there is no surprise Japan is keen to take an early lead in the race to develop effective battery solutions for hybrid cars, but the worry for the wind industry is that it is being increasingly sidelined in the process. Worse still, the facts about the need and cost of transmission upgrades to accommodate wind power are being ignored and wind is being lumbered with large fictitious costs.

Ando concedes that expanding Japan's transmission grid is one option that would help get more wind power to consumers and that this option is the most obvious to observers overseas. But he insists the characteristics of the Japanese market present significant barriers to boosting transmission capacity. The country's topography is a major obstacle, he and others claim. Like many regions in Europe and elsewhere, Japan's windiest areas -- mainly on the Kyushu island, in the south-west and the Tohoku and Hokkaido regions north of Tokyo -- are far from population centres, where the power is needed. Both the public and private sectors are wary of shouldering the financial risk of massive investment in new power lines.

Bulking up the transmission link between Tohoku and Tokyo alone would cost between $8.3 billion and $16.6 billion, Ando says, while boosting the link between the island of Hokkaido to Japan's mainland would cost as much as $5 billion. And that, he says, does not include improving the grid infrastructure inside Hokkaido to accommodate more wind power. Since the country's mandate to reduce carbon dioxide emissions makes thermal plant inappropriate for balancing shortfalls in wind power, Ando asserts that batteries are left as the only viable alternative.

We're special

In addition, unlike Europe, with its highly interconnected "mesh" grids, Japan's long and slender geographical layout and mountainous terrain result in a looser grid configuration characterised by special operational demands that do not favour wind power, according to local grid experts. To keep the grid secure, each electric utility company closely matches demand and supply in their franchise areas, says Toshio Inoue, a senior research scientist at the Central Research Institute of Electric Power Industry in Tokyo. Matching demand and supply in each area requires elaborate management of the power flow on interconnection lines, adds his colleague Toshiya Nanahara. Due to the intrinsic features of the transmission grid configuration, stringent rules have been put in place to control the thermal capacity of the wires (the cooler the wires the more electricity they can take), voltage stability and system frequency constraints of the grid, he says.

It "requires prudent assessment for the use of intermittent power sources such as wind," says Nanahara, crediting this prudence for preventing cascading electric outages, which he says are common on other countries' grids. Nanahara adds he is sure there will still be step-by-step integration of wind power based on recent findings by METI. But this will, it seems, be largely dependent on successful development of suitable batteries.

The government supports utility arguments that wind power must be managed through onsite battery storage. In its recent report, Regarding Subsidies for Connecting Wind Power to the Grid, METI says: "There have been indications that fluctuations in frequency due to changes in wind power output have had a deleterious effect on the quality of electricity." It presented as accepted fact the theory that batteries are the best remedy, adding: "It is appropriate that wind power developers bear the cost of installing batteries in line [with Japan's pursuit of the 3 GW wind target]...the burden of battery installation will grow accordingly."

A boondoggle

Japan's insistence on energy storage for each individual wind plant is a disaster for Japan's wind market, says the wind industry. Prioritising batteries over increased transmission as a solution to grid congestion will do more to brake wind development than help it. Tetsunari Iida of the Institute for Sustainable Energy Policies says government support for batteries is a boondoggle -- an attempt to convince the outside world that big steps are being taken in favour of renewable energy when in reality foot-dragging is the trend. "They're just pretending to fight," he says. "It's political. They know they can't really fight the electrical utilities."

Iida goes as far as to call the linkage of wind power and instability on the grid by utilities as "fake." In January, he co-authored a report calling concerns over stability a "good excuse for [electricity] monopolies to exclude fluctuating wind power" from the grid." The result, the report says, is that Japan's wind market is stagnating despite the introduction in 2003 of a law requiring utilities to include an increasing volume of wind power in their supply mix.

Nuclear favoured

Toshio Hori of renewable energy firm Green Power Investment is equally dismayed, highlighting his disappointment that the 600 MW transmission link between Hokkaido and Honshu is mostly reserved for nuclear power rather than wind power. "If we could only use this transmission line capacity, we would have more capacity to build wind farms," says Hori, formerly with Tomen's wind business. Referring to the estimated $5 billion to boost the link between the island of Hokkaido to Japan's mainland, he says: "Five billion dollars, as a budget for constructing transmission line capacity for wind farms, is not such a big amount, in a sense. There are many ways of creating this kind of money. The question is how to allocate the cost between several utilities and ratepayers. We can do that."

METI, however, has preferred to allocate ´7.6 billion ($65.18 million) in the fiscal 2007 budget to fund more research on batteries for wind power, leaving the wind industry facing an increasingly uphill struggle to convince government that its policy is futile. Faced with a point blank refusal by government to boost transmission capacity for wind and what seems to be growing hostility to independent wind power producers from established utilities, some wind project developers are already abandoning their plans. A bid by Eurus Energy, the country's biggest wind power supplier, to develop a wind farm in northern Japan was derailed after Hokkaido Electric Power said it is cutting purchases of wind power because supply is unreliable. Other developers also describe the situation as dire.

The future now rests on the outcome of the first experiments with battery development and a major wind project still going ahead. In April, Japan Wind Development expects its planned 51 MW wind farm in Rokkasho-mura, in Aomori, to be fully commissioned. It will be equipped with 34 MW of sodium sulphur battery capacity (box). The government affiliated New Energy and Industrial Technology Development Organisation is reportedly covering a third of the battery installation cost at what will become one of Japan's largest wind farms and the first commercial one equipped with batteries. Its success or failure could determine the wind industry's fate in Japan once and for all.

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