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More precisely, that's one main purpose of the high rates for the first three years. And in three years, I don't expect more than a blunt (that is much less than say 60 GW of solar and 40 GW of wind): the growth speed of an industry and the amount of capital that can be drawn isn't infinite even if profitability will be stellar.
I'll be honest, I haven't taken the time to read through the law in detail. I was only responding to usurious solar FiT rates. Good FiT policy should be designed to foster economies of scale. The problem with solar PV is that it doesn't exhibit these. The net effect of growth is mathematical not geometrical. Doubling the manufacturing capacity of a panel plant doubles the output of the end product. Money poured into wind turbine production will help fuel increases in the size of wind turbines, mathematical increases in their radius result in geometric increases in their swept area, and electrical generation.
Your word choice makes me curious: by the "FiT regime" that may be harmed, do you mean the institutional framework or the plants working under the FiT taken together, or the whole renewables sector (including suppliers)? Either way IMO the danger is in the collapse of the manufacturing and installation industry if degression sets in too hard. But I don't think enough renewables will be installed in three years to seriously impact electricity prices and thus give a valid justification to destroy the institutional framework; and the way the rates are set, producers who install their plants in the next three years will be unaffected by future degression, not to mention conventional fuel competition.
I'd repeat Thomas's comments below, with a caveat. In the short term, given the tremendous expense of natural gas in Japan, this program probably will help to drive down consumer prices. Again, I haven't taken the time to read the law in detail, so I am interested in what you have to say about the rates being high for three years. The question I'd ask is how this plays out. First, what is the rate after the three years? Second, will panels installed in the first three years receive the full rate for the 20 year term?
As Germany and Spain have shown, two to three years of mania can produced a PV solar sector dominated by rooftop installations which consume the majority of FiT budgets while producing a small fraction of the renewable power in a country. Japanese interest rates are extremely low, which suggests that you're going to have a repeat of what happened in Europe.
Finally, you talk about the manufacturing and installation industry. This is really quite simple. There will be no manufacturing industry in Japan spurred on by this policy, instead what will happen is that Japan will suck up the excess capacity of Chinese suppliers for a few years. PV solar production is driven by the cost, not the quality, of labor. Moreover, the 2015-2020 period is likely to be one in which natural gas prices in Japan plummet as LNG imports from the US resume, at much increased scale, and China/India experiment with shale gas. It won't last, but that won't matter.
FiTs are a poor fit for solar PV. Panels can make sense for individual consumption, but they simply aren't efficient enough to warrant their integration into the grid. As such, policies targeting their installation should focus on financing instead of production incentives. Moreover, as a matter of decreasing CO2 emissions, and creating fuel price declines, support for solar water heaters is probably a much better choice.
PS, thanks for the link to more recent IEA stats. And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
Obviously, but economies of scale are about costs, not capacity. A plant with double the capacity costs less than twice, especially if development costs (of both the product and the machinery) are taken into account. The part of the spread of mass production in the PV price cuts in recent years is generally recognised.
Money poured into wind turbine production will help fuel increases in the size of wind turbines
As well as their price, and also the distance between two neighbouring turbines in a wind farm. It's not that easy to evaluate whether unit costs reduce. (You also confused the economies of scale from the increase of manufacturing capacity and the economies of scale from the increase of the output of a single plant.) *Lunatic*, n. One whose delusions are out of fashion.
Me neither as I haven't seen a link to a full English translation, but you could have read my short summary of rates upthread.
what is the rate after the three years?
First, the Japanese FiT seems to be like the German one, that is, producers get a fixed rate set at the time of grid connection and guaranteed for 20 years (with sub-10-kW, that is residential rooftop PV being the exception, getting it for 10 years only). Second, this rate for new installations can be revised by future governments. The current law wants to maintain the current level for three years, and as far as I know the degression thereafter is not set.
As Germany and Spain have shown, two to three years of mania can produced a PV solar sector dominated by rooftop installations
Yawn. We have been through this before: no, the Spanish and German solar booms were quite different, with on-ground solar dominating in Spain (due to a lack of differentiation of rates; Japan's 10/20-year running time differentiation will further enhance the effect). What has been similar in both countries however is that legislators wanted to curtail on-ground installations (because of conflict with agriculture), not rooftop.
consume the majority of FiT budgets while producing a small fraction of the renewable power in a country
We have been through this, too.
The development of domestic industry (with cheap foreign competitors as a given) doesn't depend on the feed-in law alone, but tariffs, industrial subsidies and quality control, too (low-quality solar cells don't produce as much for as long, a reason Chinese producers haven't killed European ones off completely). But my point was not restricted to new manufacturing (what you speak about) or even just manufacturing.
the 2015-2020 period is likely to be one in which natural gas prices in Japan plummet as LNG imports from the US resume
You said his before, but didn't explain what it effects will be (hence my question "by the "FiT regime" that may be harmed, do you mean the institutional framework or the plants working under the FiT taken together, or the whole renewables sector (including suppliers)?").
they simply aren't efficient enough to warrant their integration into the grid
What meaning of "efficient" is this now? I think a contribution like below is rather efficient, however:
as a matter of decreasing CO2 emissions, and creating fuel price declines, support for solar water heaters is probably a much better choice.
You make it an either-or... Germany has both. (And the neolib anti-solar lobbyists in the federal government attacked both, not just PV.) *Lunatic*, n. One whose delusions are out of fashion.
eh.. one second.
Hmm. Okay, the japanses government is correct and solar gets hardcapped by running out of suitable spaces at 15%, and the reactors all get turned back on, natural gas imports will fall off a cliff. There is enough hydro in the islands to produce a nearly completely flat demand curve for baseload, assuming 15% solar. Still going to have to build at least a dozen new reactors to get to a completly carbon free power sector. Substantial wind build will wreck havoc with this logic since wind is far more wedded to gas.
What amounts are we speaking about? I tried to look, and found these figures:
And the rush is on. There are 18 bcfd of export projects here. On the West Coast alone there are 4.1 bcfd of proposed project, which are likely going to go to Asian markets. Using your conversion factor, that's 0.41 TWh daily. Divided by 24, you get something 17,000 MW of capacity. Or ~15% of total electrical generation.
Even if the Japan isn't supplied entirely from North America, this is going to seriously drive down costs.
And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
Heated debate over the impact of liquefied natural gas exports on domestic prices is threatening to derail them at a crucial time for the U.S. industry....Massachusetts Rep. Edward Markey, a top Democrat on the House Natural Resources Committee, is pulling out the stops to slow exports. He began worrying about the impact of liquefied natural gas (LNG) exports on U.S. prices, when he saw permit applications piling up at the Department of Energy. So, Markey and Sen. Ron Wyden, D-Ore., another key voice on U.S. energy policy, introduced bills requesting a timeout on LNG permit approvals until 2025....As a result, only one U.S. terminal has been given the go-ahead. A dozen-plus others are on hold, any regulatory action delayed until an Energy Department study on the economic impact is completed later this the year.
...Massachusetts Rep. Edward Markey, a top Democrat on the House Natural Resources Committee, is pulling out the stops to slow exports.
He began worrying about the impact of liquefied natural gas (LNG) exports on U.S. prices, when he saw permit applications piling up at the Department of Energy.
So, Markey and Sen. Ron Wyden, D-Ore., another key voice on U.S. energy policy, introduced bills requesting a timeout on LNG permit approvals until 2025.
...As a result, only one U.S. terminal has been given the go-ahead. A dozen-plus others are on hold, any regulatory action delayed until an Energy Department study on the economic impact is completed later this the year.
Shale Gas Reality Begins to Dawn SUNDAY, JUNE 24, 2012 The Automatic Earth It has long been our position at The Automatic Earth that North America is collectively dreaming with regard to unconventional natural gas. While gas is undeniably there, the Energy Returned On Energy Invested (EROEI) is dramatically lower than for conventional supplies. The critical nature of EROEI has been widely ignored, but will ultimately determine what is and is not an energy source, and shale gas is going to fail the test.
It has long been our position at The Automatic Earth that North America is collectively dreaming with regard to unconventional natural gas. While gas is undeniably there, the Energy Returned On Energy Invested (EROEI) is dramatically lower than for conventional supplies. The critical nature of EROEI has been widely ignored, but will ultimately determine what is and is not an energy source, and shale gas is going to fail the test.
By the way, the New York Times article with the internal memos is here (the article at The Automatic Earth only links to the document viewer itself). *Lunatic*, n. One whose delusions are out of fashion.
Prices for gas in the US have been exceptionally low lately, due to a combination of really weak demand from the recession and a burst of production from fields where investment took place during the high price years and which are selling gas at marginal cost today (which are largely unsustainable in the medium term). The volumes from shale gas are not so big as to allow for a lot of exports before you run into serious price hikes.
So the early LNG export projects will make a killing, but not many will be built in the end. The people really making money are those that had contracts to export LNG to the US and have the physical capacity to turn these cargo to Europe or Asia (i.e. the contractual right to send the gas elsewhere on a spot basis and share the profits with the US importer, and the availability of LNG tankers to do so). Wind power
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