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“Local generation and consumption” of renewable energy gradually spreading nationwide

  • November 1, 2021
  • , Nikkei , p. 17
  • JMH Translation

Efforts to “consume locally produced” power generated from renewable energy are spreading nationwide. Such efforts involve building distribution networks called “microgrids,” which limit power distribution to certain areas such as local governments. In the event of a natural disaster, the microgrid would supply power independently from the major power supply network. In addition to mitigating the impact of natural disasters, such efforts will lead to the expansion of renewable energy. Kandenko and other companies have begun to commercialize their projects amid deregulation of the power industry.


Kandenko will work with Isumi City (located in Chiba Prefecture) and TEPCO Power Grid (TEPCO PG), a power transmission and distribution company, to build a microgrid in Isumi. The grid is slated to go online in February 2023. Kandenko will install solar panels on the roof of the city hall and junior high school. Some 700 million yen will be invested in the project, part of which will be covered by subsidies. TEPCO PG and the local government will not incur any financial burden.


Chiba suffered a large-scale power outage when typhoon Faxai struck in 2019, and it took about 10 days for power to be restored. Learning from that experience, the Ministry of Economy, Trade and Industry (METI) now offers subsidies to allow companies that are affiliated with power companies but do not deal with power distribution to be self-sufficient in power in the event of a large-scale power outage. To date, four projects have been launched across Japan to create such a system.


Trustbank will start construction of a microgrid in Akune City (Kagoshima Prefecture) in 2022. Trustbank will install solar power generation equipment with an output of 1,900 kilowatts on the roof of the city hall and in parking lots.


The Japan Research Institute will collaborate with 15 companies, including electric power utilities, railways, and oil wholesalers, in Kitakyushu City from 2022 to launch a verification test to locally produce and consume power generated by household solar panels and biomass power plants. Locally owned electric vehicles (EV) will be utilized as storage batteries. The aim of the test is to create a system that does not send electricity to the power grid but rather allows power generated locally to be consumed locally without creating a surplus.


The “power distribution business license system” to be launched in April 2022 will support the construction of microgrids, which are indispensable for local production and consumption of renewable energy. The system is still at the system-design finalization stage. Essentially a “deregulation” of power distribution, the system enables private companies to rent or take over the distribution lines of major power companies and operate the distribution network. This system will enable companies that are not power transmission companies to distribute power within a certain geographical area in peacetime. (Abridged)

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