Solar Energy Generation Underpinning the Economic Growth of Kyushu

Kyushu has experienced a surge in the installation of mega-solar power plants (large-scale solar power plants) under the Feed-in Tariff (FIT) program for renewable energy sources. When we consider Japan by region, Kyushu has the largest power-generation output. Lately power plant subdivision businesses have thrived, spearheading the economic growth of the Kyushu region.



The Majority of Plant Locations Are Intended for Electricity Businesses

According to a survey (flash report) on plant location trends among the seven prefectures of Kyushu, as published on March 28 by the Kyushu Bureau of Economy, Trade and Industry, the number of plant locations in 2013 doubled from the previous year (167) to 333, approaching the high level (340) achieved 21 years earlier, in 1992. The electricity industry, which includes mega-solar businesses, has played a huge part in this increase. The number of plant locations for electricity businesses increased from the previous year’s 77 to 261, an increase of 340%, accounting for roughly 80% of all.

The same bureau also simultaneously released data indicating that the certified status of power plants under FIT as of the end of December 2013. According to that data, the total energy output of certified power plants in the seven prefectures was 7,180 MW, out of which 7,010 MW (a component ratio of 97.7%) was solar energy.

Of this, 3,810 MW was generated by mega-solar power plants, which was the highest among all regions of Japan, including Kanto (3,460 MW). Moreover, it accounted for approximately a quarter of the nation’s total energy output generated by mega-solar power plants. This output level is equivalent to that of roughly four units of the Sendai Nuclear Power Plant (rated output of 890 MW), which is currently undergoing safety screening by the Nuclear Regulatory Commission in order to resume operation.   


Power Plant Subdivision Spreading Among Small and Medium-Sized Businesses

A surge in the installation of large mega-solar power plants has been seen in the coastal industrial zones of Kyushu. In Kagoshima City, the construction of the Kagoshima Nanatsujima Mega Solar Power Plant was completed in November 2013. This power plant is operated by the Kagoshima Mega Solar Power Corporation, which was co-founded by seven companies (including Kyocera). It has a power output of 70 MW, and its annual electric-generating capacity is equivalent to the annual electric power consumption of 22,000 general households, enough to cover 2.2% of the total electric power consumption within Kagoshima Prefecture.

Miyama City in Fukuoka Prefecture has the Kyushu Solar Farm 7 Miyama Joint Power Station. It’s a project of Shibaura Group Holdings Co., Ltd. (headquartered in Kokuraminami-ku, Kitakyushu City), in which the power-generating facility with an output of 23 MW has been divided into 13 sections for sale to investors. The power plant subdivision movement has also spread among small and medium-sized businesses.


A “Goldmine” of Energy Sources

Kyushu Economic Research Center has announced that the growth rate in the real GRP (gross regional product) of the Kyushu region (including Okinawa) in FY 2014 is expected to increase by 0.9% over the previous year. Among the mega-solar facilities certified as of the end of December 2013, the proportion of those in starting operation stood only at 21.6% on the basis of the number of facilities and at 11.8% on the basis of output. Thus, investment in facilities that have yet to start operating is expected to remain at a high level.

The cost of procuring solar panels has been coming down and the Ministry of Economy, Trade and Industry has lowered the purchase price for solar energy to 32 yen per kilowatt-hour (excluding tax) for FY 2014. The price will most likely continue to decline, and greater attention may also be paid to other renewable energy sources, including geothermal heat, small/medium hydropower and biomass.

The Kyushu region has “the innate qualities” necessary for the production of these renewable energy sources. First of all, there are hot springs scattered throughout the region. The heat from hot springs can be used for binary power-generating systems, which generate electricity by spinning turbines with the power of the steam produced through the process of heating and evaporating a low-boiling-point medium. Accordingly, it is possible to make effective use of unharnessed thermal energy. The mountain areas are suitable for small/medium hydroelectric power generation that utilizes the sloping terrain. Furthermore, technical development and the application of biomass energy production from forest thinning and waste from agriculture/livestock industries are expected to take place in the near future.

Kyushu is perhaps the only region in Japan that has such a wide variety of renewable energy sources. In fact, Kyushu is likely to lead Japan’s energy industry in a new direction with renewable energy.

A success of the third arrow of Abenomics–a growth strategy–is essential for the sustained development of Kyushu’s economy, since it will prompt increased capital investment in all industries.  

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