The Renewable Energy Users Network, based on discussions by a working group of 27 companies that are taking the lead on decarbonization, has identified challenges related to renewable electricity procurement and has compiled a list of recommendations for the Japanese government and electricity suppliers.*
*This document summarizes the result of studies conducted during February - May 2023 by a working group of 27 companies. This has been part of the activities of the Renewable Energy Users Network (RE-Users, approximately 2500 members), a forum for information sharing among companies working to expand the use of renewable electricity. Renewable Energy Institute, which operates RE-Users and serves as the secretariat, compiled the recommendation.
[Companies Participating in the Working Group]
In a situation where decarbonization efforts are accelerating throughout the world, many companies in Japan are actively using renewable electricity to promote decarbonization. In response to requests from customers, suppliers, investors, and others, increasing the use of renewable electricity has become a top management priority. However, the share of electricity from renewables in Japan is low at around 20%, and the purchase price is relatively high.
There are many challenges that companies face in using renewable electricity. Based on the opinions of 27 companies that are leading the way in the use of renewable electricity, we have summarized the current major challenges in 10 areas. In addition to issues related to corporate PPAs (Power Purchase Agreements), there are issues related to policies such as the Non-fossil Certificate system and the competitiveness of new suppliers. To resolve these issues, we propose 5 recommendations to the government and electricity suppliers.
Japan must keep up with the tide of decarbonization, and by allowing companies to rapidly decarbonize their businesses through the use of renewable electricity, this will help strengthen the industrial competitiveness of Japan as a whole. Accelerating the use of renewable electricity through cooperation between the public and private sectors is required right now.
［Issues related to corporate PPAs］
1．It takes a lot of time and effort to conclude a contract.
2．Suitable sites for construction of power generation facilities are limited.
3．Unable to obtain cooperation from suppliers. (for physical PPAs)
4．Accounting treatment is not defined. (for virtual PPA)
［Issues related to electricity procurement overall］
5．Limited means of procuring additional electricity.
6．Supply of electricity other than solar power is not increasing.
7．Non-fossil Certificate system is complicated and not easy to use.
8．Growing concerns about environmental impact and human rights issues.
9．Competitiveness of new suppliers is declining.
10．Frequent changes in domestic and international systems.
■ Recommendations (to the government and electricity suppliers)
1．Develop and publish guidelines for corporate PPAs.
2．Promote development of renewable electricity with additionality.
3．Improve the Non-fossil Certificate system in line with international requirements.
4．Establish fair playing fields for electricity suppliers.
5．Enhance domestic development of renewable energy-related technologies.
The importance of the above issues and recommendations are explained in more detail here.
RE-Users Summit 2023: Renewable Energy Procurement for Driving Decarbonization（14 June 2023）