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Business Trends

Solar power helps Japan sweat out record heat wave

Utilities increase reliance on renewable as country weans itself off nuclear

A Tepco employee in front of an array of solar panels. Like a number of other Japanese utilities, the company is increasing its solar power capacity.   © Reuters

TOKYO -- As temperatures soared to record highs across Japan this summer and people scrambled to beat the heat, power companies turned to solar power to weather the surge in air conditioner usage.

After the March 2011 earthquake and tsunami, which forced the shutdown of all nuclear power plants -- most of which are still offline -- the Ministry of Economy, Trade and Industry had asked the country to conserve electricity during hot summer months.

But thanks to the rise of solar power, the government has refrained from issuing the requests since 2016, with Trade Minister Hiroshige Seko saying on July 24 that special energy-saving efforts were currently unnecessary.

Utilities usually release their summer power demand forecasts before hot weather arrives. In May, they predicted the hottest summer in a decade, but said they would likely have a 3% supply capacity over expected demand -- the minimum reserve needed to ensure stable supplies.

A representative of Tokyo Electric Power Co. Holdings, or Tepco, said that during times of peak demand, the company can obtain nearly 10 million kilowatts of solar power, or about 20% of total power needed. A substantial portion of this is provided by companies and households equipped with solar panels, which sell their surplus power to the utility.

Before the 2011 earthquake and subsequent Fukushima Daiichi disaster, nearly 30% of Tepco's annual electricity output was nuclear-derived. Now, despite operating no nuclear plants and having suspended operation at two oil-fired power plants, the utility seems to be doing fine.

"It is safe to say that Tepco's strategy hinges on solar power," a company executive said.

Children splash through the water during Japan's record temperatures in July. Abundant electricity supplies and a concern over heat-related illnesses kept the government from recommending energy-reduction measures.

Declining electricity usage has also helped. Peak power demand in summer decreased about 12% in fiscal 2016 from fiscal 2010, due in part to changing public perceptions regarding energy and the rise of energy-saving appliances.

Still, this summer, more than half of Japan's utilities have already recorded higher-than-expected demand.

Kansai Electric Power had thought it had enough capacity but came up short on July 17 and July 18, forcing it to take corrective measures in the form of "negawatt" transactions and power interchanges.

The former involves asking some corporate customers to limit electricity usage, while the latter are energy-share agreements with other utilities -- in this case, siphoning off 1 million kW of surplus power from Tepco and others.

Not that Kansai Electric lacks capacity. In fact, power demand on July 19 exceeded that of the previous day, but the utility managed to meet demand on its own by tweaking its daily energy forecast beforehand.

On July 18, Kansai Electric expected electricity usage to peak at 27.7 million kW -- a call made the previous day -- but between 4 p.m. and 5 p.m., demand unexpectedly rose, hence the corrective measures.

According to industry experts, peak energy usage now occurs in the late afternoon and early evening. "The daily peak is shifting, from around 2 p.m. or 3 p.m. to the evening," said an executive of Shikoku Electric Power. At this time, solar power output drops sharply due to less sunshine, creating supply-demand imbalances.

As regards Kansai Electric, solar power output on July 18 dropped from over 3.5 million kW in the afternoon to 1.6 million kW between 4 p.m. and 5 p.m. The utility said it had anticipated this, but not the high temperatures after 4 p.m.

Since utility companies do not have the capacity to store solar power generated during the day, they must adjust energy distribution to account for its lack in the evening.

Tepco seems to be more worried about power supply in the winter, when days are short, especially in the coldest months of January and February. This makes negawatt transactions and power interchanges all the more crucial.

"The rise of solar power has changed how we operate," said Tepco executive.

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