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Corporate Japan pledges full shift to renewable energy

The trend to prompt power companies to invest in grid networks

A mega solar power plant in the northern prefecture of Aomori. The liberalization of Japan's energy market in 2016 has made more renewable energy plans available to consumers.   © Reuters

TOKYO -- More Japanese companies are promising to source all of their electricity from renewable energy in 10 to 30 years, a trend that could in turn spur investment to bolster grid capacity to accommodate demand.

Tech provider Fujitsu will as early as this month join RE100, the global initiative of major companies committed to 100% renewable power. The company currently sources just 7% of its power from clean energy but plans to achieve a full switchover by 2050.

Retailer Marui Group aims to reach 100% renewal energy by 2030. One of its locations will begin using electricity from wind power supplied by utility Minna Denryoku in September.

RE100 has gained 138 members since its founding in 2014. Big name members like Apple and Google already generate all of their electricity from renewable sources, thanks to investments in such projects as mega solar plants and wind farms.

Copier maker Ricoh became the first Japanese company to join the initiative in April 2017. The list now includes developers Sekisui House and Daiwa House Industry, office supply vendor Askul, restaurant operator Watami, retailer Aeon, Johnan Shinkin Bank and waste collector Envipro Holdings -- with Japan trailing only the U.S. and the U.K. and rivaling Switzerland.

The 10 companies together consume roughly 12 billion kilowatt-hours of electricity per year, equivalent to the output of about two nuclear reactors, said the Japan Climate Leaders Partnership, which is promoting RE100 in the country. Sam Kimmins, head of RE100, expects 50 Japanese companies to participate by 2020.

Japan introduced a feed-in-tariff system in 2012 to spur a renewable energy boom. The full liberalization of the electricity retail market in 2016 has create fresh competition, making various price plans available to consumers.

Tepco Energy Partner and Kansai Electric Power are among the major companies that offer an energy plan from hydroelectric power. Urban Energy will begin to offer a zero-emission plan this month.

American and European companies like Apple are also urging their suppliers to use renewable energy. Some European institutional investors are also using carbon emissions as a factor in investment decisions.

Hurdles remain. Building wind or solar farms is time-consuming and generation costs are relatively high, not to mention that output varies based on the weather. Citing a lack of capacity, power companies are increasingly refusing to connect to transmission networks.

But falling price of solar panel prices and growing size of wind turbines have brought down the prices of renewable energy to below those of thermal power in places like Europe and South America.

Likewise, stepped-up use of clean energy by Japanese companies could help prompt investments that will greatly improve its cost performance.

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