Japan 's wind power companies hope a new law approved in the wake of the country's nuclear disaster will be a big boost for a sector which for now holds only a tiny share of the energy mix, but they are waiting to see details before they start cheering.

Last month Japan 's Diet passed a renewables law obliging the 10 regional power utilities to buy all the electricity offered to them by wind, solar or biomass operators at fixed prices from July 2012, but key details like the level of feed-in tariffs and their duration are not yet set.

"It is a step forward," said Tetsuro Nagata, the president of Eurus Energy Holdings Corp., Japan 's largest wind power company by capacity, adding "we need at least Y20 per kilowatt-hour."

Expectations for "a wind-power Big Bang" had risen since the Fukushima Daiichi nuclear power incident in March, and Eurus had been approached by many wind power equipment makers seeking new orders, Nagata said.

Before the disaster, renewable energy, excluding hydro power, provided just 1% or the electricity used in Japan , the Federation of Electric Power Companies of Japan says, with wind's share just 0.4%.

That's due to the relatively high cost of renewable energy and because tough planning regulations and high land costs have been a disincentive onshore while extreme weather conditions in some areas have discouraged offshore wind farm development.

By contrast, 30% came from the 54 reactors in Japan 's nuclear fleet, only 11 of which are now on-line, while gas, coal, hydro and oil accounted for 30%, 25%, 8% and 6%, respectively.

Eurus is a unit of Tokyo Electric Power Co. (9501.TO), the owner of the damaged reactor complex.

While Tepco now faces huge challenges on many fronts including finance, this won't stymie future wind farm development, because Eurus funds its projects via project financing.

Also, Nagata said, Eurus more than doubled its capital in early 2010 to Y40 billion, funds it can use to buy stakes in projects.

Eurus has around 527 megawatts of Japan wind power projects in operation, complemented by 820 MW in Europe and 632 MW in the US , according to its website.

Key to the law's success is if feed-in tariffs are set high enough to prompt investment, said Satoshi Waseda, an analyst with Mitsubishi Research Institute.

About 200 companies in Japan have wind farms or are developing them, although nearly of them are very-small scale, with less than five turbines. Electric Power Development Co. (9513.TO), or J-Power, is Japan 's second largest wind power company by capacity.

Διαβάστε ακόμα