Starting in April 2024, generation assets in Japan that are not under a FIT or a FIP obtained before this deadline must pay generator wheeling charges (発電側課金) to their regional grid operator. These charges consist of a basic charge (~90 ¥/kW/month) and an energy charge (~0.3 ¥/kWh). However, a discounted rate applies to the basic charge for assets built in special zones defined by the grid operator. These costs are regulated and revised every five years (after a first update in FY2027), alongside the retail generation charges. As these costs are correlated with grid expansion and maintenance expenses, it is likely that they will increase in the future.
Generator wheeling charges represent a significant cost for renewable asset owners. The potential future increase complicates the ability to account for these costs when signing fixed price PPAs over 20 years, as is currently common. The entity holding the generator wheeling contract with the grid operator is responsible for paying these charges. In practice, this means that the retailer (in physical PPAs) or the trader (in virtual PPAs) is liable.
How these charges will be passed through to the asset owner and the PPA off-taker, and who will assume the long-term price risk, remains uncertain but will be part of PPA negotiations by all the involved parties in the incoming deals.
Source: METI