Publication date: Jan 17, 2024
METI Promotes Direct Trading of Non-FIT Non-fossil Certificates
The Ministry of Economy, Trade and Industry (METI) plans to expand the scope of direct trading of “non-FIT non-fossil certificates” (NFCs) for projects converted from Feed-In Tariff (FIT) to Feed-In Premium (FIP). METI Promotes Direct Trading of Non-FIT Non-fossil Certificates
In principle, non-FIT NFCs were set up as a means for retail electric utilities to fulfill their obligations under the Law concerning the Advancement of Energy Supply Structure. Therefore, they are procured by retail electric utilities through a special market designated for fulfilling the obligations related to the above-mentioned law. However, due to high demand from electricity customers for renewable energy value, direct transactions with consumers are also permitted for non-FIT power sources that meet certain conditions.
Growing Demand and Opportunities for Non-FIT NFCs
Currently, non-FIT power sources eligible for direct trading include:
- New non-FIT power sources that began commercial operation in 2022 or later.
- New FIP power sources.
- FIP power sources transitioned from FIT power sources that began commercial operation in 2022 or later.
- Former FIT power sources.
Since FY2022, when direct trading of “non-FIT NFCs” began, the volume of transactions has increased steadily, and METI estimates that it will reach 460 million kWh in FY2024. The consumers using direct trading are diverse, although data centers, real estate, and municipalities are the primary users.
The FIP power sources that have transitioned from FIT status are now subject to direct trading, regardless of when they started commercial operation. For power generators, this is expected to expand sales channels for “non-FIT NFCs” and promote the maintenance of renewable energy sources and the transition of FIT sources to FIP.
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