Generation Charge: Current Discussion and Future Outlook
There have been significant changes from the discussions we outlined in our Japan Renewable Alert 42 regarding the introduction of the generation charge (we referred to generation charge as “producer-side base charge (
hatsuden-gawa kihon-ryokin)” at the time; from now on, however, we will use “generation charge (
hatsuden-gawa kakin)” reflecting the current discussions). As the generation charge will affect cashflow for the entire duration of operations for all power sources, including FIT projects, it is a crucial issue that impacts profitability for developers, operators and investors of renewable projects and has prompted many recent inquiries from our clients. This Alert provides an outline of the current discussions.