Aim	Types of Energy Covered	Utilization Targets	Obligations
Fulfillment of Obligations	Accreditation of Facilities	Enacting Date

To take measures relating to the use of new energy by electricity retailers in order to enhance the
stability of energy supply, thereby contributing to environmental conservation and furthering the overall
healthy development of the national economy.

•	Solar Generation
•	Wind Generation
•	Biomass
•	Medium and Small - Sized Hydro Generation (stations up to 1MW capacity)
•	Geothermal Generation

The Minister of Economy, Trade and Industry establishes annual targets of utilization of electricity from
new energy by electric retailers.
The target for 2014 is 16.0 TWh.

2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014
7.32	7.66	8.00	8.34	8.67	9.27	10.33	12.20	13.15	14.10	15.05	16.00

The Minister for Economy Trade and Industry, in consideration of the usage target, imposes an obligation
on electricity retailers to use a certain amount of electricity from new energy.

1) Calculation Method for the Obligation Amount

Obligation Amount” = “Supply Volume of the Electricity Retailer (for Previous Year)” *

Where

“Usage Target Rate ” = “National Usage Target (for Corresponding Year)” / “National Volume
“Adjustment Rate” = “Rate Accounting for the Situation of Voltage Variation that Necessarily

2) Adjustment Method for the Obligation Amount Transitional Measures

As transitional measures, the following adjustment method has been determined in order to
provide an adjustment over the seven years following enactment of the law (ie, leading up to
the year before 2010) that set practical implementation targets for each retailer based on
their actual prior results;

“Post Adjustment Obligation Amount” = “Pre Adjustment Obligation Amount”

Where

“Adjusted Usage Target Rate" = “Usage Target Rate” - {(“Existing Rate of Use of Top-
“Existing Rate of Use” = “Volume of New Energy Based Electricity Supply (for the year The “Progressive Adjustment Rate” can be found in the table below, with the value corresponding to each progressive year

The Minister for Economy Trade and Industry, in consideration of the usage target, imposes an obligation on electricity retailers to use a certain amount of electricity from new energy.

1) Way to Fulfill the Obligations

An obligation bearing electricity retailer may, choose to meet its obligation from the following options whichever method is deemed most appropriate by economic or other considerations

i.	By generation of electricity oneself
ii.	By purchasing the new energy based electricity from another party
iii.	By purchasing a "New Energy Certificates” from another party

Procedure Details

i.	Electricity retailers must submit their obligation amount of electricity from new energy to the Minister of Economy Trade and Industry by June 1st of each year.
ii.	Electricity retailers must fulfill their obligation to use a volume of new energy electricity in excess of the obligation amount.
iii.	Electricity retailers must make a submission by the following June 1st as to the status of the fulfillment of their obligation. When there is a shortfall of up to 20% of the obligation amount, the shortfall may be carried over to the next period (referred to as 'borrowing').

2) “New Energy Certificates”

i.	The “New Energy Certificates” is managed via an electronic account. Parties that may open an account are new energy electricity generators and electricity retailers. In order to acquire a "New Energy Certificates”, whenever new energy based electricity has been generated, the new electricity generator or purchasing retailer makes a submission. The government accepts the submission and records it in the electronic account as a "New Energy Certificates” (this is to take place on a quarterly basis).
ii.	It is then possible to sell the "New Energy Certificates” that has been recorded in the account to other generators and retailers.
iii.	"New Energy Certificates” are recorded in units of 1 MWh. An ID is attached for each unit of 1MWh.
iv.	"New Energy Certificates” are valid for a period of 2 years, including the year in which it was generated (referred to as 'banking').

3) Recommendations / Orders / Penalties

i.	Recommendations, Orders
	In cases where the electricity retailer has failed to fulfill their obligation without proper reason, the Minister for Economy Trade and Industry may issue a recommendation or make an order for specific performance by a set deadline. The preconditions by which a recommendation is issued is that the obligation amount is unachievable, even when taking into account banking/borrowing and an upper pricing limit (of JPY 11/kWh). Orders are issued in cases where there is no improvement even following the issuing of a recommendation.
ii.	Penalties
	In cases where an order issued under 'i.' above is violated, a fine not exceeding 1 million yen may be applied.

Anyone who generates, or tries to generate electricity from new energy may apply to the Minister for Economy, Trade and Industry for accreditation.

(Accreditation Criteria)

a) Provisions related to accreditation of facilities came into force on December 6th, 2002
b) Provisions related to obligations of electricity retailers shall come into force on April 1st, 2003