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Japan's Largest Mega Solar Project Launched in Oita (page 2)

Funded by project finance

2013/10/04 18:37
Kenji Kaneko, Nikkei BP CleanTech Institute
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As the buying price in power generation projects is fixed for 20 years based on the feed-in tariff (FIT), revenue from electricity sales can be easily estimated; however, risk factors increase due to the long- term nature of the project. According to Koji Shiroishi, senior vice president of the project finance team, Mizuho Bank, when it comes to project finance, it becomes important to understand the hidden risks involved and make adjustments accordingly so each risk can be dealt with by the party most familiar with it. President Masashi Mizoguchi of JGC Mirai Solar said, "We combined several insurance products against disaster and other risks, making a thorough survey of insurance companies both inside and outside Japan."

Finding, Preparing for Hidden Risks

Although EPC contractors select facilities and equipment to be incorporated, banks frequently evaluate their quality and maintenance systems in terms of risk. In this project in Oita, the EPC contractor also selected the materials to be used after consulting with Mizuho Bank's person in charge. As a result, the EPC contractor used solar panels manufactured by Sharp Corp and Solar Frontier K.K. Two different manufacturers' solar cell panels were employed with the aim of reducing risk while assessing the difference in their output properties to accumulate reference data for JGC's future overseas advance in mega solar business. As for the power conditioning subsystem (PCS), the product manufactured by Toshiba Mitsubishi-Electric Industrial Systems (TMEIC) was chosen (fig. 2). The solar panels were set on Nisso Pronity's mounts (fig. 3), which were fixed onto the ground with Nippon Steel & Sumikin Engineering's screw pickets (fig. 4). The mounts are made with Nippon Steel & Sumitomo Metal's high corrosion resistant steel.

Low-priced solar panels imported from abroad have recently been adopted at some plants. However, from the beginning, President Mizoguchi intended to use Japanese panels in light of FIT's intent to have all the power users bear the photovoltaic power generation costs. Mizuho Bank was also moving in the same direction from a risk-averse perspective.

"It is unknown whether the imported panels could maintain their performance for 20 years under the unique Japanese climate conditions such as high humidity," Mizuho Bank's Shiroishi said. "Since many of the low-priced imported panels are inferior to Japanese products in terms of specifications, we consider Japanese products as our basic choice for domestic mega solar projects."

In addition, 38 TMEIC 500 kW PCSes were introduced in view of the product's history, price, maintenance and use for the next 20 years. "We greatly appreciated the manufacturer's 20-year maintenance program, among other benefits, in which maintenance service is provided regularly in accordance with the menu," President Mizoguchi said.

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