Japan's Prime Minister Naoto Kan attends a news conference on his resignation

Japan passes key renewable energy reform

Japan has formally approved a scheme to improve investment in green energy including solar and wind power.

Japan is trying to overhaul its energy policies after the March earthquake and tsunami triggered a nuclear disaster that shattered public confidence in atomic safety and delayed the restart of idled plants. Costly oil and gas imports have soared.

Lawmakers say a national scheme starting next year that rewards green energy investments is part of the solution to replace lost power generation capacity and move the country away from new nuclear investment.

The laws will require utilities to buy any amount of electricity generated from solar, wind, biomass, geothermal and small-sized hydro power plants at preset rates for up to 20 years.

The government has said it wants the feed-in tariff scheme to boost capacity of the five renewable energy types by more than 30,000 megawatts (MW) over a decade.

But the bill leaves key details unresolved that could ultimately dilute its impact on energy policy.

These include the price to be paid by utilities for each type of green energy, which will be decided by a parliament-appointed panel not set to meet until next year.

Japan's lower house of parliament passed the bill earlier this week but needed final approval from the upper house, which came the same day that Prime Minister Naoto Kan confirmed he would step down.

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