No. 87: Increasing the purchase price to foster off-shore wind power generation (October 29, 2013)

Technology:

The government will increase the purchase price of electricity by wind generation next year to correct overreliance on photovoltaic generation and foster off-shore wind generation. The purchase price of off-shore wind generation will be 1.5 to 2.0 times higher than that of electricity by land wind generation. 

Purchase price of renewable energy per one kW/h

	2013	2014 (Planned)
Photovoltaic generation (Capacity more than 10 kW)	36 yen	30-35 yen
Wind generation (Capacity more than 20 kW)	22 yen	Increase the purchase price of off-shore wind generation to 30-50 yen
Medium-sized hydraulic generation	24-34 yen	Remain unchanged
Biomass generation	13-39 yen	Remain unchanged
Geothermal generation	26-40 yen	Remain unchanged

    

The government introduced the system that asked electric power companies to purchase renewable energy at a fixed price. Because it fixed the purchase price of electricity by land wind generation at 22/kW, private companies hesitate to participate in the off-shore wind generation business because off-shore wind generation costs more than land wind generation to construct facilities. Unlike in Europe where wind generation accounts for 20-30% in power generation, wind generation accounts only for 0.5% in Japan. All renewable energies have a combined share of merely 1.6% in power generation. Marubeni plans to construct a large-scale off-shore wind generation plant with a capacity of 240,000 kW that will start operation in 2016. The total investment is estimated at 100 billion yen. 

 Marubeni plans to construct an off-shore wind generation plant 

No. 86: Leading solar cell producers increase solar cell supply by 40% this year (July 3, 2013)

Business Trend:
Five leading solar cell producers including Sharp and Kyocera will increase solar cell supply 40% over the previous year this year. On July 1 last year, Japan enacted the system to purchase renewable energy, and demand for solar cell has been increasing dramatically for the past one year. The market involved in photovoltaic generation is estimated to increase 80% this year, and solar cell producers cannot keep up with the rapidly increasing demand. The five leading solar cell producers increased the total supply capacity 37% over the previous year to about 4,700,000 kW in 2013, of which 90% will be shipped domestically.

Producer	Supply in kW	Increased rate over the previous year (%)
Sharp	1,600,000	21.3
Kyocera	1,000,000	25.0
Panasonic	675,000	25.0
Solar Frontier	930,000	86.0
Mitsubishi Electric	500,000	85.1

      

According to a survey company in the U.S., Japanese photovoltaic generation related market will increase 77% over the previous year to about 1,970 billion yen in 2013 and become the world’s largest market, surpassing the Germany and the U.S. Foreign suppliers are strengthening their sales activities in Japan. They had 23% share in 2012 ad plan to increase the share to over 30% in 2013. Because some predict that the current booming solar cell business is going to create a bubble, companies involved in the photovoltaic business are required to make a difficult management decision.

Excessive concentration on photovoltaic generation is observed in Japan mainly because purchase price of photovoltaic generation in Japan is about two times higher in Germany. In fact, photovoltaic generation facilities account for 90% of all facilities approved by the government for renewable energy generation. Initial investment can be recouped in seven years, and generated electricity can be sold at the same price for 20 years. Accordingly, large companies and investment funds participated in the photovoltaic generation business one after another. As a result, transmission networks suffer from capacity shortage in some areas. At the same time, it is growing harder to secure land for photovoltaic generation today. 

The dye-sensitive solar cell of the world's  highest efficiency

developed by Sharp

 

No. 85: Japan’s largest off-shore wind turbine starts generation coming October (June 26, 2013)

Technology:

A huge off-shore wind turbine to be installed 20 km offshore of Fukushima Prefecture was released to the public. It is currently the largest wind turbine ever built in Japan. It is a floating type wind turbine built by Mitsui Engineering and Shipbuilding. It will start operation coming October. It is 106 m high above the sea when it is installed. The windmill is 80 m in diameter, and the output is 2,000 kW.

Building this off-shore wind turbine is part of the government-funded substantiative experiment, and a total of 11 organizations including universities, trading companies, and shipbuilding companies participate in this project. The project team is scheduled to build the world largest off-shore wind turbine that has an output of 7,000 kW in 2014. Details of this project are available in English. 

 Japan's largest off-shore wind turbine is unveiled. 

No. 84: Kyocera gets an order for its photovoltaic generation system from JA Zennoh (June 24, 2013)

Business trend:

Kyocera got an order for the construction of its photovoltaic generation system in 80 locations with total power generation capacity of 30,000 kW from the National Federation of Agricultural Cooperative Associations (JA Zennoh) for 8,500 million yen as the order for 2013. The company plans to start the photovoltaic generation business at Zennoh’s 500 locations in alliance with Mitsubishi Corp. Kyocera will install 124,000 solar panels and take care of everything involved in photovoltaic generation from system design, construction, and maintenance. 

Kyocera has competitive edge in the technology to put various shapes of solar panels, such as trapezoidal and rectangular ones, with no space between them. Because Zennoh’s plants and livestock barns have various shapes of rooftops, they reportedly outdid Chinese makers that competed with low-priced products. Kyocera plans to increase the production of solar panels 25% over the previous year in 2013. 

Photovoltaic generation on the 

rooftop of a livestock barn

 

No. 83: A new back sheet for solar cells from Fujifilm (June 9, 2013)

Technology:

Fujifilm will put its newly-developed sheets used for solar cells on the market. The sheet is the so-called back sheet attached to the back of a solar cell to protect it from heat, humidity, and ultraviolet. It oxidizes should it be exposed to air and water, but the company increased the durability of the sheet by mixing special compound with polyethylene terephthalate (PET) and applying its own unique technology to blow up film. The new sheet has a life of 30 years, three times more durable than the existing products on the market. It is priced at 20-30% higher than the standard back sheet. According to European Photovoltaic Industry Association (EPA), solar cells with a total generation capacity of 31 million kW were introduced worldwide in 2012, making the cumulative output reach 100 kW. The introduction is expected to increase 55% from 2012 to over 48 million kW in 2017.   

Fujifilm had no way but to decrease the share of film business considerably because of the growing popularity of digital cameras. Actually, film sales account for less than 1% at present as compared with about 20% in 2000. The company is busily occupied with launching new business operations based on the technology it has accumulated. Late last year, it started to ship the EXCLEAR designed for the touch panel of smartphones and tablet PCs. In addition to higher precision, it can be mounted on the next-generation display because it is bendable. Fujifilm is also marketing the label to prevent counterfeiting that allows printed images and literal information to be seen only through the special filter. 

 Fujifilm's technology to extract 
organic EL illumination light 

No. 82: Developing raw materials for biofuel (June 7, 2013)

Technology:

Kobelco Eco-Solutions discovered a new species of euglena that has two times more fat inside than euglena gracilis z stock, which is the currently most promising euglena, and successfully cultured it in collaboration with the University of Tsukuba. The company confirmed that the new euglena proliferates fast if it is cultured by effluent containing organic substances and purifies water. It is supposed to have the same degree of combustibility as coal. The company wishes to put a system from the culture of the new euglena to the refinement of biofuel toward 2018.

Kawasaki Heavy Industries established a technology to produce bioethanol from rice straws at a low cost. The new technology processes rice straws only by hot water. Because it does not use sulfuric acid, it can reduce capital investment. The new technology makes it possible to produce bioethanol at 40 yen per liter. The company has been conducting the substantiative experiment for the past five years.    

   Producing bioethanol from rice

No. 81: Japan’s largest biomass generation plant scheduled for 2016 (May 25, 2013)

Business trend:

Sumitomo Forestry decided to participate in the biomass generation business and construct a biomass generation plant toward 2016 with an investment about 14 billion yen. The plant has a generation capacity of 50,000 kW, exceeding the currently largest plant that has a capacity of 33,000 kW. All generated electricity will be sold to Hokkaido Electric Power. The company reckons that about 200,000 tons of wood and thinned wood will be available annually for generation in the company-owned forest where the plant is to be constructed. The company expects sales of several billon yen per year. It has company-owned forests across the country with a combined area of 42,000 ha, and the area it owns is the fourth largest in Japan, following Oji Paper whose forests total more than 100,000 ha, Nippon Paper, and Mitsui and Co.

Fuel cost accounts for 60% in biomass generation. Procuring fuel at a low price is a critical factor for the success of biomass generation. Sumitomo Forestry plans to import sucked orange of palm oil from Indonesia and Malaysia when the plant is in short of fuel. At the same time, it plans to use coal for 25% of all fuel. Even if coal is used for 25%, the carbon dioxide emissions can be reduced by 75%, the company reckons. In Japan, photovoltaic generation has a capacity of about 6,700,000 kW, wind generation 2,500,000 kW, and biomass generation 2,100,000 kW. However, photovoltaic generation is increasing its share lately because its sells for 4 yen higher per hour than biomass generation. Actually, photovoltaic generation has a capacity of 1,330,000 kW out of 1,400,000 kW that started operation between April 2012 and January 2013. It has become necessary to develop the diversification of renewable energy because photovoltaic generation greatly depends on weather.

A biomass generation plant

No. 80: Power generation that utilizes wind and tidal current together (May 20, 2013)

Technology:

MODEC will start the substantiative experiment of a floating generator that generates electricity with the help of wind and tidal current together this fall. The floating generator is moored at the seabed with the chain. The floating structure is about 30 m in diameter. It has a windmill with the vertical rotation axis on the sea surface and a rotating waterwheel that rotates receiving tidal current under the sea surface. The windmill is 47 m high, while the waterwheel is 16 m downward from the sea surface. The generator has a generation capacity of 500 kW. The power generation technology that utilizes wind and tidal current was developed for the first time in the world.

The company is scheduled to finish installation toward the end of this August and start power generation this fall. In 2014, it plans to sell electricity to the local electric power company. It wishes to lease the generator to local fishers. Although an agreement with fishers on the installation, it strenuously looks for ways of coexistence with them. The project is funded by New Energy and Industrial Technology Organization (NEDO). Please click here for further details of this power generation system.

A floating power generation system

 

No. 79: Realities of the wind generation business in Japan (April 30, 2013)

Business trend:

A large wind turbine about 100 m high floating on the sea 20 km offshore of Fukushima Prefecture will start generating electricity on September 9 this year. This is a national project participated by such shipbuilding companies as Mitsubishi Heavy and Mitsui Engineering and Shipbuilding. The technology they accumulated contributed to setting a structure weighing several hundred tons afloat on the sea. Offshore wind turbines running in Europe are fixed on the seabed, whereas Japanese offshore wind turbines are floating structures. Japan wishes to take the lead in the floating offshore wind generation. It seems that offshore wind generation helps Japan establish a distinguished position in wind generation.

The story, however, is quite different in the land wind generation business that companies plan to start independently. It takes long to clear the environmental assessment. J-Power plans to construct a wind generation plant with a generation capacity of 19,500 kW in Aomori Prefecture scheduled to put into operation in March 2015, but it takes longer than anticipated to clear the environmental assessment. Although Japan Wind Power Association asked for a shorter procedure to clear the environmental assessment, it currently takes three to four years to obtain approval from the government. As a matter of fact, total capacity of the wind generation plants approved by January 31 this year is 570,000 kW, less than one tenth of the total output of photovoltaic generation. As of January 31 this year, only 37,000 kW is generated by wind generation, as against 1,329,000 kW by photovoltaic generation.

Wind generation offers 8% internal rate of return that is 2% higher than photovoltaic generation. In addition, the former has higher generation efficiency than the latter, and it is easier to build a larger wind generation plant to build a large photovoltaic generation plant. Nonetheless, environmental assessment is a big issue to clear. The Fukushima offshore wind generation project mentioned above will start operation in only 18 months after the project was approved. This is because it is an offshore plant and because the government took the strong initiative. The land wind generation plant with a capacity less than 7,500 kW is not subject to environmental assessment. This may be one of the solutions for land wind generation.   

   

Floating axis wind turbine

 

No. 78: Realities of the mega solar business in Japan (April 29, 2013)

Business trend:

The system to purchase renewable energy like sunlight and wind was put into effect 10 months ago, and renewable energy seemed to have a bright future. However, various problems have come to the fore. Some operators of mega solar builders plan to start construction later, while securing a quota from the government before the closing date. They apparently anticipate a price decrease of materials necessary for the construction. Government officials of the related ministries are glum about the strategy of the builders. The purchase price of photovoltaic generation reduced 10% beginning in April this year. The builders who got a quota before April can sell electricity for 42 yen per kW for 20 years. The current purchase price in Japan is more than two times higher in Germany. It is quite natural that many companies rush to participate in the mega solar business.

The number of mega solar plants planned as of the end of January 2013 was 1,024, and the total generation capacity is 5,750,000 kW that is equivalent to that of six nuclear power generation plants. Total investment is estimated at 1,500 billion yen excluding land price. However, another risk was brought to the surface. One of Japan’s electric power companies declared that they could purchase only one quarter of the electricity that the mega solar operator plans to sell because of the shortage of transmission capacity. In addition, places available for mega solar construction will face shortage soon or later. Because the purchase of renewable energy will be transferred to the electricity bill consumers receive every month, there is a fear that the burden consumers have to bear will increase dramatically.

The Japanese mega solar market remains very promising despite the above facts, CEO of Gestamp Solar of Spain said. His company invests 90 billion yen in Japan. And Chinese investors are keeping close watch on the Japanese mega solar business as an investment with low risk and high return. It seems vital to work out measures to prevent bubble burst in the mega solar business.  

Japan’s largest mega solar

No. 77: Growing popularity of biomass generation among paper companies (April 8, 2013)

Business trend:

Nippon Paper will launch biomass generation totally dependent on unused woods like thinnings. The company will build equipment inside its plant and start selling electricity to Kyushu Electric Power in March 2015. The equipment to be built is a fluidized bed boiler with a capacity of 5,000 kW. The annual output will be about 40 million kW, and investment will be 3.0 billion yen. The company expected to get annual sales of 1.3 billion yen from the mass generation.

The fuel for the biomass generation is totally wood chips made purely of unused woods, and Nippon Paper’s plant will consume about 71,000 tons of unused woods per year. The company tries to increase the generation efficiency by circulating both wood chips and air together inside the boiler. A total of 20 million cubic meters of unused woods are produced annually, whereas 10 million cubic meters of recycled woods are produced annually in Japan. Despite this fact, the application of unused woods is not widespread because it takes much to recover unused woods. Promoting the applications of unused woods is important because leaving unused woods in forests is said to deteriorate ecosystem.

The Japanese government promotes biomass generation dependent on unused woods. The purchase price of electricity generated by unused woods is set at 33.6 yen per kW, 2.5 times higher than the purchase price in the case of recycled woods. Demand for such paper products as print sheets and cardboards has been decreasing, and it is estimated to decrease 1.5% from the previous year to 27,350,000 tons in 2013. To prepare for the decreased demand, paper companies are strenuously increasing the generation capacity. In fact, the paper industry has the second biggest generation capacity of 1,700,000 kW, following the power generation industry. 

 Woody biomass generation equipment

Activities on renewable energy of major paper companies

Company	Activities
Oji Holding	The company sells electricity at its plants around the country, and it currently has a total capacity of 150,000 kW. It has already introduced a biomass boiler that uses unused woods.
Nippon Paper	The company has already introduced biomass generation at its 12 plants nationwide.
Rengo	The company has already introduced a gas cogeneration system in its plant. It has also introduced photovoltaic generation equipment in four plants inside Japan.

The efforts to apply unused woods for 

biomass generation are in progress.

 

No. 76: A Japanese electric power company goes to Indonesia for geothermal generation (April 5, 2013)

Business trend:

Kyushu Electric Power will start the geothermal generation business in Indonesia in alliance with Itochu. A special purpose company (SPC) will be founded, and each of the two companies invests 25% in the SPC. Total cost of the project is estimated at 100 billion yen, 70-80% of which will be financed by Japan Bank for International Cooperation. Revenue from power selling will be used for reimbursement. The construction will start in April 2014. The generation capacity will be 330,000 kW, and the planned geothermal power station will be the largest one in Indonesia. Three generators will start operation on after another toward the end of 2016, and all generated amount will be sold to the Indonesian state-run electric power company PLN. Indonesia has about 150 active volcanoes and the second-largest resources for geothermal generation following the U.S. The Indonesian government has laid down a plan to increase the capacity of geothermal generation seven times over the level in 2012 to 9,500,000 kW in 2025.

Kyushu Electric Power is currently operating a geothermal generation plant with a capacity of 110,000 kW in Oita Prefecture. It has an integrated technology in geothermal generation, and one of its subsidiaries is excellent in technology to explore the resources and extract steams effectively and efficiently. Demand for electric power development has been growing bigger in Asia and Africa, and Kyushu Electric Power plans to develop foreign market with its accumulated technology and know-how. Three Japanese companies, Mitsubishi Heavy, Toshiba, and Fuji Electric, has 70% in the world geothermal generation power plant market. It is likely that they can get orders for equipment in the Indonesian project. It has become an important issue for electric power companies how to develop the market in developing countries that have growing power demand.   

 

The project site 

 The geothermal generation plant 

operated by Kyushu Electric Power

No. 75: Shakeout of solar battery material producers is in progress (March 1, 2013)

Business trend:

Japanese material producers are in the process of shrinking the solar battery business greatly due to the rapidly decreasing prices of Chinese products. Three Japanese companies including JX Nippon Mining & Metals decided to dissolve their joint venture in the silicon business and allocate extraordinary loss of about 13 billion yen. Chinese silicon producers participated in the Japanese domestic market in 2010 with low-priced products. The market price of silicon is 15 dollars per ton, less than one tenth of the price in 2008. The joint venture decided to withdraw from the business because it cannot work out solutions to recover the profitability. Tokuyama will also record net loss of 41 billion yen due to its stagnant silicon business in fiscal ending March 2013.

European Photovoltaic Industry Association reported that worldwide generation capacity of photovoltaic generation increased 40% over the previous year to exceed 1,000,000 kW at the end of 2012. The increased generation capacity is about 30 million kW that is equivalent to the generation capacity of 30 nuclear power plants. Worldwide production capacity of silicon is expected to become 450,000 tons due to the participation of Chinese producers, while demand for silicon remains at about 200,000 tons. As if often the case, lots of companies rush into profitable products to decrease the profitability drastically, and small- and medium-sized producers are wiped out from the market. Do not pursue economy of scale to compete with inexpensive products. Strenuous efforts to streamline production to reduce production cost are not rewarded. The only solution to recover profitability in the market dominated by inexpensive products is to increase the competitive edge and launch products that can be sold at higher prices.

 Worldwide capacity of photovoltaic generation is increasing quite rapidly

No. 74: Solar battery shipments grow 1.9 times in 2012 (February 26, 2013)

Business trend:

Japan Photovoltaic Energy Association announced that domestic shipments of solar batteries grew 90% over the previous year to about 2,470,000 kW (generation capacity base) in 2012. Since the system that requires electric power companies to purchase power generated by renewable energy at a fixed price was enacted in July 2012, an increasing number of companies participated in the easily installable photovoltaic business. As a result, solar battery shipments for the nonresidential market grew 4.3 times to about 830,000 kW in 2012. Low-priced imported solar panels have been increasing the presence in the mega solar market. They grew three times to about 780,000 kW, accounting for 31.4% of total solar panel shipments for the mega solar market.

Power that is generated but cannot be consumed by residence is subject to purchase in the residence market. Shipments of solar batteries for the residence market increased 48% over the previous year to about 1,640,000 kW. For the period between October and December 2012, domestic shipments of solar batteries increased 2.5 times to over 1,000,000 KW. They increased 60% over the period between July and September 2012, showing that demand for solar battery increased at an accelerated pace after the introduction of the purchase system. Whereas solar batteries for residence grew 44% over the same period of the previous year, those for nonresidential purposes grew as much as seven times. 

Shipments of solar batteries are increasing remarkably

No. 73: Photovoltaic generation on the rooftop of an apartment building (February 10, 2013)

Business trend:

Leopalace21, one of Japan’s leading rental housing companies, will start the photovoltaic generation business using the rooftops of its 7,000 apartment buildings with an investment of about 30 billion yen. The company plans to recover the investment with the income from power sales in 20 years. Total generation capacity is 100,000 kW. The company will establish a special-purpose company. With the approval from the apartment owners, the company starts to install solar panels on the rooftops beginning in April. The installation is scheduled to end by March 2014.

Each apartment owner gets 3% of the expected revenue from power sales calculated in advance on the basis of the area of the rooftop and the amount of sunshine. Leopalace21 plans to establish multiple special-purpose companies, in which it will invest 5% each. The total output 100,000 kW can satisfy power demand of 33,000 households. The Agency for Natural Resources and Energy told that the largest mega solar would be constructed in Hokkaido by Softbank, one of Japan’s leading mobile carriers, that has a capacity of 110,000 kW as of October 2012. The project launched by Leopalce21 is close to the Softbank’s project, though it is a decentralized system. 

Photovoltaic generation using the rooftop of 

an apartment building launched by Leopalace21

 

No. 72: Another step to the spread of fuel-cell vehicles (January 15, 2013)

Business trend:

JX Nippon Oil and Energy that operates 30% of nation’s gas stations started to consider building 40 stations for supplying hydrogen across the country by 2015 when Japanese automakers are scheduled to launch fuel-cell electric vehicles in full swing. In January 2011, a total of 13 companies in the fields of automotive and energy set a target of building 100 hydrogen filling stations throughout Japan by 2015.

At this moment, substantiative experiments are under way in more than 10 hydrogen filling stations. The company is operating three hydrogen filling stations in Tokyo, and will start to operate two stations that supply both gasoline and hydrogen coming February. The fuel-cell vehicle is the front-runner of the next-generation eco-car. A fuel-cell passenger car can travel 700 km per charge, and it takes only three minutes for charging that is about the same time required to fill gasoline to capacity of a gasoline-driven car.    
 

 A hydrogen filling station operated by Honda

 in the Tokyo Metropolitan area

No. 71: Introduction of wind power generation increases for the first time in the past three years (January 9, 2013)

Business trend:

Japan Wind Power Association announced that the capacity of all new wind power plants scheduled to start operation in fiscal 2012 ending April 2013 will increase 8% over the preceding year to 92,000 kW, recording a year-on-year increase for the first time in the past three years. The system to purchase power generated by renewable energy at a fixed price started in July 2012. The estimated introduction of photovoltaic generation was 2,000,000 kW in 2012. That is, the introduction of wind power generation was less than one twentieth of the introduction of photovoltaic generation. This is because it takes longer to put a wind power plant into operation than a photovoltaic power plant.

Although the introduction of wind power generation recorded an increase for the first time in the past three years in 2012, it is one third of the level of introduction in the three years before 2010 when the government subsidized one third of initial investment for the introduction of a wind power plant. The total generation capacity of wind power generation as the end of 2012 was 2,610,000 kW. It is still a long way to go for the substantial spread of wind power generation.   

Wind power generation does not spread as fast as expected. 

In 2012, only 49 wind power plants started operation. 

 

No. 70: Japanese general trading companies participate in the renewable energy business worldwide (January 7, 2013)

Business trend:

Mitsubishi Corp. will invest 50% of the photovoltaic power plant run by the EDF group of France. Starting with this investment, the company plans joint management of the group’s photovoltaic power plants and offshore wind power plants. It wishes to strengthen the alliance with the EDF group and get know-how necessary to expand renewable energy business worldwide. At the same time, it plans to ask the EDF group for cooperation for its renewable energy projects.

Mitsui has decided to participate in the renewable energy business project by the Canadian subsidiary of GDF Suez S.A. of France. Marubeni has already allied with a Danish company in the offshore wind power project, and the two companies are now running an offshore wind power plant in Great Britain. Sumitomo Corp. and Itochu invested in the world’s largest wind generation plant that GE of the U.S. operates in the state of Oregon.   

A photovoltaic generation plant in Spain 

in which Mitsui invested 30%