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%

    

No. 69: A new wave power generation system to be launched in 2016 (November 19, 2012)

Technology:

Mitsubishi Heavy is developing a new wave power generation system that sets a structure on the sea side of a breakwater. The structure is like a box, and air inside the structure is pushed out when a wave comes into the structure to run a turbine of the generator. Because the structure can bring in waves coming from diagonally, the system has two times higher generation efficiency than the existing system. As a result, the company opened up the road to reduce the generation cost to 40 yen per kW. Although the total power output depends on how many units are built on a breakwater, it is possible to get a generation capacity of 1 mega watt to supply electricity to 200-300 households.

Bridgeand Steel Structure Engineering, a subsidiary of Mitsubishi Heavy, will install a demonstration system in 2014 to start the substantiative experiment using a breakwater in the Tohoku district. The construction cost is about 400 million yen per unit. The system is basically designed for isolated islands where energy cost is rather high. The Japanese government reckons that the introduction of renewable energy in 2012 will increase 12% over the previous year to about 2,500,000 kW on an output basis thanks to the system introduced in July this year to purchase electricity generated by renewable energy at favorable fixed prices for 10-20 years. 

Generation cost, feature, and problem of major renewable energy types

   

Type	Ocean	Photovoltaic	Wind	Geothermal
Generation cost per kW/h	Aiming for less than 40 yen	33.4-38.3 yen (Residence)	9.9-17.3 yen (On land)	9.2-11.6 yen
Feature	Possible to generate throughout the year	Easy to install and operate	Possible to generate regardless of time	Possible to generate throughout the year if hot water is available
Problem	Cost and waterproofing technology	Impossible to generate at night	Generates low-frequency sound	Available places are mostly inside a national park

 

The concept of Mitsubishi Heavy’s wave power generation system

 

The image of Mitsubishi Heavy’s wave power generation system