Markets and Policy in Japan: A Status Report

Bob RoseBreakthrough Technologies Institute

2014 Ohio Fuel Cell Symposium June 11,2014

Background: Fukushima

3/11 Fukushima disaster reshaped Japanese attitudes toward energy

Consequences

• 54 nuclear reactors, 30% of generation, all shut• Power consumption 7% below 2008 levels• Increase in fossil fuel combustion > first trade

deficit in decades– 83% of oil from middle east

• Home electricity prices up ~20%• CO2 emissions up 112 MMT

• Destabilized electricity grid• Consumer attitudes shifted toward security

4th Strategic Energy Plan of Japan

Total rewrite of 2011 plan, which relied heavily on nuclear power

Approved but still controversial

Major Goals

• Minimize reliance on nuclear power• Increase import of US shale gas/coal (short term)• Shift to alternative vehicle fuels• Demand management/conservation• Develop a new energy model– Distributed energy to reduce grid dependence– Resiliency– Open access and consumer choice

• Remain committed to CO2 reduction

Quotable

• . . . public distrust of energy-related administrative organizations and business operators have grown due to many troubles . . .

• Japan cannot keep developing without establishing an energy supply-demand structure that realizes a stable energy supply system which imposes a light burden on society.

• We aim to create . . . a multilayered and diversified flexible energy supply-demand structure.

• Hydrogen is expected to play the central role, as well as electricity and heat.

What About Nuclear Restart?

• Nuclear Power still in the mix but much reduced

• 15-18 reactors may restart, e- deficit still 20%

What About Nuclear Restart?

• “Atomic power is important to society but it is a means to produce electricity and it is subordinate to the fundamental cornerstone of personal rights…”

– 3 judge panel in Japan May 21

What About Nuclear Restart?

• “We need to turn around by 180 degrees the current energy-guzzling society dependent on nuclear power. I foolishly once believed the myth that nuclear energy is clean and safe. That myth has completely broken down.“

- former prime minister Junichiro Koizumi- 01/14

Hydrogen Has “The Central Role”•Energy carrier•Residential fuel•Vehicle fuel•Interconnect with renewables/storage

“Active Support” for FCV Commercialization

• Promote cost reduction• Modify codes and standards• Link passenger vehicles to forklifts and buses• Support infrastructure deployment• Showcase in 2020 Olympics• Support H2 combustion research

A Huge Market

Technology Mix

Applications

ENE-FARM

• 2014: 65,000• 2020: 1.4 M• 2030: 5.3 M (10% of households)• Declining subsidy (450,000 to end in 2016)• Economic benefit:

- Companies pursuing markets in Europe

Recent Advances

• 80,000 hour durability • 10 year lifetime • Substantial cost reduction• Units for apartment buildings

Research and Development

• Battery hybrids • Integration with solar and batteries in home

energy system capable of operating off grid• Distributed generation – harvesting excess

generation capacity• Small commercial systems

Vehicles• 50%-70% “new generation vehicles” in new

car fleet by 2030– Natural gas, battery and FCEV

• Toyota and Honda committed to 2015Toyota much more active• H2 price is important

Motivation: Efficiency

Toyota Corp. 2014

Responding to Market Interest

2012: 17 research stations2013: 19 more, $46M2014: 6 so far, $72M2015: 100 stations, 50% subsidy2025: 2500, 5M FCEV

Hydrogen Infrastructure

Final Thoughts• At its best policy is revolutionary AND

responsive to the public• Policy still in flux but hydrogen seems solid• Big players involved: JX, Toshiba, Panasonic,

Toyota• Commitments made generally are

commitments kept• Enlightened support bears fruit at home and

in export markets