Takahiro Yamada

Assistant ChiefMETIAgency for Natural Resources and Energy

26th APEC EGNRET

April 4, 2006

Auckland, New Zealand

Private Sector Activities in Domestic New and Renewable Energy Technologies in

Japan

Hiroyuki Kato-Deputy Director

Ken Johnson-Advisor

NEDOInternational Projects Management Division

2

New & Renewable Energy Utilization Targets

0

5

10

15

20

2002 410 2.2%

2010 2030 Target: 425 MKOE

(4.5%)

Biomass power generation ( 0.34)Biomass heat utilization ( 3.1)Black liquor, woody waste (4.7)Waste heat utilizationNon-use energySolar thermal utilizationWaste power generationWind power generationPhotovoltaic generation

New

ene

rgy

sum

tot

al(M

KO

E)

Biomass

Bioenergy9.2

19.1

4.74.8

4.8

1.5 2.1

5.5

PV

20024102.2%

20304254.5%

Year:Total Energy

Consumption:N&RE Share:

(excluding hydroelectric generation)

Wind Power

10.5

(Unit: MKOE: Million Kiloliter Oil Equivalent)

3

Cumulative Installed PV Capacity

IEA/PVPS Task 1,“Trends in Photovoltaic Applications,” Sept. 2005

US365MW(14%)

Photovoltaics:

4

Production Capacity and Overseas Development

Manufacturers

(materials)

Domestic cell production capacity (MW) Overseas module production

2000 2001 2002 2003 2004 2005 After 2006

SHARP Corporation(Single crystal Si, polycrystal Si, thin-film Si solar cells)

54 94 200 248 315↓

400

500 Currently planning U.S.: 20MW (2003)→40MW( 2004)→120MWEngland: 20MW (2003)→50MW (2005)→110MW (2006)

Kyocera Corporation(Polycrystal Si, spherical Si solar cells)

72 72 72 100 150 240 Currently planning China: 15MW (2003)→30MW(2004)Mexico: 12MW (2004)→36MW (2005)Czechoslovakia: 12MW (2005)→60MW (2006)

SANYO Electric Co., Ltd.(a-Si/single crystal Si, thin-film Si solar cells)

23 31 35 68 160 160 250 (2007)1,000(2010)

Mexico: 10MW (2003)→12MW (2005)Hungary: 50MW (2005)→100MW (2006)

Mitsubishi Electric Corporation(Polycrystal Si solar cells)

15 25 35 50 90 135 230 (2006) -

Kaneka Corporation(Thin-film Si solar cells)

20 20 20 20 20 20 70 -Mitsubishi Heavy Industries, Ltd.(Thin-film Si solar cells)

- Pilot 10 10 10 10 50 -

Hitachi, Ltd.(Single crystal Si solar cells)

- - - 6 – 8 6 – 8 10 Currently planning -Showa Shell Sekiyu K.K.(CIS solar cells)

- - - - - - 20 (2007) -Honda Motor Co., Ltd.(CIS solar cells)

- - - 2.8 2.8 2.8 27.5 -Fuji Electric Holdings Co., Ltd.(Thin-film Si solar cells)

- - - - 3 3 15 (2006)30 (2008) -

Source: RTS Corporation, PV Activites in Japan, Vol. 16, No. 1

Photovoltaics: Japanese Solar Cell Manufacturers

5

Photovoltaics:Private Sector Activities/ChallengesSharp Corporation•Strengthen marketing to domestic industrial users, increase industrial sales from 10% 30%•Expect total PV sales of $1.67B in 2006

Kyocera Corporation•Developed low-cost granular-silicon solar cells (Silicon granules <1mm in diameter)

Sanyo Electric Co.•Expand investments to increase PV production capacity•Domestically: 160MW (2005) 250MW (2007)•Internationally: 50MW (2005) 100MW (2006)

Mitsubishi Electric Corporation•Developed system to forecast PV generation by monitoring cloud movement with camera; Benefits: effective use of backup power, less impact on power grids

Tokuyama Corporation•Largest Japanese producer of polysilicon (#2 worldwide)•Researching feasibility of Vapor to Liquid Deposition (VLD) technology to overcome worldwide shortage of polysilicon supply

Showa Shell Sekiyu•Will commence silicon-free, thin-film CIS (Copper, Indium, Selenium) PV cell production in 2007

Source: RTS Corporation, PV Activites in Japan, Vol. 16, No. 1

6

Photovoltaics:Showa Shell Sekiyu: CIS Solar Cell Modules

7

Photovoltaics:Main Elements of CIS Solar Cells

Cu ・・・・ Copper

　　 In ・・・・ Indium　　　 　 Se ・・・・ Selenium

･ ･ ･ ･ ･→Thin-film CIS Solar Cell Module

s　　

8

Photovoltaics:Categories of Solar Cells

Solar cell

Bulk

Thin-film

Silicon

Compound

Silicon

Compound

Single crystal

Polycrystal

Gallium arsenic, etc

Amorphous

CIS solar cell

（ For special use: e.g. space technologies; most efficient）

(Outdated but relatively high efficiency)

(Widely disseminated and most common; More easily manufactured than single crystal）

（ Requires fewer materials but several performance challenges remain)

（ Simple manufacturing process,high performance anticipated）

Manufactured by carving out of thick material

Thin-film created on substrate

Mostutilized

9

Photovoltaics:Advantages of CIS Solar Cells

CIS

Performance:・ Highest energy conversion efficiency among all thin-film solar cells

・ Highest light absorbance of all semiconductors

・ Excellent durability

Performance:・ Highest energy conversion efficiency among all thin-film solar cells

・ Highest light absorbance of all semiconductors

・ Excellent durability

Technology developed by

Showa Shell Sekiyu K.K.・ 13 years of R&D experience (NEDO entrusted research activities)

・ Top performing thin-film solar cells in the world

・ Patented technology

Technology developed by

Showa Shell Sekiyu K.K.・ 13 years of R&D experience (NEDO entrusted research activities)

・ Top performing thin-film solar cells in the world

・ Patented technology

Potential to be the mainstream of the next-generation of solar cells:・ Stable supply of raw material (not dependant on silicon)

・ Highly productive manufacturing process

・ Further development anticipated under NEDO’s “Development of Advanced Solar Cells and Modules” project

Potential to be the mainstream of the next-generation of solar cells:・ Stable supply of raw material (not dependant on silicon)

・ Highly productive manufacturing process

・ Further development anticipated under NEDO’s “Development of Advanced Solar Cells and Modules” project

Low cost potential:・ Simple module structure/manufacturing process

・ Low raw material utilization

・ Integrated manufacturing: from raw materials to end products

Low cost potential:・ Simple module structure/manufacturing process

・ Low raw material utilization

・ Integrated manufacturing: from raw materials to end products

10

Photovoltaics:Solar Cell Structure

Light

Anti-reflective coating

n type silicon

p type silicon

Electrode

Electrode

Crystalline-Si Solar Cell(Conventional type)

Crystalline-Si Solar Cell(Conventional type)

Thickness:

200～ 300μm vs. 2~3μm

Transparent electrode

BufferCIS compound

Electrode+

－－

－

－++

－

+

+－ － － －

+ +

－

+

CIS Solar CellCIS Solar Cell

Light

11

Photovoltaics:Comparison: CIS vs. Crystalline Silicon

Characteristics CISEvaluati

onCrystalline

siliconAdvantages of

CIS

Silicon usage A ＞ D Not dependant on silicon

Appearance A ＞ C Black color stands out less

Manufacturing cost

A ＞ B Possible cost reduction anticipated

Manufacturing process

B ＞ CSimple manufacturing process: integrated manufacturing process possible

Environmental friendliness

A ＞ B Exceeds others in environmental friendliness

Energy Payback Time (EPT)

A ＞ B Less energy consumption during manufacturing

Conversion efficiency

B ＜ A 　

12

Photovoltaics:Appearance of CIS Solar Cells

CISSolar Cells

ConventionalCrystalline Silicon

Solar Cells

13

Wind Power Generation in JapanG

en

era

tin

g

cap

acit

y (

kW

)

Tu

rbin

es

14

Wind Power Players in Japan

Private Sector Farms MW

Euras Energy 9 184

EcoPower 10 70Green Power 2 39WindTech 4 38Rokkasho Mura Wind Pwr 1 33Toyota 2 31Minami Kyushu Wind Pwr 2 26Nigaho Kogen Wind Pwr 1 25J Wind 2 24Horonobe Wind Power 1 21

Esashi Wind Power 1 21Others 156 326Total: 134 players 191 838

Public Sector Farms MW

49 Cities 56 53

10 Prefectures 13 20

NEDO 25 11

JOGMEC 1 1.5

(Japan Oil, Gas & Metals Nat’l. Corp.)

Ministry of Land, Infra. & Trans. 1 .3

Total: 62 players 96 86

15

Wind Power Generation System Introduction (Total number of imported/domestic turbines)

海外機と国産機の導入基数の推移

0

100

200

300

400

500

600

700

800

900

1000

年 度

基 数

Imported 0 0 0 2 5 7 16 23 40 72 136 193 368 499 636 746

Domestic 9 9 14 21 28 37 38 43 49 55 62 66 66 77 106 178

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Fiscal year

Tu

rbin

es

16

Wind Power Generation System Introduction (Total generation capacity of imported/domestic systems)

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

Fiscal year

Cap

acity

(kW

)

Imported

Domestic

Imported 0 0 0 350 650 1,150 3,975 6,133 12,302 25,712 66,887 126,207 292,862 439,262 637,942 810,952

Domestic 1,215 1,015 2,541 3,124 4,323 6,430 6,446 7,579 9,236 12,110 15,750 17,537 19,895 24,948 42,723 115,623

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

17

Wind Power Generation Systems

Total generation capacity of domestic makers' systems in Japan increased sharply in 2004.

Most domestically supplied turbines were produced by Mitsubishi Heavy Industries (MHI) Japan. MHI was #8 in turbines worldwide in 2004.*

Fuji Heavy Industries developing new 2MW system to obtain share in Japanese market.Features:

Downwind rotor for typhoon conditions Blade and Nacelle transportable in pieces

Japanese makers increasingly capable of manufacturing 2MW turbines.

*http://www.earthscan.co.uk/news/printablearticle.asp?sp=636487402740206174292&v=3&UAN=431

18

Biomass Resources and Biomass Energy Utilization

Wood

Food

Agricultural, livestock, fishery Construction waste

Household waste

Pulp & paper

Biomass Resources

Dry

Moist

Others

Woody biomass

Forestry wasteScrap timber

Agricultural waste

Rice strawMaize

Rice husksWheat straw

Construction waste wood

Sewage sludge

Excreta

Garbage

Used cooking oil

Bagasse

Food industry waste water/food

waste

Seafood processing waste

Black liquorScrap wood

Cellulose(recycled paper)

Bagasse

Livestock excrement

Cattle/hogs/poultry

Fisheries waste

Sugar/starch

RapeseedPalm oil

Biomass Energy Utilization

Direct combustion

Biochemical conversion

Thermo-chemical conversion

Power generation/

Transportation

Crushed into chips or pelletized for boiler combustion

Methane/Ethanol/Hydrogen generation via fermentation, etc.

Fuel generation by gasification/esterifica-tion/slurrying through high-temperature and high-pressure process, etc.

19

Biomass Utilization—Chugai Ro Woody Biomass Gasification and Co-generation System (1/2)

Japan’s first co-generation system incorporating a gas engine generator.Effective use of woody biomass resources while reducing CO2 emissions.

20

Biomass Utilization—Chugai Ro Woody Biomass Gasification and Co-generation System (2/2)

Benefits:

•Efficient thermal decomposition and gasification

•Efficient electric power recovery

•Recovery of thermal energy

•Gas reforming tower for tar removal

•Enables effective use of by-products

1100℃

Gasification kiln

Oxygen

External heat type

multi-retort kiln

700～ 850℃

Residue(Char and ash)

Preheated air

Hot-air generator

Airpreheater

Gas engine generator

ElectricPower

176kW(20.1%)

Hot Water 73kW(8.4%)

Steam201kW(23.0%)

Biomass Material

5t/d

Hopper

Gas reformer

Gas filter

Gas holder

Waste heat

boiler

GasCooler

Gasfilter

900℃

21

Bio-ethanol Demonstrative Projects in Japan

[MOE]

3. Sakai-city, Osaka (Taisei Corporation, Marubeni Corporation, Osaka municipal government)

2. Shinjyo-city, Yamagata Pref. [MOAFF]

4. Kuse-cho, Okayama Pref. (Mitsui Engineering & Shipbuilding Co., Ltd.)[METI]

6. Miyako-island, Okinawa Pref. (Ryuseki)

5. Ie island, Okinawa Pref. (Asahi Breweries, Ltd.)

1. Tokachi, Hokkaido (Tokachi Zaidan, etc.)

[METI / MOE]

[METI / MOAFF / MOE / CAO]

Ethanol manufacturing from substandard wheatand maize/E3 (gasohol) demonstration

Ethanol manufacturing from sorgum/E3 (gasohol) demonstration

Ethanol manufacturing from construction waste/E3 (gasohol) demonstration

Demonstrative manufacturing of ethanol from mill ends

Ethanol manufacturing from sugarcane/E3 (gasohol) demonstration

Ethanol manufacturing from sugarcane/E3 (gasohol) demonstration

[METI / MOAFF / MOE / CAO]

22

Biomass Utilization—Mitsui Engineering and Shipbuilding

Bioethanol Demonstration Plant• Cellulosic ethanol demonstration plant using wo

od-based feedstock (June 2005)

• Feedstocks derived from wood chips and waste

wood collected from forestry industry

• Sugar mixed with yeast for fermentation

• MES’ Zeolite membrane used to obtain absolute

ethanol

• Production capacity: 250kg of absolute ethanol/day

• Capable of processing 2 tons of wood waste/da

y

23

BIOMASS:Oil Industry Efforts for Bioethanol Introduction

Japanese Government announced (January 18, 2006) implementation of “Utilization

of Biomass Fuels for Transportation,” as part of its “Kyoto Protocol Target Achievement

Plan,” under the following policies/conditions:

1) Members of the Petroleum Association of Japan shall be actively engaged in blending bioethanol fuel for transportation. Target blend 20% of gasoline (bioethanol ETBE) by 2010. (Approximately 360,000KL/year = approximately 210,000KL/year crude oil equivalent)

2) Bioethanol introduction shall not: a) negatively impact air quality, or b) compromise safety or automobile performance.

3) Risk assessments necessary for mixing ETBE with gasoline must be conducted prior to bioethanol introduction, since ETBE is designated as one of the “TYPE Monitoring ⅡChemical Substances” of “the Chemical Substances Control Law.”

24

BIOMASS: ETBE Introduction Scale (1/3)- For a stable and long-term supply

1) Ethanol, a raw material for ETBE, is limited in supply

Brazil is the only major ethanol exporter

↓ Other countries such as U.S. and China can only meet domestic consumption Scant ethanol production in Japan

　 Ethanol Producing Countries (2004/2005)

Production capacity

Brazil 15,000,000 kl

U.S. 14,000,000 kl

China 3,000,000 kl

Europe 2,000,000 kl

Others 7,000,000 kl

World production capacity 41,000,000 kl

25

ETBE Introduction Scale (2/3) - For a stable and long-term supply

2) ETBE is limited in supply

a) Japan’s maximum domestic production capacity if 4 existing, idled MTBE* plants were converted to ETBE production: 400,000 kl/year MTBE was produced until 2001 Maximum domestic isobutene production: approx. 630,000 tons/year

b) Potential overseas supplies of ETBE: Europe: domestic production and consumption of ETBE, but no overcapacity U.S.: MTBE plants exist that could possibly be converted to ETBE production?

*MTBE: methyl tertiary-butyl ether, a fuel synthesized from methanol (from natural gas) and isobutene

Enables maximum annual production of ETBE of 1,500,000kl

26

ETBE Introduction Scale (3/3)- Issue: Economic efficiency relative to conventional fuels

Ethanol vs. gasoline

Ethanol* is 20 to 30 yen/l more expensive than gasoline** when calculated by calorific value equivalence (based on recent import price)

(*Ethanol price: import price (excluding custom duty) of ethanol for industrial and beverage use calculated on an equivalent calorific comparison versus gasoline (60%))

(**Gasoline price: domestic market price excluding taxes (gasoline tax, oil/coal tax and crude oil tax)

Issues: agricultural produce unstable; transportation costs

27

Thank you for your attention!