(c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014
Gerhard Fasol PhD	

Economist Corporate Network	

Tokyo...
(c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014
JAPAN’S ENERGY - MYTHSVS REALITY
•Nature governs energy...
(c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014
NATURE GOVERNS ENERGY
•“For a successful technology, re...
(c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014
WHERE ARE WE AND WHY?
Year action
February 15, 1883 Tok...
(c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014
CAUSE OF FUKUSHIMA NUCLEAR
ACCIDENT
•Parliamentary Comm...
(c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014
DANIEL KAHNEMAN
2002 Nobel Prize in Economic Science	

...
(c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014
PRIMARY ENERGY SELF-SUFFICIENCY RATIOS	

TRADITIONALVIE...
(c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014
GENERATED ELECTRIC POWER
Jan 2007 Jan 2008 Jan 2009 Jan...
(c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014
WHY DOES JAPAN PAY SO MUCH FOR LNG?
2008 2010 2012 2014...
(c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014
THE CONTRIBUTION OF RENEWABLE ENERGYTO JAPAN’S ELECTRIC...
(c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014
INSTALLED WIND POWER GENERATION CAPACITY
China US Germa...
(c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014
THE WAY FORWARD
•global grid trends	

•democratization	...
(c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014
GLOBALTREND:	

REDESIGN ELECTRICITY GRIDS
特別高圧
(1) 500k...
(c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014
TAKE AWAYS:
•Nature governs energy	

•Nature cannot be ...
(c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014
CONTACT AND MORE INFORMATION
Gerhard Fasol	

CEO, Eurot...
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Japan's Energy - myths versus reality (keynote at The Economist Corporate Network briefing)

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Overview of Japan's energy situation past and future. Keynote given at The Economist Corporate Network in Tokyo on April 24, 2014

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Japan's Energy - myths versus reality (keynote at The Economist Corporate Network briefing)

  1. 1. (c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014 Gerhard Fasol PhD Economist Corporate Network Tokyo April 24, 2014 JAPAN’S ENERGY - MYTHSVERSUS REALITY
  2. 2. (c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014 JAPAN’S ENERGY - MYTHSVS REALITY •Nature governs energy - nature cannot be fooled ! •Where are we and why? ! •Where do we go forward?
  3. 3. (c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014 NATURE GOVERNS ENERGY •“For a successful technology, reality must take precedence over public relations, for nature cannot be fooled” (Richard Feynman in the Rogers Space Shuttle Challenger report) •I am physicist and “energy” in my DNA… •see: http://www.boltzmann.com/events/symposia/
  4. 4. (c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014 WHERE ARE WE AND WHY? Year action February 15, 1883 Tokyo Dentou KK receives Government license, starts business in July 5,1886 1893 Tokyo Dentou KK introduces 50Hz equipment from AEG (of Germany) Osaka Dentou KK introduces 60Hz equipment from GE (of USA) 1896 33 electricity utility companies 700 electricity utility companies 1938-1939 Japan’s electricity industry nationalized March 1942 Nihon Hassouden KK (Nippatsu) created (generation + transmission) 9 distribution companies (Tokyo Dentou dissolved March 1942) May 1, 1951 US occupation government orders dissolution of Nihon Hassouden KK (Nippatsu), 9 regional electricity monopolies created,1972 + Okinawa Power Co March 1, 1961 construction of first Japanese nuclear power plant (Tokai Nuclear Power Plant, UK Magnox type) starts (power generation starts 1966, decommissioned in 1998) source: http://www.eurotechnology.com/store/j_energy/
  5. 5. (c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014 CAUSE OF FUKUSHIMA NUCLEAR ACCIDENT •Parliamentary Commission chaired by Kiyoshi Kurokawa: Regulatory capture •Kurokawa: “Group think can kill”, see: •http://www.eurotechnology.com/2014/03/09/kiyoshi- kurokawa-groupthink-can-kill/ •not a Japanese phenomenon •theory of regulatory capture: •George Stigler (Nobel Prize 1982) “EconomicTheory of Regulation”
  6. 6. (c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014 DANIEL KAHNEMAN 2002 Nobel Prize in Economic Science ! Psychology of judgment and decision making ! “why clever people make stupid decisions”... ! Eminent US philosopher about Daniel Kahneman: “I am not interested in the psychology of stupidity”
  7. 7. (c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014 PRIMARY ENERGY SELF-SUFFICIENCY RATIOS TRADITIONALVIEW - NEGLECTS RENEWABLE POTENTIAL Italy Japan S Korea Germany France US India UK China Canada Russia 0 20 40 60 80 100 120 140 160 180 200 Energyselfsufficiencyratio Energy self sufficiency ratio IEA, OECD, 2006 2007 15 15 18 4 19 2 41 30 51 8 71 62 76 75 83 76 92 91 153 144 183 incl. nuclear 177 excl. nuclear c2012EurotechnologyJapanKK www.eurotechnology.com Japan’s energy “self sufficiency” is 4% with nuclear power switched off, and 18% with nuclear power switched on. However, this reasoning does not include the potential of not yet developed renewable energy sources, which are 100% domestic, e.g. wind energy, geo-thermal. If wind energy, solar, geo-thermal, micro-water power and other renewable sources are fully developed, Japan could come close to or even exceed self-sufficiency in energy in the future. Source: http://www.eurotechnology.com/store/j_energy/
  8. 8. (c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014 GENERATED ELECTRIC POWER Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 0 10 20 30 40 50 60 70 80 90 100 110 120 electricitygenerated permonthTeraWatthmonth Japan's electricity generation per month TeraWatt h Source: METI caloric nuclear red water power blue solar, wind, geothermal, biomass March 11 disaster c2013EurotechnologyJapanKK www.eurotechnology.com source - includes about 200 pages of data and analysis of Japan’s energy sector: http://www.eurotechnology.com/store/j_energy/
  9. 9. (c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014 WHY DOES JAPAN PAY SO MUCH FOR LNG? 2008 2010 2012 2014 0 5 10 15 20 25 NaturalGaspricesUS$MillionBTU 3.4 cent kWh 6.8 cent kWh March 11, 2011 Japan LNG USA LNG Export USA pipeline Import EU Natural Gas prices US$ Million BTU c2012EurotechnologyJapanKK www.eurotechnology.com Japan pays about 5% of GDP for importing primary energy (detailed statistics: http:// www.eurotechnology.com/store/j_energy/). Japan pays far more for LNG per unit than US costs or EU - why? • not one single reason: • liquefaction + transport • political reasons • timing • negotiation know-how • competition reasons • project management • etc
  10. 10. (c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014 THE CONTRIBUTION OF RENEWABLE ENERGYTO JAPAN’S ELECTRICITY GENERATION HAS FALLEN FROM 25%TO AROUND 10% FROM 1970 UNTILTODAY 1970 1980 1990 2000 2010 0 10 20 30 percent Japan's generated renewable electric power as a ratio of total generated power Water Pump Storage Renewable except water power c2013EurotechnologyJapanKK www.eurotechnology.com source and more details: http://www.eurotechnology.com/store/j_renewable/
  11. 11. (c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014 INSTALLED WIND POWER GENERATION CAPACITY China US Germany Spain India UK Italy France Canada Portugal Japan ROW 0 10 20 30 40 50 60 70 80 90 100 windpowerGigaWatt wind power end 2012 75.6 60 31.3 22.8 18.4 8.4 8.1 7.2 6.2 4.5 2.6 39.9 c2013EurotechnologyJapanKK www.eurotechnology.com
  12. 12. (c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014 THE WAY FORWARD •global grid trends •democratization •liberalization •localization •renewable energy •the new Government Energy Strategy
  13. 13. (c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014 GLOBALTREND: REDESIGN ELECTRICITY GRIDS 特別高圧 (1) 500kV, 270kV, 140kV (2) 60kV (3) 20kV 高圧 6kV 低圧 200V, 100V Power stations: (1) generate power (2) stabilize grid frequency 特別高圧 (1) 500kV, 270kV, 140kV (2) 60kV (3) 20kV 高圧 6kV 低圧 200V, 100V Power stations: (1) generate power (2) stabilize grid frequency Traditional top-down energy grid.TEPCO’s supply grid forTokyo and the region around Tokyo has been built over many years according to this top-down principle. Electricity flows one-way from large central power stations to customers. In most countries traditional top-down grids are evolving to a new paradigm.As small local power plants, renewable energy sources such as wind and solar, geo-thermal or micro-water plants, are added on the distribution end of the grid, electricity flows both ways: top-> down, and bottom -> up. New technology need to be introduced to stabilize and synchronize supply/demand, and stabilize the frequency in such a modern grid.
  14. 14. (c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014 TAKE AWAYS: •Nature governs energy •Nature cannot be fooled (Feynman) •Global trend: reengineering the grid •localize, democratize, liberalize •Renewable energy: wind can in theory cover all of Japan’s energy needs •Energy strategy plan has no KPI’s
  15. 15. (c) www.eurotechnology.com fasol@eurotechnology.com April 24, 2014 CONTACT AND MORE INFORMATION Gerhard Fasol CEO, Eurotechnology Japan KK Board Member, GMO Cloud KK ! http://www.eurotechnology.com/ fasol@eurotechnology.com ! More information: http://www.eurotechnology.com/japan-energy/ ! Detailed statistical data and analysis: http://www.eurotechnology.com/store/j_energy/ http://www.eurotechnology.com/store/j_renewable/

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