Wednesday, December 11, 2013

Demand Response Comes to Japan

On December 10, a JV was announced between EnerNOC, a U.S. listed company, and Marubeni, a major Japanese trading house.  The JV will provide demand response services to commercial and industrial users in Japan.  EnerNOC already has done a pilot program with Kansai Electric in 2012, and will start a new program with TEPCO via the new JV in 2013.

Some English language reports can be found here and here.

At a Massachusetts-Tokyo trade mission event in Tokyo timed to coincide with the announcement, EnerNOC CEO David Brewster indicated that commercial/industrial demand response systems have the potential to shave 10% off of Japan's peak electric energy demand.  He noted that further regulatory reform will be needed to change electricity contracts -- and provide for "dispatchable" power -- in order to reap the full benefits.

This kind of demand response technology -- that can shut down demand for literally gigawatts in seconds or minutes -- is "low hanging fruit" for Japan.   It can avoid the need for a lot of new centralized generation -- nuclear, coal or otherwise -- and can dramatically ease the implementation of renewables into the electricity grid.

Marubeni seems like an obvious partner for EnerNOC -- they have a long history of involvement with overseas power investments, they have energy trading businesses, and they are familiar with the transition to competitive electricity markets.

Monday, December 9, 2013

Sekisui Chemical Battery and Solar Announcements Grab the Eye

There was a press release last week that really caught my attention.  The Nikkei carried a story about a new process for making lithium ion batteries that promised to dramatically reduce cost and increase energy storage capacity.  The story indicated a 3x increase in storage capacity and much lower production costs.  Wow, I thought, if this is actually commercializable then it will accelerate the shift toward PHEV and EVs.  And also storage systems for renewable energy.  And unlike other battery technologies I have been reading about, the story indicated it should be on the market in a little more than a year.

The press release issued by Sekisui Chemical (click link) adds detail, and more important, photos of the new battery -- a flexible, film-type, sprayed on product.  Wow.

Then a few days later, I see on the Sekisui Chemical website yet another remarkable press release: for a cheap, flexible organic dye-sensitized solar cell produced at room temperature with an 8% conversion efficiency, a world record for this type of cell.  This was based upon work done with Japan's National Institute for Advanced Industrial Science and Technology (AIST).  Again, the company hopes to have a product on the market -- for use in building integrated applications (BIPV) such as office windows -- by 2015.

These are the kind of advances -- that could be on the market in the next few years and represent a significant jump from today -- they are a reason to be very optimistic about Japan's (and the global) energy future, and to wonder whether it is really good value to be spending trillions of yen on trying to restart a portion of the existing nuclear power fleet.

Monday, December 2, 2013

LNG and Gas Market Developments

With Japan's nuclear reactor fleet shut, much of the focus on reliable, affordable generation over the decades required to transition away from nuclear will be on LNG.  The press is full of reports of developments in Japan relating to new gas-fired generation, changes in the gas markets, and liberalization efforts.  Japan pays $15-20 per MMBTU for its LNG upon import, whereas gas trades for 20-25% of that price within the U.S.A.  A crucial item for Japanese energy policy is thus to obtain cheaper, diversified sources of LNG supply.  A few reports:

November 8.  Tokyo commodities exchange announces a plan for LNG commodities trading market, to support the move away from oil-linked long term pricing structures -- currently over 80% of Japanese LNG is purchased based upon 10~20 year oil-price-linked agreements.  This is the first step to a futures market in LNG in Japan.

November 13.  TEPCO announces it is considering outsourcing some fuel procurement activities to reduce its LNG acquisition costs.

November 28.  Tokyo, Osaka and Toho Gas companies announce support for full retail price liberalization and competitive schemes.

November 28.  Japanese shipbuilders have a huge increase in orders for LNG tankers -- 90 ships on order now for delivery by 2020.

November 29.  The Tokyo commodities exchange reports negotiations with the CME (Chicago Mercantile Exchange) for a business tie-up in the area of LNG trading.

First Solar announces Japan Market Entry

First Solar has been looking around the Japanese market for some time, and finally (according to company announcements and various press reports over the past few weeks) is going to jump in, both selling modules and developing and selling completed "mega solar" projects.

First Solar acquired Tetrasun earlier this year, a company that has high conversion efficiency traditional crystalline technology -- a good match (at the right price and other factors) for the Japanese rooftop market.  They are teaming with JX Nippon Oil for eventual roll out in Japan.  And they announced their first smaller project with existing First Solar CdTe thin film modules.  The planned total First Solar investment in Japan is $100 million.

UPDATE:  In summer 2014, XSOL announced a supply agreement to import and sell First Solar CdTe modules in Japan.