Japan | Green World Investor

Japan Solar Energy – Future Growth driven by METI and 7 Zaibatsus (Sharp,Panasonic,Mitsubishi,Honda,Mitsui,Toshiba,Kyocera)

8 Mar, 2011

Japan,Sharp,Solar Energy,Solar EPC,Solar Frontier,Solar Panels

Solar Energy in Japan has a long future dating back to 1994 when the government introduced capital subsidies to boost solar energy installations on rooftops.Till 2004,Japan was the largest solar market in the world after which it was overtaken by Germany.After 2004,the growth in the solar industry tapered off as the government reduced the subsidies for solar panels to almost zero.The huge domestic market gave rise to Japanese companies like Sharp,Mitsubishi,Kyocera,Panasonic-Sanyo become top solar panel producers in the world.However the low cost Chinese solar module producers have pushed back most of the Japanese companies.Since the last year,the Japanese government has again started giving generous solar subsidies and feed in tariff to boost the renewable energy production in the country which remains far off targets.This has led Japan to become the top non-European market after USA and the growth seems set to continue in the future as well.Japan has relatively low installations costs and is much nearer to grid parity.Also lack of wind energy makes solar energy more attractive as a renewable energy choice.While large scale solar installations in Japan are almsot absent,there remain large numbers of rooftop solar installations.

Top Japanese Solar Companies

1) Sharp - Sharp,the Japanese Zaibatsu known more for its Electronics Products is also the world’s No 1 Company in terms Solar Module Revenues.Sharp has been the solar world leader since the past 4-5 years despite stiff competition recently from upcoming Chinese Crystalline Solar (c-Si) players and Thin Film Leader First Solar

Sharp’s c-Si division is not cost competitive with the Chinese and Taiwanese companies as its cost structure is almost 30-40% higher than the cheapest Chinese producers.Though the quality of Sharp’s crystalline silicon modules is considered much better,the cost difference has become too big in a rapidly commoditizing industry

While companies like Masdar are abandoning their Thin Film plans,Sharp has started shipping a-Si modules from its 1 GW capacity plant in Sakai.With its established distribution strengths and technological abilities in LCD Technology,Sharp is one company that can survive the c-Si onslaught.

2) Sanyo-Panasonic – Sanyo plans to invest more than 70% of its total investment over the next 3 years in its renewable energy and energy storage segments.Sanyo has never been as successful in the hyper competitive electronics market as other Japanese companies like Sony or Sharp.However its lithium batteries and solar panels possess cutting edge technology.Its solar panels with proprietary HIT technology rival the best in terms of efficiency and quality.

Panasonic after acquiring Sanyo has completely changed its strategy to become a major Green Player targeting a Major Percentage of Sales in the future to come from Green Products.Panasonic which is the world’s biggest Plasma TV producer is going to spend $1 Billion on Green Building investments.Panasonic will combine its Green Strengths with Sanyo’s to sell a complete Eco-Friendly Home complete with Solar Power,LED Lighting and Energy Storage and Efficiency capabilities.In Solar where Panasonic is the No. 3 player in Japan behind Sharp and Kyocera ,it is speeding up the expansion of solar capacity.It will spend more than $500 million aiming to triple its energy solutions business in Europe to 800 Million Euros by 2016.

3) Kyocera – Kyocera is Japan’s second largest solar panel producing company.The company recently won a major contract to build a solar farm in Thailand.Unlike other companies it has been slow off the blocks and unless it perks up its game,it is likey to become a even smaller company in the global scheme of things.

4) Mitsubishi – Mistubishi is another old time Japanese solar company which has a low profile solar module and system business.The company is known for its high quality panels and has a decent presence in USA and Japan.However like Kyocera it has not been aggressive enough leading to loss in marketshare.

5) Mitsui - Mitsui Engineering and Shipping,one of Japan’s huge zaibatsus is planning a foray into the solar energy market as well.The Company is being supported in its initiative by METI which will collaborate with the Tunisian government in setting up a combined gas solar hybrid plant.A 5 MW Solar CSP plant will be set up by 2013 to demonstrate the technology.The company also owns a solar system business in the US after acquiring Sunwize

6) Toshiba – Toshiba the Japanese Giant known for its Global Leadership in Nuclear Power Equipment,Electronics and Memory Businesses has decided to become a big player in the Solar EPC business.This strategy is quite different from the other global conglomerates entering the Solar Energy Field.South Korean Players like Samsung,LG,Hanwha and Hyundai are all building Crystalline Silicon Modules.Toshiba wants to enter the Smart Grid business by leveraging its experiece of the Solar EPC business.It is already in the process of building a 10 MW plant in Bulgaria and plans to generate around $2 Billion Dollars annually from US and Europe by 2015

7) Honda – Honda,the Japanese auto giant has also joined the Solar Energy Race by selling Thin Film Modules based on CIGs technology.Japan’s conglomerates like Sharp,Kyocera,Mitsubishi and Panasonic already have big solar manufacturing operations with Sharp being the largest Solar Company in the World.Honda which has a small presence in the Solar Energy through its subsidiary Honda Soltec is expanding its lines of modules for the domestic market.

8 ) Solar Frontier - Solar Frontier is a subsidiary of Showa Shell Sekiyu and is listed on the Japanese Stock Exchange.The Company has big plans for the Solar Energy Market planning to increase its capacity by more than 10 times in 2011 to around 1 Gw in total.All its 3 plants are located in Miyazaki in Japan and uses previous plasma plant of Hitachi.Solar Frontier claims 11.5% efficiency for its CIS modules which are expected to go upto 14% by 2014It has signed a distribution deal with GE to sells its Copper Indium Selenide (CIS) Panels in USA

Summary

Japan has a large electricity market and it needs to really ramp up renewable energy in order to meet Kyoto Protocol targets.With solar costs declining at a rapid pace and a strong domestic industry,Solar Energy in Japan is set for good growth in the future.The government and METI also seem to have again shifted their focus towards solar energy after 5 yeaers of hibernation.Investing in Green Industry has become the main strategy for most of the Japanese Zaibatsus and Solar Energy is arguably the most important Green Sector.

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Sumitomo Green Strategy is quite Unconventional with Battery Recycling,Carbon Trading and Geothermal Energy ventures

15 Sep, 2010

Japan,Renewable Energy

Giant Japanese Kieretsu Sumitomo Corporation is rapidly accelerating its investments into the Green Industry.Japanese Giants like Sharp,Nissan,Toyota,Mistsubishi,Itochu etc have already made major inroads into different Green Sectors.Sumitomo is now trying to catch up with its Japanese peers.However unlike Toshiba,it is focusing its efforts into Wind and Geothermal Energy and not into Solar Energy.Also in the Clean Transportation Sector,it is looking to recycle batteries.Sumitomo with its massive capabilities and reach is capable of becoming a big player in these areas.It is mostly looking towards international expansion and is partnering with Japanese and Chinese companies in different fields.

Renewable Energy

Sumitomo entered the Wind Energy Business in the US by buying a 42.5% stake in Stanton 120 MW Wind Farm in Texas.The Company already has Wind Assets in Japan and is partnering with Giant Chinese Utility Datang for building Renewable Energy Assets in China.Sumitomo has already built a 50 MW Wind Farm in Inner Mongolia with Datang and Kyushu Electric.Sumitomo is already strong in constructing geothermal plants having built a 140 MW Nga Awa Purua Geothermal Plant in New Zealand in 2 years flat.It also has contracts to build upto 530 MW of Geothermal Plants in Indonesia.In Phillipines the Company has partnered with another Japanese Trading Powerhouse Marubeni to finance Biomass and Waste to Energy Plants.However Solar Energy is strangely missing from Sumitomo’s strategy.It activity till now has been restricted to some small PV plants in Spain and trading of Solar Panels made by Sharp and others.Note other Global Conglomerates like ABB,GE,Siemens,LG,Samsung are in the process of making massive investments into the Green Industry.

Sumitomo Corp working with China Datang on green energy – Reuters

Sumitomo Corp said on Thursday it has agreed to develop clean-energy projects with a unit of China Datang Corp, the country’s second-largest power producer.Sumitomo, Japan‘s No.3 trading firm, is looking to expand its renewable energy business, which includes wind, solar and biomass, in China’s fast-growing markets, a company spokesman said.

“We’re aiming to boost cumulative renewable energy capacity to 300 megawatts in China over the next two to three years, focusing on wind power, which is more advanced in China (than any other type of renewable energy source) in terms of legal infrastructure,” the spokesman said.

Energy Storage

The company has been not very proactive in this area but is slowly revving up.It has started a JV with Nissan to reprocess used Lithium Batters for Electric Vehicles.Note EVs and Batteries are going to be one of the biggest Green Sectors with huge subsidies from governments.Nissan already has a JV with NEC to produce Car Batteries.Sumitomo is also looking to mine Rare Earth Minerals in Kazakhstan.These Rare Earth Minerals are essential for Production of Electric Vehicles and China currently has a virtual monopoly in this area.

Nissan and Sumitomo Establish Joint Research Company for Promotion of ’4R Energy’ Business

Nissan Motor Co., Ltd. and Sumitomo Corporation today announced that a new joint-venture company was established on September 14th. The company will conduct research on the second-life use of lithium-ion batteries that have been used previously in electric cars.Naming a second-life business for recyclable advanced lithium-ion batteries as the “4R Energy” business in October 2009, both companies started a joint study to “Reuse, Resell, Refabricate and Recycle” the lithium ion batteries used in electric cars.

Carbon Trading

Sumitomo Mitsui which is one of the biggest banks in the world is setting up Carbon Credit Trading Business.With its origins as a Trading Company,Trading of Carbon is very compatible.While I am no fan of the CDM,Carbon Credit is set to become even a bigger business if USA passes a cap and trade law.Sumitomo is partnering with local banks to set up Carbon Credit Divisions in Emerging Markets like Malaysia and Russia

Sumitomo, Malaysian groups tie up for carbon deals – WBCSD

Sumitomo signed a memorandum of understanding with the Federation of Malaysian Manufacturers (FMM) and the Green Purchasing Network Association Malaysia (GPNM), with the aim of expanding its business further in Southeast Asia.The tie-up will use FMM’s domestic membership of over 2,400 companies, GPNM’s expertise in purchasing environmentally friendly products and services, as well as Sumitomo’s financing and experience in CDM projects.Japan’s third largest trading company signed an agreement with Russia’s Sberbank last month to work together on carbon credit trading.

Japan joins EU and USA in raising concerns over Chinese Muscle Flexing of its Monopoly on Rare Earth Minerals

31 Aug, 2010

China,Japan

Japan is the latest country to raise concerns over the Chinese Monopoly over Rare Earth Minerals.These 17 Minerals are essential for High Technology and Green Industries of the Future and China has a control over 97% of the global deposits of these minerals.The EU had recently warned over the adverse effect over the shortage of these rare minerals while USA is contemplating taking China to the WTO over the same matter.China has defended its action saying that mining of these minerals leads to environmental degradation has reduced the export quota drastically by 72% in the 2nd half of 2010 compared to the First Half.Japanese automakers like Honda,Toyota and Nissan have big plans in the Green Vehicle Sector which uses big amounts of these minerals imported from the mainland.However China’s cracking down over illegal exports and tightening control over these rare minerals has sent down tremors in Japan.

Note China wants to become a leader in the next generation of Green Technology and is heavily subsidising domestic automakers.It has plans over creating national champions in the EV and Hybrid Vehicles and control over these minerals will give it a huge leg up.Already Honda and Coda are looking towards Chinese Battery Technology and Chinese carmakers have made big investments in the EV field.Forcing foreign carmaker to relocate to China to access these rare minerals will be a big win for China as it will give provide technology transfer opportunities.Note China has a policy of giving preferential treatment to Technology Leaders in the Green Energy field.

China Backs Rare Earth Controls as Environmental Step – Businessweek

China defended its controls on exports of rare earth after Japanese officials raised concerns about supplies of the raw materials used in the manufacture of products from cell phones to radar.Restrictions on the rare earth industry will help protect the environment, the state-run Xinhua News Agency cited Chen Deming, China’s commerce minister, as saying yesterday at a media briefing during China-Japan economic talks in Beijing.

China cut its export quotas for rare earth by 72 percent for the second half of this year, according to data from the Ministry of Commerce on July 8. Shipments will be capped at 7,976 metric tons, down from 28,417 tons for the same period a year ago.Japanese officials told their counterparts that the lower quotas could have a major affect on global industry, and demanded early action on easing them, said Satoru Sato, press secretary for visiting Foreign Minister Katsuya Okada. Japan urged China to make ample supplies of rare earths available, Nikkei English News reported earlier today.

China and Tokyo Implement CityWide Cap and Trade Schemes after Copenhagen Failure

25 Aug, 2010

China,Japan

Global hopes of an agreement on Carbon Emissions to stop the advance of Global Warming has been put in the Cold Storage.With little consensus and declining support for Climate Change Mitigation,individual countries are picking up the gauntlet on their own.While Cap and Trade Scheme implement under the Kyoto Protocol has come under fire for irregularities and scams,the popularity of this Policy is growing.China which has a target of reducing Energy Intensity by 40-45% in 2020 from 2005 levels is trying out pilot city cap and trade schemes in Shanghai,Beijing and Tianjin.The Carbon Credits will be generated and traded locally amongst the City’s Companies.Climate Consultancies and Financial Companies like Citibank are providing the trading platform and the role of market makers in these small schemes.While Tianjin has already traded some credits earlier,Tokyo becomes the first big global city to have Carbon Credits traded locally.Note the city cap and trade schemes make more sense than the ones implemented by EU and the United Nations.These global schemes are too unwieldy and bureaucratic and their track record has been less than inspiring so far.

First Tokyo carbon credits trade for $142/tonne – Reuters

The first carbon credits in Tokyo’s new cap-and-trade scheme traded on Monday for 12,000 yen ($142.2) per tonne, well above market rates for units of the climate-warming gas, Point Carbon News reported.

Tokyo launched an emissions trading programme in April capping the city’s top 1,400 emitters and making it the nation’s first mandatory cap-and-trade scheme.Under the plan, large-scale businesses must cut their emissions by an average 7 percent between 2010 and 2014.

Chinese city dips toe in carbon cap and trade – Reuters

The northern Chinese port city of Tianjin launched a small-scale energy intensity trading scheme on Tuesday with three pilot sales, taking a possible first step toward a nationwide carbon cap and trade scheme.

International heavyweights Citigroup Global Markets and Gazprom Marketing and Trading were the buyers of a first set of “Carbon Emission Allowances,” for energy savings equivalent to around 4,500 tonnes of coal, from three suppliers of heating.

The backing of a city government eager to turn the city into a clean energy hub could potentially help Tianjin see off competition from several other pilot exchanges, including ones in Beijing and financial hub Shanghai.

Why is Japanese Technology Giant Toshiba entering the Solar EPC business?

25 Aug, 2010

Concentrated Solar Thermal,Japan,Sharp,Smart Grid,Solar Photovoltaic Energy

Toshiba Follows Global Conglomerates making a Beeline into Solar Energy

Toshiba the Japanese Giant known for its Global Leadership in Nuclear Power Equipment,Electronics and Memory Businesses has decided to become a big player in the Solar EPC business.While Toshiba has decided to increase Green Investments strongly with a JV already concluded for Batteries with Mitsubishi,the EPC venture certainly comes as a surprise.This strategy is quite different from the other global conglomerates entering the Solar Energy Field.South Korean Players like Samsung,LG,Hanwha and Hyundai are all building Crystalline Silicon Modules.General Electric is focusing on the Thin Film Production while Siemens is targeting Concentrated Solar Thermal (CSP) manufacturing.Taiwanese companies like TSMC and AUO are also planning on producing modules rather than building solar power plants.Japanese companies lie Kyocera,Sharp,Mitsubishi and Panasonic are already well established in the production of Solar Modules with Sharp being the largest solar company in terms of revenues.Toshiba’s EPC Strategy therefore seems quite different from the other companies.

Toshiba Planning a big foray into the Solar EPC Business

Note the Solar EPC business typically is a low margin business like the general Enginereering Procurement and Contract (EPC) Sector.A number of Solar Companies like Q-Cells,MEMC,Sunpower and First Solar in recent times have entered this segment to generate a captive demand for their solar products.Nobody derives significant profits from this part of the supply chain due to its lower margin structure.With low barriers of entry and little bargaining power,this part of the Solar Food Chain is the last place you would expect a high technology company like Toshiba to enter.The Nikkei report says that Toshiba wants to enter the Smart Grid business by leveraging its experiece of the Solar EPC business.It is already in the process of building a 10 MW plant in Bulgaria and plans to generate around $2 Billion Dollars annually from US and Europe by 2015.I can’t fathom the reasons behind Toshiba’s entry except that Toshiba finding the other parts of the Solar Supply Chain too crowded decided to enter the EPC Business.

Toshiba plans solar power push in U.S. and Europe: Nikkei – Reuters

Toshiba Corp plans to construct solar power projects in Europe and the United States, hoping to generate 150 billion yen ($1.76 billion) in overseas sales from solar power operations in fiscal 2015, the Nikkei business daily reported.Toshiba is initiating the push with the construction of a 10,000-kilowatt Bulgarian facility scheduled to come on stream next fiscal year, the paper said.

The firm is weighing forays into Italian and U.S. markets and aims to use the expertise in solar power plants to tap demand for smart-grid infrastructure, a market poised to grow worldwide, the Nikkei said.Toshiba plans to be build eight large solar power plants a year in Europe alone in 2015 and may consider local acquisitions of firms with construction knowledge, the daily said.

Mitsubishi Heavy Industries looks to overseas Wind Markets for Growth

17 Jul, 2010

GE,Japan,USA,Wind Energy

Mitsubishi Heavy Industries , the massive Japanese Conglomerate is looking to overseas market for growing its Wind Energy Division.Mitsubishi like other Japanese companies are looking towards Green Industry for growth.Japan already possesses solid strengths in this area with its traditional focus on resource efficiency.While companies like Panansonic and Toyotal looks towards Electric Vehicles and Batteries,Sharp and Kyocera towards Wind Energy,Mitsubishi is focusing its energy on the Wind Sector.

Mitsubishi runs into GE while expanding into the lucrative US market

Mitsubishi is looking to open a massive wind turbine factory in Arkansas ,USA to target the lucrative US market which was the second biggest in 2009.However it is running into stiff opposition from US Wind Energy Leader General Electric which is using the patent lawsuit route to try and block Mitsubishi.GE filed a case in 2008 with the ITC to thward Mitsubishi from selling Wind Turbines in the US,which it lost in 2010.After having failed at the International Trade Commission (ITC),GE filed a civil lawsuit case in Dallas.Mitsubishi filed a counter lawsuit accusing GE of anti trust motives which seems to make sense .Note GE is the market leader in the US with more than a 40% marketshare,however it is facing stiff competition from European competitors Siemens and Vestas .Its a matter of time before cheap Chinese wind turbine producers Goldwind and Sinovel also make a strong push into the US market .

GE-Mitsubishi Wind-Turbine Fight Threatens Arkansas – Bloomberg

The plan may be delayed if the U.S. International Trade Commission, an agency set up to protect U.S. markets from unfair trade practices, sides with GE in a patent battle and bans Mitsubishi turbines from the U.S. market. The agency, which was scheduled to announce a decision today, will now decide by Jan. 8, it said in a notice posted on its Web site. It gave no reason for the delay.GE, the biggest U.S. wind-turbine maker, claims Mitsubishi infringes its patents. If it wins, the Fairfield, Connecticut- based company might prevent Tokyo-based Mitsubishi from increasing its share of the U.S. wind-turbine market, now dominated by GE and Denmark’s Vestas Wind Systems A/S.Wind turbines accounted for 42 percent of new electricity- generating capacity in the U.S. last year, almost matching the additions of natural gas-fueled plants, according to the American Wind Energy Association, an industry trade group.

Mitsubishi looking to partner in the UK Market

The United Kingdom has a very aggressive expansion plan in the offshore Wind Energy sector with almost 30 GW of planned capacity in the North Sea.Mitsubishi probably learning fomr the US experience , plans to partner a local entity while making an entry here.It will tie up with Scottish and Southern Energy to supply 5-7 MW turbines for the UK.Note Scottish and Souther Energy is one of the companies chosen for building offshore wind farms.

Mitsubishi Heavy, UK firm to make wind turbines-Nikkei

Mitsubishi Heavy Industries Ltd said it will tie up with Scottish and Southern Energy Plc to develop turbines for an offshore wind power project in the United Kingdom, the Nikkei business daily reported.The UK government project will add 32 gigawatts, roughly the output of 30 nuclear power plants, to the country’s power generation capacity by 2020, the paper said.

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