Renewable Energy 2016 – Japan’s Annual Renewable Energy Exhibition Shows Increasing Amounts of International Players

Background:

From 29 June to 1 July, Pacifico Yokohama in Yokohama, Japan welcomed the 11^th edition of the renewable energy exhibition “Renewable Energy 2016”. This yearly event is organized by the Japan Council for Renewable Energy (JCRE)[1] and co-organized by organizations such as the New Energy and Industrial Technology Development Organization (NEDO), the New Energy Foundation (NEF), the National Institute of Advanced Industrial Science and Technology (AIST) and the Japan Science and Technology Agency (JST), while being supported by numerous Japanese ministries such as the METI, the MoE, and others.

As with previous years, the event’s list of exhibitors included a large proportion of Japanese companies and comparatively few foreign companies for companies classified in the non-PV sector. Most of the major Japanese hydroelectricity generation manufacturers were present, while the amount of marine energy-related exhibitors were fewer in numbers. Japanese companies related to the past and present development of marine energy turbines were not present.

Besides the exhibitors and company booths, the exhibition also had numerous conferences divided into themes including a “Small-Hydro & Non-Conventional Energy” and “Ocean Energy” forum featuring presentations given by both Japanese and some international speakers for the ‘Ocean Energy’ Forum, namely the representatives from the Carbon Trust and from OpenHydro Technology, well-known players in the ocean energy market.

EU-Japan Centre Comments on the significance of this event:

As many companies all over the country as well as outside of Japan gather here, events like these are a good opportunity to explore the market of your interest. It is also a good opportunity to gauge the interest in foreign technology. With the exception of the Japan Small Hydropower Co., Ltd. which is working in partnership with Czech hydro energy maker Mavel a.s. since the mid-2000s when the small hydro market first took off in Japan, present Japanese companies noted that they had just started, or were planning on using foreign (small) hydropower generating machines as their main product for sales inside Japan, showing a definite interest in foreign hydro-energy technology in the Japanese market.

When asked why Japanese (non-manufacturing) companies were looking to partner with non-Japanese companies, most people noted the small-scale of Japanese small-hydro manufacturers’ operations, and the current state of apparent saturation of the supply for some companies in Japan, leaving for extra potential supply to what seems to be a growing demand. Another reason given by Japanese companies that have recently partnered with foreign manufacturers, is the technology’s perceived higher efficiency rate and lower overall cost[2] of the final product.

Furthermore, unlike European countries where small-hydro has been continuously developed over the past decennia, thus increasing the level of reliability of the foreign technology, the amount of Japanese companies with the expertise and know-how of small-hydro electricity generation manufacturing are scarce even though more new companies[3] have been making their appearance.

While no official data is available, when asked about the Japanese small-hydro electricity market, an estimate ranging from 50 to 100 projects (incl. updates and maintenance projects, and installation of new machines) was often given, with a big share of the existing Japanese manufacturing companies producing around five new installation projects a year, with the exception of relatively big companies such as Tanaka Hydropower.

Meanwhile, besides this partnership with Japanese local vendors, some European companies, such as Austrian manufacturer WWS Wasserkraft GmbH & Co. KG, have taken the other option in the distribution route and set up their own Japanese subsidiary[4], by-passing the need for a third-party local Japanese partner.

However, non-Japanese manufacturers that were present and interested in entering the Japanese market also noted the vagueness of the legislative aspects of the market. The small-hydro market has increasingly made efforts to lower the entry barriers[5] for small-hydro deployment in even rural areas, but some foreign companies still seem to sense some vagueness and potential NTBs to the market. Furthermore, non-Japanese manufacturers also uttered the problem of the somewhat closed-off mind-set of this market, more specifically, aspects such as the need for previous experience in Japan and the importance of existing connections in the Japanese markets seem to be viewed as large hurdles for potential entrants to overcome[6]. This aspect also gets increasingly more important as the size of a project increases; large hydro facilities’ refurbishments/upgrades are mostly left only at the hands of a handful of established Japanese companies making the entry into this particular segment of the hydroelectricity market an even more challenging task.

While difficult to compare to previous editions of this yearly exhibition, over the past few years, the total amount of recorded visitors published by the exhibition has declined. While data of the amount of exhibitors for the year 2016 have not yet been released, looking at past years’ data, we can also see a decreasing amount of exhibitors over the years. Whether this decrease is primarily caused on the PV part of the exhibition or the non-PV part of the exhibition^[7], can however not be determined based solely on the data given on the official website[8].

For the marine energy market, when looking at past attending exhibitors’ lists, we can notice a decrease[9] in the amount of present Japanese companies related to[10] marine energy. Meanwhile, other organizations such as the Saga Prefectural Office[11] point at the apparent continuing interest in marine energy and the effort on the Japanese side to try and accommodate more of this up-and-coming renewable energy. The forum speakers included representatives from amongst others the NEDO talking about the Japanese marine energy market’s recent developments and roadblocks ahead. Particularly interesting to note is the presence of the aforementioned Carbon Trust[12] and OpenHydro Technology[13].

In conclusion, possibly due to a change in public acceptance of small hydro, a change in legislation or a change in availability in funding for R&D of ‘home-grown’ small hydro and marine energy[14], this exhibition seemed to confirm the increasing interest, and need, for foreign technology in order to fulfil the markets’ demand and the steps already taken towards the fulfilment of this goal[15]. It also shows the slowly increasing presence of European companies in one way or another, most likely in order to meet demand of a market that is increasingly looking towards non-conventional power sources such as small-hydro and marine energy. As is usual for the Japanese market, however, this process is a slow and gradual one and will need cooperation and ways of introducing foreign technology to Japanese companies still reluctant about importing foreign technology.

Prepared by Guillaume Hennequin, Minerva Research Fellow, EU-Japan Centre for Industrial Cooperation

[1] The Japan Council for Renewable Energy is a corporate NPO that was established in 2007 with the involvement of major renewable energy market players in Japan such as the NEDO, AIST and the NEF. Its activities include the planning and promotion of renewable energy by organizing events such as this yearly exhibition and forum, and an international conference every four years, using the support of key players in the RET market as well as creating networking activities for the different RE related fields.
[2] An anonymous source deeply involved in the Japanese small-hydro electricity market mentioned prices costing up to three times more when bought from Japanese manufacturers depending on the project and the technology.
[3] E.g. Kyowa Engineering Consultants Co., Ltd., which started as a consulting company, who will be joining the small-hydro market with a turbine of their own.
[4] By merging with a Japanese company, creating WWS-JAPAN.
[5] Such as the change of certain procedures needed to be able to deploy small hydro generation in certain Japanese waterways.
[6] This difficulty is, however, not unique to this market, but is shared with many other markets in Japan.
[7] The ‘Renewable Energy Exhibition’ is run together with the PV Exhibition that focuses entirely on solar photovoltaic technology and the numbers of both exhibitions are released together without making a distinction in amount of visitors or exhibitors for both.
[8] Besides reverting to analogue methods.
[9] E.g. Japanese company Hitachi Zosen and Mitsui Zosen were either not present or categorised as Marine Energy-related present this year.
[10] Or rather, R&D as Japanese companies are still in early stages of marine energy generation technology.
[11] Saga Prefecture has in recent years been appointed as one of the official offshore energy testing sites similar to Europe’s EMEC etc.
[12] The Carbon Trust is an originally U.K.-based organisation that helps the development of RETs and advise on steps to take  in order to increase low-carbon strategies, energy efficiency etc.
[13] OpenHydro Technology is a DCNS company and is one of the leading companies in tidal energy systems.
[14] A presentation given during “Ocean Energy” forum shows that many marine energy related research projects in Japan have been cancelled.
[15] E.g.: Since the approval of the Iwate Prefecture’s city of Kamaishi in April 2015, Japan has now officially 7 marine energy testing fields in place.