Monday, 10 April 2017

Japan, Norway: Developing a carbon neutral hydrogen value chain

Source: "Japanese-Norwegian partnership in developing a carbon neutral hydrogen value chain", Opportunities Abroad - An Innovative Norway-blog, 30th March, by Innovation Norway Asia

Hydrogen produced from Norwegian renewable power can succeed in the Japanese energy market.

Japan and Norway are both globally prominent energy nations and are investing considerably in R&D as well as in commercialization of technology. While Norway is gifted with rich natural resources and is a net exporter of primary energy, Japan is a globally considerable importer of fossil fuels, increasingly after the 2011 Fukushima nuclear accident.

The complementarity is source of a productive partnership in promoting cost efficient, reliable, safe and scalable energy value chains. Japan has since the early 1980s invested in developing fuel cell technologies and is a driver for efficient components and systems. Norwegian R&D institutions and companies have worked closely with Japanese partners on hydrogen related technologies for some time already.

Increasing attention towards hydrogen

Hydrogen as an energy carrier is gaining increasing attention, not least in Japan, where it will make their total energy system more flexible and will support a green development. Japan’s hydrogen and fuel cell road map sets goals for implementation of an infrastructure where fuel cell vehicles, stationary fuel cells and larger scale power production will grow coordinated. A national effort is done to encourage the various commercial players through incentives to contribute in realizing such a market scale up.

What Japan is lacking most is the ability to bring carbon neutral hydrogen or hydrogen rich energy carriers to the market cost efficiently. Hydrogen produced from Norwegian renewable power through electrolysis or from natural gas with CCS is gaining attention in the Japanese market, and certainly as an alternative to brown coal based hydrogen production with CCS in Australia, already under development.

Japan-Norway Hydrogen Week

Seeking opportunities for hydrogen value chain partnership was the starting point for bringing together two national teams during the Japan-Norway Hydrogen Week in February/March. Innovation Norway, in collaboration with the Research Council of Norway, the Norwegian Embassy and Japanese partners organized a hydrogen value chain seminar on February 28th at the Norwegian Embassy in Tokyo. Around 30 Norwegian representatives from R&D, institutions, industry and municipalities gave a total picture of Norway as an attractive partner and supplier of large scale carbon free hydrogen, either as hydrogen or as ammonia (NH3).

Representatives from Hexagon, NEL Hydrogen, Yara, DnV GL and Gexcon presented to a Japanese audience of 60 in number their important contributions to a growing Japanese market, supported by their research partners from SINTEF, NTNU, IFE and CMR Prototech. Sogn og Fjordane County’s activity on promoting their region as a green hydrogen producer based on excess hydro power and development of hydrogen driven boats attracted attention as an example of a regional test-lab. The 2020 Tokyo Olympics will be an important test lab for Japan to demonstrate state of the art hydrogen systems, and there are synergies to be explored and utilized.

At the Norwegian pavilion of the Tokyo Fuel Cell EXPO, concluding the Hydrogen Week, the Norwegian team agreed that a joint national team effort is enhancing individual opportunities for succeeding in the Japanese market. A strong interest was expressed to follow up through the leadership of Innovation Norway and the Research Council of Norway and we are already making plans on future activities.

Japan’s renewable energy market in transition – ready to scale?

Japan is struggling to define the golden path for it’s energy policies, balancing energy security, de-carbonization and economic effectiveness. With 9 power utilities traditionally protecting their regional monopolies, Japan is now, towards 2020 undergoing a longed for comprehensive power market deregulation process, starting with unbundling the retail side one year ago.

Similarly, the gas distribution market is undergoing a deregulation process. These measures, implemented as a consequence of the Fukushima nuclear plant accident in 2011, will open up for new dynamics in the energy market. Even though the Fukushima accident increased the general interest and awareness for the position of renewables, the market is still overshadowed and influenced by lack of political willingness to cope with the true cost of nuclear power. Costs of renewables have shown a tremendous drop in global markets, while in Japan, holding stringent and unnecessary regulations, costs are still kept high.

PV installation costs are for example still more than double that of China and Germany. IN Tokyo hosted this week NTNU’s annual Japan-seminar on “Policies to promote renewable energy – New challenges and opportunities”. Parliament member Taro Kono, a well-known opponent to nuclear power in the government party LDP gave a thorough insight into Japan’s lack of political willingness to resist a conservative business sector lobby, still favoring to bring nuclear power back to a power market share above 20%.

Participants from academia, industry and NGOs gave a picture of a market in transition, composed of rigid and defensive central government policies on one side and a growing bottom-up momentum of entrepreneurs and public engagement to promote renewable solutions on the other.

Norway’s more than 30 year of experience from a deregulated power market, with a wide range of technology and system promoters obtain attraction in a Japanese market. Opportunities for Norwegian vendors are many, if the understanding of the market hurdles and opportunities are properly understood. IN Tokyo has over time invested in positioning Norway in this market, undergoing a very important, but complex market transition.

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