US Japan Energy Opportunities May 15, 2013 NEDO Silicon Valley - PowerPoint PPT Presentation

US ‐ Japan Energy Opportunities May 15, 2013 NEDO Silicon Valley Office Osamu Onodera

Strategic Energy Plan of Japan (before Tohoku) – Renewable and Nuclear were to be increased to reduce Co2 emissions but is under review. Aprrox. 40% Zero emission Aprrox. 20% power source 34% Aprrox. 20% Zero emission power source approx. 70% Aprrox. 50% Aprrox. 20% Aprrox. 10% Aprrox. 10% Aprrox. 10% Aprrox. 10% 1 [Source] METI [Source] METI

After 3.11: Nuclear Power Plants Suspended • Only two out of 50 commercial nuclear power plants are currently in operation • Lost approximately 26% out of 1000TWh and 15% out of 280GW Tohoku EPCO Higashidori NPS TEPCO Kashiwazaki-Kariwa NPS Hokkaido EPCO Tomari NPS 1 1 2 3 4 5 6 7 1 2 3 Hokuriku EPCO Shiga NPS 1 2 Tohoku EPCO Onagawa NPS 1 2 3 JAPC Tsuruga Power Station 2 1 KEPCO Mihama Power Station 2 3 1 TEPCO Fukushima Daiichi NPS KEPCO Ohi Power Station 5 6 1 2 3 4 TEPCO Fukushima Daini NPS KEPCO Takahama Power Station 1 2 3 4 1 2 3 4 Chugoku EPCO Shimane NPS JAPC Tokai No. 2 NPS 2 1 Chubu EPCO Hamaoka NPS Kyushu EPCO Genkai NPS 3 4 5 1 2 3 4 Shikoku EPCO Ikata Power Station Kyushu EPCO Sendai NPS 1 2 1 2 3 Output NPS in operation 2 NPS not in operation ≥ 1 million kW <0.5 million kW <1 million kW

Current Energy Mix in Japan Current Energy Mix in Japan Energy conservation and LNG / oil mainly compensated for the decline of nuclear power. Renewable etc. Oil LNG Coal Nuclear 1

Japan’s “innovative energy and environmental strategy” ■ In September 2012, the Japanese government drew up the “innovative energy and environmental strategy”, a long ‐ term energy strategy, with the aim of “devoting all political resources to ending the operation of nuclear plants in the 2030s. ” ■ The strategy aims to generate at least “300 billion kWh by 2030 compared to the 110 billion kWh for 2010 (3 times larger) and 190 billion kWh by 2030 compared to the 25 billion kWh for 2010 (8 times larger) of renewable energy for scenarios excluding hydraulic power”. Renewable energy deployment Amount of power generation with renewable energy 300 or more When hydraulic power generation is excluded, the 2030 target is at least 8 times higher Renewable energy Total: 226.3 (25 billion kWh ‐ > 190 excluding hydraulic billion kWh) power Hydraulic power Total: 110 （ billion kWh ） Expected result of the innovative energy and Current basic energy plan 2010 environmental strategy in 2030 [Source] METI [Source] METI

Feed In Tariff System: Procurement cost and time Procurement cost and time <Unless otherwise specified, cost includes consumption tax> Solar 10kW or more Less than 10kW Wind 20kW or more Less than 20kW Cost 42 JPY 42JPY (before tax) (*) Cost 23.1 JPY 57.75 JPY Time 20 years 10 years Time 20 years 20 years (*) Equivalent to 48 yen when subsidy is included Revised to 36 yen/kwh for larger systems and 38 yen/kwh for smaller systems From 1,000kW to 30,000 kW From 200kW to 1,000 kW Hydraulic Less than 200kW Cost 25.2 JPY 30.45 JPY 35.7JPY Time 20 years 20 years 20 years Geothermal 15,000kw or more Less than 15,000 kW Cost 27.3 JPY 42 JPY Time 15 years 15 years Power generation Power generation Power generation Power generation Power generation Biomass with methane by burning unused by burning general by burning recycled by burning waste fermentation gas timber timber timber Cost 40.95 JPY 33.6 JPY 25.2 JPY 17.85 JPY 13.65 JPY Time 20 years 20 years 20 years 20 years 20 years 5 [Source] METI [Source] METI

Status after the start of the Feed ‐ in Tariff ■ Between April and December 2012, about 1.2 GW of renewable energy was installed , of which solar energy accounts for more than 90%. Since several mega solar power plants will start operation in the latter half of FY2012, the share of solar power for the non ‐ residential housing sector is expected to increase. ■ New facilities approval by METI after the Feed ‐ in Tariff started has let to approved output of 5.3 GW as of end of December 2012. Many large capacity facilities require longer construction times are not expected to start operation until after FY2012 and therefore some newly approved facilities may not be included in this year’s results. ■ The FIT has led to an RE surcharge of average 120 yen per household (300kwh X 0,35yen/kwh plus 300kwh X 0.02 ‐ 0.09yen/kwh) <Deployment of renewable energy for FY2012 (as of the end of December) > Capacity of facilities that Capacity of facilities that Amount deployed as of were approved by the end started operation between FY2011 of Dec. for the fixed price Apr. and Dec. purchase system Solar power Approx. 4,000MW 911MW 847MW (residential) Solar power Approx. 800MW 208MW 3857MW (non ‐ residential) Wind Approx. 2,500MW 34MW 456MW Mid ‐ to small ‐ sized hydraulic Approx. 9,350MW 1MW Less than 10MW (1000kW or more) Mid ‐ to small ‐ sized hydraulic Approx. 200MW 2MW 3MW (Less than 1000kW) Biomass Approx. 2,100MW 22MW 72MW Geothermal Approx. 500MW Less than 10MW Less than 10MW Total Approx. 19,450MW 1178MW 5,280MW *Capacity figures include facilities that started operation between April to the end of September and therefore include facilities that started operation under the old system from April to the end of June. As a result, some capacity values may be bigger than the values approved by the 6 [Source] METI [Source] METI end of September based on the fixed price purchase system enacted in July

Peak Demand and Tie Line capacity in Japan Maximum NPP Site EPC Site Name Total Capacity Hokkaido Total 2.07 GW Tomari NPP, 3 units Tohoku Total 2.174 GW Onagawa NPP, 3 units Kashiwazaki ‐ Kariwa NPP, Tokyo Total 8.212 GW 7 units Chubu Total 3.504 GW Hamaoka NPP, 5 units 60Hz 50Hz Hokuriku Total 1.898 GW Shika NPP, 2 units Hokkaido [2010] 5.79 GW Kansai Total 4.71 GW Ohi NPP, 4 units [2011] 5.68 GW Chugoku Total 1.28 GW Shimane NPP, 2 units Kitahon Shikoku Total 2.022 GW Ikata NPP, 3 units 0.6GW DC Tie line Kyushu Total 3.478 GW Genkai NPP, 4 units Hokuriku Tohoku [2010] 5.73 GW [2010] 15.57 GW 5.57GW [2011] 5.33 GW [2011] 13.62 GW 16.66GW Chugoku Kansai BTB 0.3GW 6.31GW [2010] 12.01 GW [2010] 30.95 GW 5.57GW [2011] 10.83 GW [2011] 27.84 GW Chubu Tokyo 5.57GW 2.4GW [2010] 27.09 GW [2010] 59.99 GW DC Tie line 1.4GW [2011] 25.20 GW [2011] 49.22 GW Kyushu Shikoku FC [2010] 17.50 GW [2010] 5.97 GW 1.035GW [2011] 15.44GW [2011] 5.44 GW 7 [Source] METI [Source] METI

METI’s planned actions on Electricity System Reform • Nation wide transmission operation • Full retail competition • More active wholesale market competition • Unbundling of transmission/distribution sector (ISO style or TSO style)

- As of March 2013, there are now over 1650 fast chargers in Japan, and 4800 normal chargers available to the public - A FY 2012 supplementary budget of approx 1 billion USD was passed to support installation of additional charging infrastructure (1/2 -2/3 subsidy of equipment and installation cost) Fast charger growth (Location) 9

Various configurations of cooperation • Large / Large Company – Large / Small Company • Strategic Collaboration, IP Collaboration, JV, Buy ‐ out • Technology / Finance • Targeting US / JP / Global Market Examples GE – Fuji Electric Smart meters Panasonic – Itron Smart meters Panasonic – Power ‐ One Energy storage and PV Toshiba – Landis & Gyr Smart Grid Toshiba – Sunpower PV Hitachi – Silver Spring Networks Smart meters Eaton – Takaoka DC Quick Charger Daikin – Goodman Air Conditioning Tesla – Toyota Electric Vehicles Ford – Toyota Hybrid Systems for Trucks NRG Group – Eurus Energy 45 MW PV plant