Northeast Japan Becomes Testing Ground for Renewable Energy Projects

It has been six months since the Great East Japan Earthquake devastated the Tohoku region and precipitated a nuclear incident, the impact of which is still reverberating in Japan and around the world. In the face of such catastrophe -- with more than 15,000 dead, hundreds of thousands left homeless, and millions still living in fear of both real and perceived nuclear radiation -- it can be difficult to look forward positively.

It's nevertheless true such a cataclysmic event can refocus a nation's attention on long-standing problems and move forward with solutions. Specifically, the Earthquake has forced Japan to re-examine its energy equation, with a view toward faster adoption of clean, renewable energy resources. Reflecting this momentum, several cleantech experiments have begun in Fukushima Prefecture and the surrounding Tohoku area, making it a symbol of Japan's efforts to promote renewable energy production.

From Waste to Energy
Among the most immediate needs of local authorities is to dispose of the enormous amount of wreckage left by the Earthquake. The government estimates that, in the three prefectures that bore the brunt of the damage, the total amount of debris is 24.9 million tons. Some forecast that the cost to treat this waste will exceed a trillion yen, or about $13 billion.

An innovative approach to attacking this problem is to both dispose of the debris and, through biomass power generation, provide much-needed electricity to the region. An example is the wood-based biomass plant run by a subsidiary of First Energy Services Company (FESCO) in Shirakawa, Fukushima Prefecture, which continues in full operation. Unlike many biomass plants which depend substantially on fossil fuels for co-combustion generation, the Shirakawa plant uses 100% wood chips and relies significantly on scrap wood. Local municipalities have been working with disposal companies to convert part of the debris to chips that the facility plans to purchase for its raw material needs.

Sendai's Eco Town Gains Business Support
Sendai, the largest city in the Earthquake-affected area, is planning an Eco Town in a joint venture with 20 businesses, including companies like IBM Japan, Sharp, and Kagome, as well as local farming corporations. Under the plan, the city will build a large-scale solar power plant and use the produced power for hydroponic growing and food processing operations that would be among the largest in Japan. Soil-free farming saves the substantial amounts of money and time required to eliminate salt from the land and makes it once again suitable for cultivation. The facilities will be on agricultural fields the size of five Tokyo Domes in the coastal area near Sendai City that was severely hit by the tsunami. The target date for starting up operations is autumn 2012.

An EV Eco Town in Yamagata
Kaminoyama-City in Yamagata intends to promote both business and tourism through its EV Eco Town plan. Under the program, non-emission electric vehicles (EVs) replace gasoline-powered cars for all tourist transportation, including the taxis that take visitors from the railway station and the rental cars used for touring. As such, EV Eco Town creates a healthy travel experience for "the head, the heart, and the environment." The essential infrastructure of charging stations is being assembled from both existing and new facilities. The emphasis on renewable resources is further enhanced by the use of solar energy to provide electricity for the EVs.

Private companies have welcomed the plan. Auto manufacturers including Nissan and Mitsubishi affiliates have offered to lease the cars and chargers for free, while Toppan and Panasonic have donated solar panels and systems.

Help from Silicon Valley
Finally, it is important to note that many groups from abroad are helping the effort to build cleantech projects in the affected area. A prominent example is a $250,000 donation to build a solar PV (photovoltaic) power plant in Soma City of Fukushima. The donor is Elon Musk, who is Founder/CEO of Tesla Motors, a leading California-based electric car venture, and Chairman of a Silicon Valley-based solar distribution venture, SolarCity, which is donating time and resources to manage the project.


Note: This article was written by Cando Advisors -- a consulting firm supporting clients on international business development, strategic alliance, and investment, focusing on the Japanese market -- and co-author Bob Schneider.