The Japan Question

Please help answer my friend Yuji Hashiba‘s question on renewable energy in Japan: “Could you let me know more about renewable energy? As you know, we had and still have a terrible nuke problem, so we are always thinking of some other options.”

I invite my friends to comment on his question. My response below…

Japan has one of the greatest opportunities in energy transformation of any country in the world. As one of the largest economies, but geographically isolated from most of the resources that have historically powered our economies (mostly carbon producing), Japan has the opportunity to build energy independence and economic growth into its economy (which if some people haven’t noticed, hasn’t grown tremendously as of late). With the compounding problem of nuclear failure followed by stark energy efficiency measures from abrupt loss of generating capacity.

At this point last year, we discussed this topic at length at the Aspen Institute’s Clean Energy Roundtable and contemplated assembling a conference to discuss these topics immediately in Japan (Aspen Institute was formed post WWII to help bring Japan and Germany back into the world community and rebuild their economies then). The main points were to be…

1. Stimulate the domestic renewable energy economy and put the pieces to work. Japan already excels in solar production and could massively scale this for its domestic market. So far, Japan has taken on a Germany-like feed in tariff that incentivizes the production of renewable energy (not just installed capacity). Its still early, but this is a good policy that should accelerate Japan’s solar build-out.

2. Increase energy efficiency and build the smartest grid in the world. Japan was already among the most energy efficient economies. By adding building and grid intelligence, better utilization and reduction of existing energy resources can be achieved. This can be done based on Japan’s materials science expertise (high efficiency bi-directional power lines) and information technology / communications expertise. If built in Japan, these technologies can be exported to the rest of the world.

3. Use natural gas as an intermediary opportunity. This was one that i am not too crazy about, but the thinking goes that frack gas is inexpensive and can be exported from the US as LNG. Unfortunately, doing this does not benefit Japan, but serves to expropriate currency from the country that could be reinvested into its domestic energy / manufacturing economy. It is also capital intensive and takes time to build the LNG infrastructure and by the time Japan (and US) does so, natgas prices will likely have risen. My recommendation here is to avoid this and invest into 1. It will have a greater direct benefit to your economy.

I hope this helps answer some of your questions. I look forward to the thoughts of others on this.

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