Supporting the Expansion of Global Business for J … Heat Recovery (India) The Model Project for...

2014No.54

Reporting on Today and Tomorrow’s Energy, Environmental and Industrial Technologies

North America

Asia

Europe

Middle East

［Featured Artic le］

NEDO’s Overseas Projec tsSupporting the Expansion of Global Business for J apanese Com panies

NEDO’sOverseas ProjectsIn this issue, we feature current status of demonstration projects undertaken by NEDO in areas all over the world, as well as the regional initiatives taken by NEDO’s representative offices.

Smart Community

See featured article in Focus NEDO No. 52

Recycling

Robotic/Mechanical Systems


Water Recycle

Energy Conservation


Renewable Energy


［Featured Article］

New Technologies of the Future Being Disseminated from Japan to the WorldExperimental Study for Water Reuse Business for Developing Area in the Middle East Concerning the Project on Water-Saving Recycling System (UAE)

Smart Community Demonstration Project in Hawaii (USA)

Smart Community Demonstration Project in Lyon (France)

Robotic Suit Hal® Demonstration Test (Germany)

The Model Project for Sinter Cooler Waste Heat Recovery (India)

The Model Project for Energy Management Systems in Telecommunication Towers in India (India)

The Model Project for Reducing Energy Consumption in a Commercial Building (Thailand)

Representative Office in Europe

page 14

Representative Office in New Delhi

page 15

Representative Office in Beijing

page 13

Representative Office in Bangkok

page 12

The Model Project for Reducing Energy

Smart Community Demonstration Project

Smart Community Smart Community Smart Community Smart Community Smart Community Smart Community Smart Community Demonstration Project Demonstration Project Demonstration Project Demonstration Project in Hawaii (USA)in Hawaii (USA)in Hawaii (USA)in Hawaii (USA)in Hawaii (USA)

Experimental Study for Water Reuse Business Experimental Study for Water Reuse Business Experimental Study for Water Reuse Business Experimental Study for Water Reuse Business Experimental Study for Water Reuse Business Experimental Study for Water Reuse Business Experimental Study for Water Reuse Business Experimental Study for Water Reuse Business Experimental Study for Water Reuse Business Experimental Study for Water Reuse Business

in Europein Europein Europein Europein Europein Europein Europepage 14page 14page 14page 14

Representative Office in Silicon Valley

page 11Representative Office in Washington D.C.

page 10

ASEAN

Water Recycle Renewable Energy

Renewable Energy

Energy Conservation

Robotic/Mechanical Systems

Recycling

Northeast Asia

Energy Conservation

Robotic/Mechanical

Systems

Recycling

Europe

Smart Communities

Energy Conservation

Robotic/Mechanical

Systems

USA

Smart Community

Energy Conservation

India

Energy Conservation

Recycling

Water Recycle

Middle East

02 03

C o n t e n t s

2014 no.54

NEDO’sOverseasProjects

Promoting Overseas Projects and Bridge the World

Aiming for Increased Global Energy Efficiency through the International Deployment of Japanese Energy Conservation Technologies

Opening up the Expanding Water Business Market through Proposals for Water Treatment Systems that Account for Local Needs

USARepresentative Office in Washington D.C.Representative Office in Silicon Valley

ThailandRepresentative Office in Bangkok

ChinaRepresentative Office in Beijing

EuropeRepresentative Office in Europe

IndiaRepresentative Office in New Delhi

NEDO information

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2014 no.54

FeaturedArticle

International Affairs Department

Energy Conservation Technology Department

Environmental Department

Representative Office Activities

Energy demand is expected to double from 1990 to 2035. The growth of energy consumption in developing nations is especially noteworthy.

Source: World Energy Outlook 2013. New Policies Scenario, IEA.

04 05

Since the 1990s, NEDO has been making a contribution to promote advanced Japanese energy-saving technology with a focus on Asia. In recent years we have also made our great effort into overseas projects involving water and sewer services, transportation systems and smart communities.

Joined the former Ministry of International Trade and Industry in 1987 and worked as Director for Regional Policy, the Ministry of Land, Infrastructure, Transport and Tourism as well as Director of the Manufacturing Industries Policy among other posts. He began his current post in 2014. His area of expertise is energy security policy and international standardization theory. He also works as a visiting professor at Kyushu University, teaching a regional policy designer training course and energy security advanced study course while serving as a Fellow at the National Institute of Advanced Industrial Science and Technology among other posts. He has a Ph.D. in Business Administration and is a licensed First-class Architect.

• Regulations• Country Conditions

• Regulations• Country Conditions

Hiroyasu HorioDirector GeneralNEDO International Affairs Department

Promoting Overseas Projects and Bridge the World

2014 no.54

Promoting Projects through Win-Win Relationships

NEDO embarked on overseas project in 1993. Although Japan’s economy was slackening after the bubble burst around this time, developing countries in Asia and other regions were just beginning to develop rapidly and Japanese companies started to move operations overseas to Asia. The likelihood of these conditions leading to tighter global energy markets and environmental problems were growing. For this reason, NEDO has made efforts to expand the use of Japan’s advanced technologies in the areas of energy and environment with a focus on Asia. Although the approach in the beginning was to provide indirect support for companies’ overseas development, this approach has now changed. Now NEDO’s role is more visible as we get partner country’s agreement on how to proceed projects before we start a project, which enables us to involve Japanese companies, as well as the partner governments (national and local) and local companies.

Although most of current NEDO’s projects are international ones, we will continuously need to establish win-win relationships between Japan and the partner countries. For example, in regard to energy issues, as the amount of energy consumption steadily increases in developing countries will evoke intense worldwide scramble for energy. The price of crude oil which was about $20 per barrel in the 1990s has once climbed over $100 per barrel in 2014. Since the price of the crude oil is highly fluxional, there is always a possibility that the price will harden in the near future. On this point, technology to reduce energy consumption will be important.

Japan has not only energy conservation technologies but also the technologies to make use of energy resource that has never been used. We believe that these technologies will contribute to solve energy and environmental issues, maintain energy security of partner countries, and to solve global problems.

NEDO implements projects built on agreement with partner countries’ government, which enables us to take on large- scale and high-risk projects.

Managing Projects through 6 Representative Offices

NEDO has 6 representative offices and each office gathers a range of information while maintaining key contacts with government representatives. Using these information, projects are planned in Japan and participating companies are solicited.

Before actually implementing a project, an Memorandum of Understanding (MOU) is signed with the government of the partner country. MOU provides a framework for all the aspects of the project implementation from starting project activities to eventual introduction and dissemination of the technologies resulted from the project. Companies from both Japan and the partner countries implement the project in cooperation.

When proceeding an overseas project, Japanese technology cannot be simply introduced as is and there is a need for customization based on the partner nation’s situations, rules and regulations, and technological standards. Therefore, these projects are often challenging. For this reason, negotiations with local governments and day-to-day management are conducted through NEDO’s representative offices to make use of geographical advantage.

Trends and Outlook for Overseas Projects

The characteristics of overseas projects have changed significantly within the past 20 years. While most cases in the past were done through cooperation between one company and NEDO, currently the number of cases involving 5 to 10 companies operating as a consortium has increased. There are not only large companies, but small and medium-sized companies with advanced technological capabilities as well. In addition, we have become involved in comprehensive systems that include electric power, transportation, water and hospital systems. At the same time, the stance of partner countries has also changed, and rather than simply wanting technology itself, there are more a growing number of voices requesting solutions to local problems,

NEDO wants to explore a range of technologies matched to the needs of each country from the perspective of both the possibility of spreading out technology and maintaining energy security in regions of exceptional economic growth as well as other regions. In this sense, we are open to cooperate with all companies with useful technology, regardless of whether they are large or small.

Furthermore, in order to respond to the needs of partner countries, it will be necessary to make efforts to lower costs by introducing technology that has been implemented to some extent, and by manufacturing core parts in Japan and peripheral parts at the local level. NEDO would also like to work on local human resources development.

［Featured Article］NEDO’s Overseas Projects

International Affairs

Department

Global Energy Demand (Unit: Mtoe)

Impact of NEDO Projects (Comparison of Overseas Operation)

Typical Overseas Operation NEDO’s Overseas Projects

OthersNo

n O

ECD-

mem

ber

cou

ntrie

sO

ECD

mem

ber

coun

tries

Central and South AmericaAfricaMiddle EastSoutheast AsiaIndia

China

Others

USA

JapanEU

TechnologySeeds

Overseas Needs

1990 2000 2011 2020 2030 2035

8769 10071

13070

15025

1662317387

Technology Seeds

NEDO Government

Overseas Needs

Agreement Formation

The goal is to demonstrate the effectiveness of exceptional Japanese energy conservation technology and to spread this technology locally in India, by introducing sinter cooler waste heat recovery facilities that have marked significant successes in the Japanese steel industry to the Indian steel business. This facility uses exhaust heat that was previously discharged into the atmosphere, and generates electricity by installing an exhaust heat recovery hood downstream from the sintering cooler, recovering energy from the hot air used for cooling in a heat recovery boiler and generating steam. As a result, we expect that energy savings and CO2 reduction will be achieved while environmental benefits are expected due to the closed cycle that does not release high concentrations of fine particulates.Implementation period: FY2009-FY2014Partner: Ministry of Steel

06 072014 no.54

Japan’s Energy Efficiency is Approximately Twice the US and EU

While Japan’s GDP grew by 2.4 times from 1973 to 2012, the amount of energy consumption grew by only 1.3 times during this period. This is because Japan has taken steps to achieve efficient use of energy. The oil shock experiences of 1973 and 1979 led to the enactment of Law Concerning the Rational Use of Energy.

The energy-saving impact on industrial sector was particularly noteworthy, with consumption in 2012 falling to 0.8 times the level of 1973, or in other words, it achieved a successful reduction in consumption. NEDO believes that energy conservation policies that involve both private and public sectors, such as the “Top-runner Approach,” as well as progress in energy conservation technologies have contributed to this.

Furthermore, even in terms of energy efficiency, one can see that Japan has a high level of efficiency when compared with other countries. For example, if Japan’s energy efficiency index is defined as 1, the US is 1.6; Europe is 1.1; Korea is 2.3; and India and China are 5.2 and 5.5 respectively. Based on this, there is no question that

energy efficiency could progress significantly on a global scale if foreign countries adopted Japan’s energy conservation technology.

In fact, through demonstration projects from the early 1990s NEDO has introduced exceptional Japanese energy conservation technology in Asia and other countries. This has led to a crude oil equivalent reduction of approximately 10 million kiloliters per year and a CO2 exhaust reduction of roughly 35 million tons per year.

Nonetheless, Japanese energy conservation technology is more expensive than those of other countries, and it is not easy for Japanese manufacturers to further expand the market share due to lack of brand awareness and past sales. NEDO is implementing international demonstration projects around the world, in order to resolve these types of problems and to deliver high-quality Japanese products. NEDO wants to provide Japanese companies a foothold for participation in the local market by introducing Japanese technology and products customized for local conditions and supporting their spread in the region.

Aiming for Energy Savings in Southeast Asia and India

Energy Conservation Technology Department is currently moving forward with overseas projects in places such as India. One of the projects in India is a demonstration using Japanese waste heat recovery technology and being conducted jointly with the Indian Ministry of Steel. Powdered iron ore is sintered at the iron foundry and heat from the high temperature air discharged through the cooling process is recovered in the exhaust heat recovery boiler. Electricity is generated with the generator and turbines using steam produced by the boiler. In this way, it is possible to eliminate approximately 6% of the iron foundry’s electric consumption (equivalent to 34,000 tons of crude oil consumed annually).

Another project in India is a demonstration of mobile phone base station energy management systems (EMS). Optimal energy management is conducted through the use of renewable energy and lithium ion batteries in dozens of base stations. The aim is to reduce diesel fuel consumption and achieve a system that provides a stable supply of electricity with energy savings of approximately 50% projected. A basic cooperative agreement for a demonstration project was signed with the Indian government in August of 2014 and the project was launched thereafter.

NEDO also conducted demonstration tests with the implementation of Japanese energy conservation technology (hot water heat pump, a building energy management system (BEMS), and LED lightening) at the Amari Watergate Bangkok in Bangkok, Thailand. Energy savings of roughly 15% were achieved through the tests. There are a number of other projects active in Thailand.

In the Future Energy Conservation Technology from Small and Medium-sized Businesses Will Also Go Overseas

NEDO wants to spread this energy saving technology not only in India and Thailand but also in neighboring countries in the future. In addition, NEDO wants to support progress in spreading advanced Japanese energy conservation technology from small and medium-sized companies overseas. Moreover, NEDO would like Japanese firms that have global networks including trading companies to take advantage of NEDO’s schemes. In this way, NEDO’s overseas projects can make significant progress.

NEDO is conducting demonstration tests of energy conservation technologies mainly in Asia, and significant results are already emerging. In order to disperse and expand these energy conservation technologies even more in the future, NEDO is considering further developments efforts.

Aiming for Increased Global Energy Efficiency through the International Deployment of Japanese Energy Conservation Technologies

Masahide ShimaDirector GeneralNEDO Energy Conservation Technology Department

Case Project #1International Project for Increasing the Efficient Use of Energy and System Demonstration Project (International Project for Increasing the Efficient Use of Energy)

International Model Project for Increasing the Efficient Use of EnergyModel Project for Sinter Cooler Waste Heat Recovery

India

Cooler hood

*Top-runner approach: an approach that designates specific products such as home electronics and automobiles, sets benchmarks for these products including the amount of electricity consumed that exceed the performance of the most exceptional (top-runner) products at the time, and requires manufacturers and importers to meet the targets. In the private sector, automobiles, air conditioners, and lighting devices are typical examples.

In 1980 he joined the former Ministry of Economy, Trade, and Industry. In 2005 he became an Director for International Investment of Trade and Investment Facilitation Division, the Trade and Economic Cooperation Bureau. He later served as the Director for Regional Assessment of the Regional Economic and Industrial Policy Division under the Regional Economic and Industrial Policy Group, and Director General of Electricity and Gas Industry Department Hokuriku of Chubu Bureau of Economy, Trade and Industry. In 2012, he was transferred to the New Energy and Industrial Technology Development Organization (as Director General of the Energy Conservation Technology Department). He was assigned to the current position in 2014.

While GDP has increased by 2.4 times since the oil crises, energy consumption in the industrial sector has decreased by 10%. Meanwhile, the consumer sector increased usage by 2.4 times (commercial sector: 2.8, residential sector: 2.1). The industrial sector still accounts for 40% of the total amount of energy consumption.

Signing of the basic cooperative agreement with the Indian government (mobile phone base station energy conservation project)

Targeting Thai (commercial) facilities which consumption of energy have been significantly increasing, NEDO is conducting an energy-saving model project that combines Japanese equipment and technology to contribute to energy conservation in such consumer facilities. NEDO will also explore expanding energy conservation services represented by ESCO projects in the future. This project is expected to reduce greenhouse gas effects through the introduction of various energy-saving technology such as high-efficiency devices, energy-saving technology including invertors utilizing reduced transportation power, renewable energy technology such as heat pumps, as well as building energy management system (BEMS) that optimizes energy management and operation.Implementation period: FY2011-FY2013Partners: Department of Alternative Energy Development and Efficiency, Ministry of Energy

Case Project #3International Project for Increasing the Efficient Use of Energy and System Demonstration Project (International Project for Increasing the Efficient Use of Energy)

International Model Project for Increasing the Efficient Use of EnergyThe Model Project for Reducing Energy Consumption in a Commercial Building

Amari Watergate Bangkok

With the installation of mobile phone base stations growing rapidly in India, the goal is, through the introduction of renewable energy and utilization of Japanese energy management technology while reducing environmental burdens, to achieve a stable electricity supply and expand the use of the Japanese technology in India. This system reduces energy consumption by implementing an energy management system that utilizes solar electric generation and lithium batteries. Furthermore, by applying highly reflective photo-catalytic paint on the surface of the system storage containers, temperature increases inside the containers are inhibited and the electricity required for cooling is reduced. Through this synergetic effect, reduced operational costs and environmental impacts are anticipated. Implementation period: FY2014-FY2016Partners: Ministry of Communications and Information Technology, Ministry of New and Renewable Energy, and Ministry of Finance

Case Project #2International Project for Increasing the Efficient Use of Energy and System Demonstration Project The Model Project for Energy Management Systems in Telecommunication Towers in India

Example of a telecommunication tower in India

India

Thailand

Changes in Net Energy Consumption in Japan Comparison of Energy Efficiency by Country (2010)

Source: IEA energy balance 2012/2011Note: Calculated as primary energy supply (tons of oil equivalent) / actual

GDP, with Japan’s result converted to an index of 1.

1

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

1.1 1.3 1.6 1.92.3

5.2 5.5

7.2

2.3

197320121.3 times197320121.8 times

Net Energy Consumption

197320122.8 times

197320122.1 times

197320120.8 times

197320122.4 times


Energy Conservation Technology Department

450

400

350

300

250

200

150

100

50

0

Source: Comprehensive Energy Statistics, Annual Report on National Accounts, and EDMC Handbook of Energy and Economic Statistics

1973 1980 1990 2000 2010

600

500

400

300

200

100

0

one million crude oil equivalent kl 2005 constant trillion yen

16.4%

9.2%

8.9%

65.5%

2012

Actual GDP197320122.4 times Transportation

sector86 million kl

23.1%

Commercial sector

74 million kl20.0%

Residential sector

53 million kl14.3%

Industrial sector

158 million kl42.6%

Transp

ortatio

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ctor

Comm

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Priv

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Sect

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siden

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Indus

trial

Secto

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Japa

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EU 2

7

Aust

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USA

Can

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Sout

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orea

Indi

a

Chi

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Rus

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Wor

ld

Aver

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08 09

UAE Water-Saving Recycling Systems Elicit a Big Response

NEDO has been getting into the areas of operation and management, proposing systems that combine key technologies where Japanese companies have strengths, such as membrane and energy-saving technologies. Specifically, in Asia and other regions, we have made the case for the Japanese technology by installing facilities and actually putting them into operation.

By 2025 a Large Market of Roughly 87 Trillion Yen is Expected

The Environmental Department is promoting overseas projects in five areas: water re-use and recycling; clean coal technology; chlorofluorocarbon countermeasures; 3R (Reduce, Reuse and Recycle); and environmental chemistry. Within those, NEDO is making extra efforts in the area of water re-use and recycling.

Regional disparities of global water resources are high and the absolute amount is limited; water resources available for human use are not more than 0.01% of the water available on earth. The global water business market is massive, reported to be approximately 36 trillion yen in 2007. With population growth, economic development, and industrialization on a global scale, the water supply and demand is forecasted to become even tighter and the water business market is projected to become worth roughly 87 trillion yen by 2025.

2014 no.54

Among those projects, there was great interest in the UAE small-scale decentralized water re-use and recycling project using Japanese membrane technology, and many observers visited. Water treatment systems were installed as individual units in scattered industrial complexes and labor camps to reuse wastewater produced by each site. Although the project ended last year, it is still currently operating and has received good reviews within the region. This system is also being introduced to neighboring countries.

In addition, we are undertaking an extremely revolutionary

project in Australia with a system designed to use rain water as drinking water. This is the first trial of its kind in the world and is in the process of preparing guidelines. NEDO believes that this system will spread to many other countries once it is completed.

However, depending on the system, there is the issue of high cost, and there need to be efforts to see whether costs can be further lowered to meet the needs of the region. In this way we can prevail in competition with the European “water majors.” Since the water business will be expanding even further on a global scale in the future, there should be ample opportunities. NEDO will also take on not only fresh water from industrial and household wastewater but also new types of water.

Powerful water businesses are the European companies referred to as “water majors.” They offer comprehensive services from start to finish, from system design, construction, and management to operations independently. On the other hand, Japanese companies mainly have individual orders for materials, parts, or machine deliveries, system design or construction but cannot offer comprehensive services. This is because there exist a number of companies in each area, but they do not have the know-how to run comprehensive services, as the management and operations that account for more than half of the water business market is conducted by local governments. However, in order to develop water business overseas, Japanese companies need to have capabilities to make proposals based on partner country’s needs as well as to comprehensively coordinate and manage all the equipment and systems required for each process from the water source to the faucet.

Due to rapid urbanization and chronic shortages of water and wastewater facilities, the need to reuse treated water is growing in the newly emerging regions including the Middle East. Through a Water-Saving Recycling System project, NEDO will install systems that use individual unit-type membrane biological reactors (MBR) and reverse osmosis (RO) in industrial complexes to recycle wastewater for reuse as water for industrial and other use.Implementation period: FY2009-FY2013Partner: UAE RAK Emirate Investment Authority

NEDO and Toyota Tsusho Corporation implemented a large-scale integrated automobile recycling system demonstration project (from FY2011 to FY2013) in Beijing. This is unprecedented as a single factory project both in Japan and China.

This system was developed as a total recycling system, including pretreatment, hazardous substance treatment such as destruction of fluorocarbons, cutting up vehicles and crushing waste tires. It successfully reduced impact on the environment, while dismantling over 10,000 vehicles per year with approximately 90% recycling rate*, which is higher than that of Japan.

This processing capability corresponds to approximately 13% of the end-of-life vehicles dismantled or recycled in Beijing. This project made it possible for Toyota Tsusho Corporation to become the first Japanese corporation to enter Chinese automobile disassembly recycling market. It is expected to lead to the expansion of Japanese automobile recycling technologies in the future.

This project was implemented with cooperation from a regional partner company, the Beijing Borui Liantong Auto Recycling Tech Co., Ltd. under the collaboration between NEDO and the National Development and Reform Commission.

* Recycling rate refer to the the proportion of weight to be reused as parts and raw materials of the total weight of end-of-life vehicles.

Building a High-efficiency Automobile Recycling System in Beijing, China

Case project #1Demonstration Project on Water-Saving Recycling System in Overseas Emerging Regions including the Middle East

Column

1. Waste liquid recovery process. 2. Car dismantling process with cutting device. 3. Crushing process for waste tires.

United Arab Emirates (UAE)

1

2 3

Japanese “Weakness” in Water-related IndustriesWater Business Value Chain

(Units: 100 million yen)

Source: METI International Development Strategy “Topics and concrete measures and topics geared toward international development of water business.”

60%

20%

80%

40%

100%

0%

(O&M period)35 years

Industrial complexwastewater

treatment project A


Sewage project B


Sewage project C

(PPP)

Japanese “Strengths” in Water-related Industries• High technological prowess in fundamental technologiesStrengths in areas such as materials and parts supply

(Based on 2008FY amounts)

Source: Fuji Keizai Management Co., Ltd.: “Future market outlook and conditions related to water resources in 2009”

Japanese business share of reverse osmosis membrane (RO) and nano-filtration membrane (NF) market

Dow Chemical39.1%

Nitto Denko Corporation/Hydranautics27.0%

Other Companies 9.0%

TorayIndustries, Inc.16.2%

ToyoboCo., Ltd. 5.3%

Woongjin Chemical 3.5%

96.00

Operations and management

services (O&M)

Equipment

Design, construction, and others

27.95 443.73

301.68

186.19

22.16

7.305.35

21.35

Regions with Demonstration Projects• Development of water re-use and recycling systems

using element technology• Demonstration research in regions with projected water

market expansionStrengthened global competitiveness

OmanKitakyushu and Shunan

China

VietnamUAE

SingaporeAustralia

Saudi Arabia

The water business market has been dominated by European Companies.NEDO is venturing into this market with a water circulation system using Japanese membrane technology. Results have already been achieved in the UAE and NEDO is also seeing results in neighboring countries. While supporting further technology development and cost reduction in water circulation system as well as contributing to resolving global water issues, NEDO will support Japanese companies’ progress in entering the global water business market.

Opening up the Expanding Water Business Market through Proposals for Water Treatment Systems that Account for Local Needs


Environmental Department

Koichi EguchiDirectorNEDO Environment DepartmentHe joined NEDO in 1986. After serving as Chief representative of NEDO Representative Office in Bangkok, he began his current position in 2012. His goal is for the world is, “Talk with Japan if there are issues with water.”

10 112014 no.54

Hiroyuki HatadaChief RepresentativeNEDO Representative Office in Washington DC

Go TakizawaChief RepresentativeNEDO Representative Office in Silicon Valley

NEDO Chairman Furukawa and the then ARPA-E Director Cheryl Martin.

The Fourth EU-US-Japan Trilateral Conference on Critical Materials. Approximately 70 participants, including government officials and experts, met to discuss recycling and more efficient use of critical materials, and research and development on material and technology substitutes.

Signing a Letter of Intent (LOI) between NEDO and the State of California agreeing to implement a feasibility study (FS) for an expanded range of operation EV (electric vehicle) demonstration project in a northern California metropolitan region.

Chairman Furukawa and Professor Henry Chesbrough

Solar car workshop hosted by the office.

Federal government agencies and a host of think tanks are based in Washington, D.C. Here, policy discussions take place on a regular basis, and environment and energy policy and innovation policy are among the important issues. This is an ideal place to get a sense of what societal trends are in these areas and what are needed from technology.

One of the typical activities that the Representative Office in Washington, D.C. engages in is gathering information. We investigate issues and topics from the systemic aspects to the actual conditions, examining the EPA’s regulatory trends, conducting interviews with representatives from DARPA (Defense Advanced Research Projects Agency) — an agency famous for innovation — and conducting research on companies such as retailers in the electricity market following deregulation. In addition, building relationships with organizations is important. For this reason, Chairman Furukawa met with the top officials of ARPA-E (Advanced Research Projects Agency-Energy, US Department of Energy) and the Representative Office in Washington, D.C. led Japanese companies on site visits to national laboratories and universities. We not

only participated in the Fourth EU-US-Japan Trilateral Conference on Critical Materials in September 2014 to discuss future trends in research and development, but also have been making efforts to convey information about Japanese technology and raise the visibility of NEDO by participating as speakers in seminars around the US and hosting family-oriented events such as the solar car workshop. The English version of “Focus NEDO” was also begun at the suggestion of this office.

In Washington, D.C. and the eastern part of the United States, Japan is viewed as a competitor, but also is recognized as an important, trusted partner that has a high level of technology. Experts have been impressed with Japanese robotic technology and we have heard interest in cooperation with Japan on coal-fired power plants. On the other hand, the reality is that it is not easy to progress to concrete dialogue about cooperation. This office will continue to support the efforts necessary to overcome differences in language and culture and advance mutually beneficial cooperation through continuous efforts such as the dissemination of information on general and specific issues of interest to both countries.

The State of California, where the Silicon Valley Office is located, has a nominal GDP of 2.3 trillion dollars. This would rank it as 7th among world countries, surpassing Brazil, Russia and India in scale. With the power of this market behind it, California is setting bold policy goals that will help lead the world in the fields of energy and the environment. For example, California has a goal of reducing greenhouse gas emissions to 1990 levels by 2020. For this reason, the state government has set ambitious quantitative targets: by 2020, 33% of energy produced in California will come from renewable energy (excluding large-scale hydropower) and they are targeting to reach 50% by 2030; large utility companies are required to install a total of 1.325GW of storage battery capacity by 2020, in order to stabilize the grid; and, 1.5 million ZEVs (zero emission vehicles) such as EVs (electric vehicles) and fuel cell vehicles will be introduced by 2025.

Using the government-defined market created by California’s progressive policies as leverage, the Representative Office in Silicon Valley is working to create specific projects related to EV charging infrastructure and utility scale energy storage, in order to demonstrate the value of energy and environmental technologies that Japanese companies possess and to spread the technologies in the US. The office has had many conversations with the California government (including the Governor’s office, California Public Utilities Commission, and California Energy Commission) as well as the utility industry to launch new projects.

After Hurricane Sandy struck the east coast in 2012, there has been the fresh realization of the value of smart grid technology as strong infrastructure in a national emergency in the US. Currently, NEDO has been conducting several smart grid technology demonstration projects in the US in the hopes of bringing the Japanese technology to the US market. The projects are conducted in New Mexico (Los Alamos County and Albuquerque), which experiences over 300 days of sunlight per year, as well as in Hawaii (Maui), which is progressing rapidly with the development of renewable energy such as wind power and other sources, taking advantage of favorable conditions in the western region of the US.

In addition, embracing the geographical proximity to Silicon Valley, which is known as an unparalleled center of innovation in the world, the Silicon Valley Office is working on the practice of innovation policy. For example,

they held the “Japan SV Open Innovation Forum” with the prominent UC Berkeley professor Henry Chesbrough who coined the term “Open Innovation”, attended by many people from the top levels of management of Japanese companies.

Understanding Local Needs and Responding to High Expectations for and Trust in Japan

Creating a Playing Field for Japanese Companies in One of the World’s Largest Markets

［Featured Article］NEDO’s

Overseas Projects


U.S.A.


Overseas Projects


U.S.A.

12 132014 no.54

Efficient incineration of urban trash is possible through the next generation stoker-fired furnace using a high temperature, high pressure boiler.

Bangkok, a city with remarkable economic development. The Siam Train Station (center of the picture)is located in the centraldowntown.

NEDO and National Innovation Agency (NIA), Ministry of Science and Technology of Thailand, completed a bioethanol manufacturing plant in Thailand through a joint project. Test operation began on April 22, 2014.

Urban waste high-efficiency energy recovery demonstration project being implemented in Hohhot City in Inner Mongolia, China. It is the northernmost large-scale stoker-fired furnace constructed in China.

The total population of ASEAN is 600 million, surpassing the EU population of 500 million, and with an average age of just under 30 years old, not only is future manufacturing and consumer population projected to increase dramatically, but its promising market with high economic growth rate of 4-8% is gaining attention. Although many companies have entered ASEAN just to establish manufacturing bases, the entry of companies targeting this region’s consumer market has also been noteworthy recently.

However, giving that there are possible policy shifts and risk of exchange rate fluctuations and that many countries have interest rate policies of over 5%, we need to be aware that local companies and investors are very concerned about the number of years required for investment recovery. Specifically, in most cases of facility installation, investment recovery period is set at three years. Therefore, lowering overall cost is essential.

Considering those aspects of market

circumstances in ASEAN countries, NEDO, which has the mission of contribution for protecting global environment and improvement of industrial level in the world, will pay effort for dissemination of the developed technologies by modification and/or localization of them reflecting local customers' real needs, requests and collaboration between Japanese enterprises and local enterprises for achieving growths on both sides under the corroborative projects with national government.

Our projects take advantage of the special characteristics of each country. For example, in Thailand we are conducting a project to manufacture ethanol from biomass. We are also managing a demonstration project for smart communities in industrial parks in Indonesia, and an industrial waste power generation project in Vietnam and so on.

In the latter half of the 1970s, open policy reforms were introduced in China, and China has been transitioning from the traditional planned economy to a “socialist market economy with Chinese characteristics”. While incorporating capitalist economic elements, societal, economic and political goals are compiled into a five-year plan and specific policies are planned to achieve them. In the current 12th cycle of 5 year plans, energy conservation and environmental protection are strongly emphasized and this plan has been followed by the so-called Xi Jinping regime which was set up in the fall of 2012.

Over nearly 20 years NEDO has been conducting international demonstration projects in China related to topics such as energy conservation, new energy, environmental protection, and clean coal, advancing demonstrations of benefits of Japanese technology and equipment in the Chinese market. As a result, approximately 300 units that are results of successful demonstration projects by NEDO have been installed in China, contributing to a reduction

of roughly 7 million kiloliters per year of crude oil consumption while helping Japanese companies enter the Chinese market. In China, the influence of politics cannot be avoided even within economic activity. Although this leads to the unique difficulty of Chinese projects, we take advantage of the fact that the Chinese government participates in NEDO projects and we focus on making smooth progress with projects and diffusion of results while conducting projects.

In China, Japanese products are considered highly trustworthy and Japanese brands are associated with safety and reliability. Japanese technology is also generally recognized as being sophisticated. Especially, technologies related to environmental protection and the smart grid are viewed as being advanced in the world. For this reason, NEDO believes that it is NEDO’s role to, through NEDO projects, help popularize Japanese technology and products in the Chinese market, a market that is one of the world’s biggest that leads the global economy, and to expand its impact not only on the Chinese market, but also on other emerging market.

Exterior view of incinerator facility.

Eiji TanakaChief RepresentativeNEDO Representative Office in Beijing

Expanding Technology and Products in the Chinese Market to Gain a Foothold in Emerging Markets


Overseas Projects


ChinaShinichi IshiiChief RepresentativeNEDO Representative Office in Bangkok

Promoting Joint Projects with Foreign Governments in Promising Markets that Are Gaining the World’s Attention


Overseas Projects


Thailand

14 15

Lamp lighting ceremony as part of a commemorative event.

Staff of the Representative Office in New Delhi

2014 no.54

Demonstration in Malága, Spain using Japanese-made electric vehicles and quick-chargers.

Inauguration ceremony for the power generating facility at the RINL Vizag Steel Plant. High temperature gas discharged from the sintering facility is recovered and converted to steam that produces electricity. This facility can generate roughly 6% of the electricity used by the same steel plant (280MW).

Demonstration in Germany agreed in October 2013 for international research, development and demonstration project on lifestyle support system. The HAL®, the wearable robot for labor, certified to use the CE marking to permit sale and distribution as a medical device in Europe.

Japan when thinking about innovation with the involvement of a variety of players from industry, academia and government.

Recently there is increasing emphasis on demonstration projects in the fields of smart communities and robotics. Demonstration projects have begun in the area of smart communities in France, Spain, and England, as well as in the area of robotics in Germany and Denmark. Europe has positioned smart communities and smart cities as strategically important fields, as it is facing new challenges related to the deregulation of the energy market as well as the large-scale introduction of renewable energy due to FIT.

Due to deregulated energy markets and new types of environmental regulations, the business environment in Europe is very different from Japan. Although the societies have matured, innovative technology and business models have emerged in response to this environment. Furthermore, through a grant mechanism known as the Framework Program, as well as the new program called “horizon 2020”, the European Commission strongly encourage member state countries to further accelerate research and development activities, and there is large-scale, long-term support to promote innovation. This trend in Europe could be an excellent model for

Since the local governments in Europe, which are achieved the decentralization of authority, there are a variety of efforts according to each region’s characteristics. NEDO is aiming to build business models for smart building, electric vehicle infrastructure and technology for the aggregation of small-scale electric power, with integrating Japan’s excellent energy-saving, grid control technology and local businesses’ technologies by working together with these progressive local governments.

In addition, aging society is also another challenge in Europe. Japanese robotic technology has been taking the attention in welfare and medical care areas. In Germany and Denmark, NEDO has collaborated with local hospitals and facilities that are actively introducing advanced technologies. Japanese companies will also learn through experience in business environment in European market and collaboration with European companies toward advancing the growth. It will be more important that NEDO is responsible to build partnerships between Europe and Japan developing mutual strengths.

On May 26, 2014, Narendra Modi, a man with high expectations from the people, became Prime Minister. After Prime Minister Modi took office, there have been growing expectations in India toward further Japan-India cooperation. India anticipates cooperation from Japan in a range of areas such as energy, which NEDO has been already engaged in, and manufacturing.

With the goal of building footholds for Japanese business to progress in the India, a market that is expected to expand even more in the future, the Representative Office in New Delhi is promoting joint Japanese-Indian demonstration projects aimed at introducing Japanese technologies in India. In order to progress smoothly with projects when dealing with bureaucratic Indian agencies that are generally slow-moving, it is very important to work in partnership with the Indian government, and we are therefore conducting project design and promotion in harmony with Indian policy.

For example, India’s electricity demand greatly exceeds its supply and power outages

are common. Only 70% of the population have access to electricity because of inadequate electrification. Therefore, with many issues in the field of energy, the Indian government realizes that the key to realizing economic growth will be a stable supply of electricity and views this as an important policy objective. Within this environment, NEDO is working cooperatively with the Indian government and businesses to contribute to solving issues related to Indian energy through various efforts including implementing energy management systems that use solar generators and lithium batteries for telecom tower base stations, introducing power generating systems based on exhaust heat from steel plants, and introducing micro-grid systems for rural electrification in India.

Conceptual drawing of a positive energy building (PEB) in Lyon, France. © Cril Thomas and Kengo Kuma & Associates

Tetsuya TanakaChief RepresentativeNEDO Representative Office in New Delhi

Paving the Way in Cooperation with Japanese Companies in a Vast Market where Chaos and Possibilities Co-exist


Overseas Projects


IndiaKeiichi YumotoChief Representative NEDO Representative Office in Europe

Multifaceted Capitalization of Japanese Technology in a Changing Society Looking to the Future


Overseas Projects


Europe

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August 2015

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