The post-Fukushima shutdown of Japan’s nuclear reactors and subsequent demand for energy self-sufficiency due to costly fuel imports – coupled with the Japanese government’s ambitious emissions reduction targets for 2020 – have stimulated growth in new renewable energy sources in the country. A new Frost & Sullivan whitepaper highlights the future role that low-temperature geothermal power could play in Japan’s energy mix to drive such a transformation.

 

Renewable power currently accounts for approximately 15 per cent of total electricity generation in Japan, while hydro and solar power occupy a combined 12 per cent share, aided by attractive government subsidies for these technologies.

 

Although the government has been proactive in recent initiatives to identify and promote potential areas for exploration and development of geothermal power, there has not been any significant development of the technology in the country in the last decade.

 

In fact, the new whitepaper by Frost & Sullivan underlines that geothermal power currently contributes a meagre 0.3 per cent to total electricity generation, despite the country possessing the third largest geothermal resource in the world – one represnting a power generation potential of 23GW.

 

While development of the technology at medium and high temperatures is characterised by stagnation, increased investment and technological innovation targeting low-temperature geothermal power (<120°C) – historically used primarily for heating purposes – are expected to significantly increase the addressable market potential for the power source.

 

A “potential game-changer”

 

Commenting on this new growth market, Ross Bruton, Programme Manager & Principal for Smart Energy Systems at Frost & Sullivan, emphasised that harnessing the potential offered by low-temperature geothermal power will help achieve Japan’s power security and emission reduction goals.

 

The advent of technological innovations is significantly increasing system performance and cost efficiencies at low temperatures, which is set to boost uptake levels, he said. “Additional drivers include multi-application benefits for hot spring (onsen) owners, attractive feed-in-tariffs and grant financing offered by government, relaxation of development restrictions in national parks, and a lack of environmental assessment requirements for small scale geothermal power,” Mr Bruton advised. “These drivers, combined with improved co-operation at the community level, are expected to set up low-temperature geothermal power as a potential game-changer in the exploitation of the country’s geothermal potential, and marks a contributory step towards the establishment of a stable, low-emission power industry in Japan,” he added.

 

From crisis springs opportunity

 

Japan’s domestic energy crisis is opening up interesting opportunities for foreign companies to contribute to the national geothermal portfolio. However, such firms will need to compete against well-established alternative technologies, such as solar photovoltaic, to gain a foothold in the market.

 

Utham Ganesh, Research Analyst at Frost & Sullivan, points out that: “Building strong local and community relations represents a key success criterion for project development, due to the strong cultural values attached to hot springs in the country and the resistance shown for fear of environmental impact.”

 

For further insights into the potential of low-temperature geothermal energy in Japan, read the full whitepaper here: http://www.frost.com/sublib/display-market-insight.do?id=298077804