Thursday, 25 November 2010

Japan warming up to solar power exports

Japan warming up to solar power exports - Asahi Shimbun

A scorching desert in Tunisia provides a site that symbolizes the end of the "cold shoulder" treatment the Japanese government has given to Japan's solar thermal power industry.

Japanese companies next month will start surveying the area in the North African desert for a project to jointly build a solar thermal power generation plant with the Tunisian government.

But it was the Ministry of Economy, Trade and Industry that obtained the order for the project.

After three decades of not supporting Japan's solar thermal power generation industry, the Japanese government is pushing sales of the country's solar thermal power technology to other nations.

Tadahiro Matsushita, senior vice minister of economy, trade and industry, visited an experiment plant for solar thermal power generation in the United Arab Emirates in January.

The plant was built by Mitsui Engineering & Shipbuilding Co.

"We want to spread these Japanese technologies more," Matsushita said, as he watched experiments being conducted at the site.

A UAE government organization and Japan's Cosmo Oil Co. paid 1 billion yen ($12 million) needed for the experiments.

"We had repeatedly asked the Japanese government for support, but the government gave us the cold shoulder," said Yutaka Tamaura, a Tokyo Institute of Technology professor involved in the joint experiments.

In the 1980s, the Japanese government and the private sector joined hands under a "sunshine plan" and developed solar thermal power generation technology.

However, the government's support in this area stopped for about 30 years due to a lack of efficiency in power generation and expectations that the technology would not spread due to a lack of enough sunshine in Japan.

The situation changed when the government led by the Democratic Party of Japan decided that exporting infrastructure, such as nuclear power plants, high-speed railways and water supply and sewerage systems, would be a pillar in its growth strategy.

Solar thermal power generation plants re-entered the equation.

Demand for solar thermal power generation has rapidly increased in deserts, but promising markets in the Middle East and North Africa are already dominated by European businesses, which are closer to those areas. Japan has been desperately trying to catch up.

After senior trade ministry officials toured Egypt, Morocco and Tunisia in efforts to sell Japanese solar thermal power technology, Tokyo reached an agreement with the Tunisian government in July to start the joint solar thermal power generation project.

The Japanese government will pay up to 3 billion yen to Japanese companies building the plant.

"The government made a complete about-face in its stance," Kazuaki Ezawa, a Mitsui Engineering & Shipbuilding official said.

Ezawa welcomed the policy shift as a major advantage for Japanese companies seeking future orders for building plants.

But Japan is not the only government stepping up efforts to help the private sector win contracts abroad.

Japan upgraded its efforts after the UAE late last year awarded a contract to build nuclear power plants to South Korean companies that had received direct help from President Lee Myung-bak and the government-run Korea Electric Power Corp.

Several major Japanese companies teamed up with Innovation Network Corp. of Japan to establish International Nuclear Energy Development of Japan Co. The arrangement created an "all-Japan" team trying to win an order to build two nuclear power plants in Vietnam.

A number of Cabinet ministers also cooperated, and Japan won the order for the 1-trillion-yen project.

But concerns have arisen that if the government becomes too deeply involved in private-sector business, the conditions of the deals could become unclear.

To win the contract in Vietnam, the Japanese government pledged additional yen loans worth 79 billion yen. Depending on future negotiations with Vietnam, the government or the Japanese companies may have to cover additional costs.

"The government's assistance is very powerful for making an initial breakthrough," said Hideaki Omiya, president of Mitsubishi Heavy Industries. "However, we are being asked to climb a mountain together without being able to really see the whole mountain yet."

Omiya said if competition among governments escalates, it could go beyond a scope of what can be considered proper private-sector activities.

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