In late 2012, the Rocky Mountain Institute’s cofounder, chairman, and chief scientist Amory Lovins spent seven weeks in Japan, China, India, Indonesia, and Singapore observing Asia’s emerging green energy revolution. In February 2013, he returned to Japan and China. Japan, China, and India—all vulnerable to climate change—turned out to be in different stages of a “shared and massive shift” to a green energy future, one with remarkable similarities to RMI’s Reinventing Fire vision for the United States.
See part two: China scales and part three: India Starts Tipping.
Largely unnoticed in the West, Asia’s energy revolution is gathering speed. It’s driven by the same economic and strategic logic that Reinventing Fire showed could profitably shift the United States from fossil-fuel-based and nuclear energy to three-times-more-efficient use and three-fourths renewables by 2050.
Renewable energy now provides one-fifth of the world’s electricity and has added about half of the world’s new generating capacity each year since 2008. Excluding big hydro dams, renewables got $250 billion in private investment in 2011 alone, adding 84 GW, according to Bloomberg New Energy Finance and ren21.net. The results were similar in 2012.
Japan Awakens
After world-leading energy efficiency gains in the 1970s, Japan’s energy kaizen stagnated. Japanese industry remains among the most efficient of 11 major industrial nations, but Japan now ranks tenth among them in industrial cogeneration and commercial building efficiency, eighth in truck efficiency, and ties with the U.S. for next-to-last in car efficiency. With such low efficiencies and very high energy prices—far higher for electricity than in a more competitive market structure, while gas prices are historically linked to oil prices—fixing these inefficiencies can be stunningly profitable. For example, retrofitting semiconductor company Rohm’s Japan head office in front of the Kyoto railway station—even without using superwindows as RMI did in the Empire State Building retrofit—saved even more energy (44 percent) with a faster payback (two years). (See related: “Beyond ‘Green’: The Empire State Building Retrofit“)
As the debate triggered by the Fukushima disaster opens up a profound public energy conversation, Japan is starting to see those tremendous buildings efficiency opportunities—and to realize that it is the richest in renewable energy (wind, solar, and marine in particular) of any major industrial country. Japan has twice the per-hectare high-quality renewable potential of North America, three times that of Europe, and nine times that of Germany. Yet Japan’s renewable share of electricity generation is one-ninth that of Germany—so its renewable power exploitation is exactly the opposite of its relative endowment!
Why such poor renewable generation and modest ambition despite such rich local resources? Answer: because Japan is in a race with Chile to be the last OECD country to establish an independent grid operator bringing supply competition and transparent pricing to the old geographic utility monopolies.
But that is changing; Japan’s once-monolithic business support for utility monopolies-cum-monopsonies (one seller, one buyer) is eroding. Important impetus came in July 2012 from a bold initiative—feed-in tariffs that promote greater renewables integration into the grid—championed by Softbank founder and now solar entrepreneur Masayoshi Son. The tariffs were set at three to four times original European levels, because the government, apparently based on 2005 foreign prices, unaccountably believed renewables cost that much in Japan, where even commodities like PV racks, cables, and junction boxes sell for about twice the world price. Some 5.2 GW of feed-in-tariff applications were approved in 2012, including 3.9 GW of non-residential solar. As prices fall, the Industry Minister is expected to start phasing down the solar feed-in tariff with a 10 percent cut this spring.
Meanwhile, though, the government changed to one more aligned with incumbent monopolists, delaying reforms. And some utilities have been exploiting a loophole that lets them unilaterally reject renewable offerings, without explanation or appeal, as risky to grid stability—so the developer gets no payment and doesn’t build.
As these internal divisions play out, the Land of the Rising Sun is getting eclipsed—making early progress despite persistent obstacles, but falling far short of its potential and others’ progress. Japan added nearly 3 GW of photovoltaics in 2012—but even less-organized Italy installed 7 GW in 2011. Similarly, Japan’s windpower association projects the same market share in 2050 that Spain achieved back in 2010.
But there are hopeful signs too. Son-san’s initiative was supported by at least 34 provincial governors. Hiroshi Mikitani, billionaire founder of the e-commerce giant Rakuten, just left the powerful traditional business forum Keidanren to form a reformist rival group. Slowly, in the subtle and complex Japanese way, business leaders’ center of gravity is shifting toward better buys and more entrepreneurial models. Real projects demonstrating renewables’ competitive advantage will speed that shift.
And if it does take hold, the world has long learned that nothing is as fast as Japanese industry taking over a sector. Nothing, that is, except its Chinese counterpart. (See related: “Why Are China and Japan Sparring Over Eight Tiny, Uninhabited Islands?“)
See part two: China scales and part three: India Starts Tipping.
This post originally appeared at the RMI Outlet and was republished with permission.
Related Topics
Go Further
Animals
- How can we protect grizzlies from their biggest threat—trains?How can we protect grizzlies from their biggest threat—trains?
- This ‘saber-toothed’ salmon wasn’t quite what we thoughtThis ‘saber-toothed’ salmon wasn’t quite what we thought
- Why this rhino-zebra friendship makes perfect senseWhy this rhino-zebra friendship makes perfect sense
- When did bioluminescence evolve? It’s older than we thought.When did bioluminescence evolve? It’s older than we thought.
- Soy, skim … spider. Are any of these technically milk?Soy, skim … spider. Are any of these technically milk?
Environment
- Are the Great Lakes the key to solving America’s emissions conundrum?Are the Great Lakes the key to solving America’s emissions conundrum?
- The world’s historic sites face climate change. Can Petra lead the way?The world’s historic sites face climate change. Can Petra lead the way?
- This pristine piece of the Amazon shows nature’s resilienceThis pristine piece of the Amazon shows nature’s resilience
- Listen to 30 years of climate change transformed into haunting musicListen to 30 years of climate change transformed into haunting music
History & Culture
- Meet the original members of the tortured poets departmentMeet the original members of the tortured poets department
- Séances at the White House? Why these first ladies turned to the occultSéances at the White House? Why these first ladies turned to the occult
- Gambling is everywhere now. When is that a problem?Gambling is everywhere now. When is that a problem?
- Beauty is pain—at least it was in 17th-century SpainBeauty is pain—at least it was in 17th-century Spain
Science
- Here's how astronomers found one of the rarest phenomenons in spaceHere's how astronomers found one of the rarest phenomenons in space
- Not an extrovert or introvert? There’s a word for that.Not an extrovert or introvert? There’s a word for that.
- NASA has a plan to clean up space junk—but is going green enough?NASA has a plan to clean up space junk—but is going green enough?
- Soy, skim … spider. Are any of these technically milk?Soy, skim … spider. Are any of these technically milk?
Travel
- Could Mexico's Chepe Express be the ultimate slow rail adventure?Could Mexico's Chepe Express be the ultimate slow rail adventure?
- What it's like to hike the Camino del Mayab in MexicoWhat it's like to hike the Camino del Mayab in Mexico