Eurasian Forum

1. Eurasian Forum September 7th, 2017 Akihiko Miyamoto President of NEDO

2. Self-sufficiency • Japan’ self-sufficiency ratio in the primary energy supply is quite low: the second lowest in 34 OECD countries after Luxembourg. After the Great East Japan Earthquake that occurred in 2011, all nuclear power plants stopped operating. As a result, imports of natural gas as an alternative of nuclear power increased. From that, self-sufficiency decreased to 6.2%, far less than 19.9%, which was recorded in 2010 before the disaster. Primary Energy Self-Sufficiency Rate of OECD Countries(2013) Natural Gas 1st Norway Hydro-Power Oil 2ndAustralia ２６６．３％ Coal Renewable Energy, etc. （geothermal, solaretc.） １７１．８％ 3rdCanada 　・・・ Nuclear Power ８６．０％ 9thU.S.A. ※IEAincludes nuclear power in the first primary energy self-sufficiency rate. 　・・・ ５７．７％ 14thU.K. 　・・・ ５３．８％ 16thFrance 　・・・ ３７．９％ 22thGermany 　・・・ 33thJapan ６．２％ *IEA regards nuclear power as domestic energy and includes it in primary energy self-sufficiency. The Strategic Energy Plan of Japan regards nuclear power as semi-domestic energy. 34thLuxembourg ３．５％ 【Source】IEA “Energy Balance of OECD Countries 2015”

3. Japan’s Energy Supply Structure • Followed by the Oil crisis, Japan had expanded nuclear power generation while strengtheningenergy conservation efforts. These measures contributed to lower dependence on oil in Japan. • After the Great East Japan Earthquake, all the nuclear power plantsstopped operation,consequently, dependence on oil slightly rised again. 4%* Japan’s Primary Energy Source 3% 0.4% 24% 25% 43% Source: Prepared based on “Comprehensive Energy Statistics (Preliminary Report for 2012)” issued by the Agency for Natural Resources and Energy.”

4. Impactof1973 OilCrisis • In response to the beginning of the Arab-Israeli war, some Arab countries proclaimed an oil embargo to US, UK, Japan and other countries, globally making the oil price rising high, and seriously damaging many economies. • Japan is one of the most severely influenced by oil crisis among the other industrialized economies, due to its heavy dependence of imported oil from the Gulf countries. Source確認のこと ％ Annual GDP Growth Rate around Oil Crisis 1973 1974 US 5.9 -2.1 UK 5.3 1.0 Germany 5.1 0.4 France 6.5 3.9 Italy 6.3 3.4 Japan 10.2 -1.9 Sharp Decline

5. Struggle for Energy Efficiency • In response to Oil Crisis, the Japanese government enacted “the EnergyConservationAct" and urged the industry to stick to energy conservation, specifically 1) obligated manufacturing plants and transport firms to make efforts in compliance with standards set by the government, 2) obligated clients of buildings and houses to make efforts in compliance with standards set by the government (construction is not allowed if efforts are not sufficient), 3) established “Top Runner program” applied to household appliances and automobiles. 　 ◆ Obligation for transport firms to make efforts in compliance with the standards ◆ Obligation for business operators to make efforts in compliance with the standards (2) Transport Firms (1) Manufacturing Plants (3) Buildings and Houses (4) Household Appliances and Automobiles ◆ Obligation for construction clients and owners to make efforts in compliance with the standards ◆ The Top Runner Program is applied to automobiles, air conditioners, TV sets, etc.,31 items, which comprise about 70% of household energy consumption.) Source:METIOfficialHomepage • In addition, the government launched a large-scale energy-saving technology development project called the “Moonlight Plan”. Technologies on power generation by fuel cell and waste heat utilization, highly efficient gas turbine for power plants, and etc. were developed.

6. Top Runner Program • The “Top Runner Program” is a mandatory program for companies (manufacturers and importers), to fulfill the efficiency targets within 3 to 10 years. The efficiency targets are set in reference to the energy efficiency of the most efficient products in the market. • The program has contributed to improving energy efficiency of consumer electronics and automobiles in Japan. • The Government had expected energy efficiency improvements of16.0km/L for medium class gasoline passenger vehicles in fiscal year 1999, but actually, it attained 19.9km/L. Achievement of Top Runner Program Gasoline passenger vehicles 74.4％(FY1996→FY2012) Refrigerators 43.0％(FY2005→FY2010) Air-conditioners (Types other than direct airflow & wall-mount) 32.3％ (FY1997→FY2007) TV sets(LCD and PDP TVs) 29.6％(FY2004→FY2008) Source:METIOfficialHomepage

7. Achievements • As the result of positive actions by both private and public sectors, Japanhas improved energy efficiency and conservation by approx.40% after the oil crises in the 1970s. • Japan achieved the lowest level of energy consumption per GDP in the world. Primary energy supply per GDP unit （2013） Primary energyuse per real GDP of Japan （Oil converted Mt /1 trillion yen） （Index : Japan=1.0） Approx.40% improvement Source）Total Energy Statistics by ANRE/METI Calculated according to IEA statistics

8. Efficacy of Energy Efficiency • Considerable difference exists in energy efficiency between OECD countries and non-OECD countries. Huge possibility of improvement in energy efficiency, remains in non-OECD countries. • Despite the growth of the world economy, CO2 emissions in the world have shifted to minus in 2015. The fact thatenergy saving took the lead, shows that energy efficiency is a valuable measure against global warming. Primary energy supply per GDP unit of each country（2013） （Index : Japan=1.0） Calculated according to IEA statistics

9. Cooperation for Energy Efficiency • Although there remains much room for the improvement of energy efficiency in non-OECD countries, efficiency improvement has been much slower than OECD countries. • It is necessary to promote the spread of technologies to enhance energy efficiency in non-OECD countriesthrough international cooperation. • NEDO has conducted many demonstration projects to introduce energy efficiency technologies in non-OECD countries. Reduction in energy intensity accelerates with higher income levels Source: IEA, World Energy Outlook 2016

10. Bio Jet Fuelderived from microalgae • Fuel consumption and CO2 emission have steadily increasedas air transport in the world increases. Electricity cannot be used as a source of power due to the nature of aircraft. Jet fuel generation technology derived from carbon neutral microalgae has attracted attention. • NEDO project has establisheda large pool foralgae in Thailand and will conducttechnology development to establish the integrated production process for commercialization aimed around 2030. • NEDO is selecting growth environments and conditions of microalgae, striving to reduce the cost of algae breedingprocess. microalgae Appearance of 1500 m² outdoor large-scale incubator constructed in southern part of Japan

11. NEDO International Demonstration Project Demonstration Project Scheme The purpose of NEDO’s demonstration projects is to demonstrate the effectiveness of clean energies and environmental technologies of Japan through the introduction of such technologies into overseas countries. Scheme Fundamental Research Follow-up Activities for Dissemination Feasibility Studies (F/S) Demonstration Projects Technology Dissemination Costs are shared between Japan and the host country

12. NEDO International Demonstration Project Contractual Framework Japan Host country Memorandum of Understanding (MOU) Government Financial and Other Support Instructions Implementation site firm Entrusted private company Implementation Document (ID)

13. Demonstration of Cogeneration Systems in Uzbekistan • Electricity supplied to a small city or town in remote area, is usually transmitted from large-scaled power plant located so far away that considerable transmission loss is inevitable. • In order to avoid transmission loss, small-sized power plant with gas turbine cogeneration system, is built and distribute electricity over 8000 households in the vicinity. • A cogeneration system realizes supply of electricity as well as heat. It attains approximately 40% energy saving compared with the conventional system by collecting exhaust heat after generating power with gas turbine and using it as steam or warm water. Demonstration in Fergana, Uzbekistan

14. Coke Dry Quenching (CDQ) in steel plants • In steel plants, coke is necessarily used to deoxidize iron ore which is iron oxide. Coke is produced by steaming coal at high temperature, dry distillation process, and then cooled down by water to the temperature that allows use. • Coke Dry Quenching is a kind of technology in this cooling process. Inert gas used instead of water, recovers heat and uses the heat for power generation. • CDQ has attracted a lot of attention due to its efficient energy recovery and ability to reduce pollution from coke cooling process. • The steel industry emits more CO2 than any other industry, so that introduction of energy conserving technology is extremely effective. • NEDO had conducted demonstration projects of this technology in China and India.

15. Operate LSEV as “Train without Rail” Mobility as a System in the Philippines (Low Speed EV) • In the Philippines, gasoline motorcycle taxis are widely used as a short distance transportation means in cities. • This NEDO project currently ongoing, is to reduce environmental footprint by replacing gasoline motorcycles with electric vehicles in the city of Manila, managing 50 vehicles by cloud computing, and making whole the vehicles a kind of public transportation system in which the vehicles run at constant time intervals. • Unlike railroads and subways, this system does not require a large-scale construction work. Public transportation services can be easily and promptly introduced into the city. ① Getting on and off only at EV stops Smart Mobility Operation Cloud EVStop LSEV ② Keeping same intervals SoftBank’s cloud server Charging Infra Service Platform Charging Station ■　Utilizing LSEV and dynamic operation management system, energy consumption is reduced 85%. Fare Collection Revenue Accounting Charging Station, Authentication ■　Easy and fast to start mass transit service since MaaS is a cloud based technology and LSEV doesn’t require heavy construction unlike train. Barcode Ticket Service Route SVC DemonstrationofVehicle Transforming Technology (“VTT”) is the next milestone of enhancement of MaaS. VTT enables LSEV to play multiple roles like train, bus and taxi by attaching and separating from each units. In separate mode, LSEV covers both needs, regular service and on-demand service. Mobile Network (3G/4G) Positioning, Vehicle Allocation, Operation control Asset Management Telematics Communication Equipment Activate On Board Device Smartphone PackeTInfra RevenueAccounting ③Adjust the number of LSEV corresponding to charging schedule and supply/demand balance Clearance Slow Down LSEV Power Charger CRM

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