Village Power Opportunities and Challenges

1. Village Power Opportunities and Challenges 20th Meeting of the Expert Group on New and Renewable Energy Technologies November 4-6, 2002 Seoul, Korea Mr. Masatoshi Ikumi Energy Conservation and Renewable Energy Dept. Agency for Natural Resources and Energy METI Ms. Mirei Isaka International Cooperation Center NEDO 1

2. Outline 1. New and Renewable Energy Targets 2. Policies for Development and Introduction of New Energy 3. NEDO’s Role in Japan’s New Energy Scheme 4. NEDO Activities to Promote the Local Introduction of New Energy 5. International Activities by other Japanese Organizations 6. Adoption of a Programmatic Approach 7. Lessons Learned 2

3. Energy Sources FY 2000 Results FY 2010 Target on New Energy Introduction (Revised) Oil Equiv. Installed Cap. Oil Equiv. Installed Cap. 1,000 x kl MW 1,000 x kl MW Photovoltaic(Solar Power) 81 330 1,180 4,820 Solar Thermal 890 - 4,390 - Wind Power 59 144 1,340 3,000 Waste Power 1,150 1,030 5,520 4,170 Waste Thermal 45 - 140 - Biomass Generation 47 69 340 330 Biomass Thermal - - 670 - Black Liquor, Waste Wood, etc. 4,900 - 4,940 - Unused Energy(Including Cooling by Snow & Ice) 45 - 580 - New Energy Total (Ratio of total primary energy supply) 7,220 (about 1%) - 19,100 (about 3%) - Total primary energy supply (in million kl) 604 Mkl - about 602 Mkl - 1. New and Renewable Energy Targets 3

4. Fiscal year FY1997 FY1998 FY1999 FY2000 FY2001 FY2002 Budget (in 100 million \) 560 748 875 925 1,105 1,449 (in million US$) 2. Policies for Development and Introduction of New Energy ※ 448 598 700 740 884 1,159 ※US$1 ＝ \125 Ⅰ．Technological Development Ⅱ．Demonstration Test • (Budget for FY2002: • about \38.8 billion ≒ US$310 million) • Fundamental investigation • Development for practical application • (Budget for FY2002: • about \10.0 billion ≒ US$80 million) • Field test • Demonstrative research Ⅲ．Promoting Introduction (full utilization of market mechanism) • (Budget for FY2002: about \96.1 billion ≒ US$769 million) • Creation of initial demand for inducing market independency • Creation of environment suitable for introducing leading-edge new energy systems • Financial support (Tax system, Fiscal investment and Loans) • The Green Purchase Law • Enlightenment and public information activities • New market development mechanism ～RPS (Renewable Portfolio Standard) 4

5. 3. NEDO’s Role in Japan’s New Energy Scheme 5

6. 4. NEDO Activities to Promote the Local Introduction of New Energy Examples: Domestic Project for Establishing New Energy Visions at the Local Level Project for Promoting the Local Introduction of New Energy Grassroots Support Project for New Energy International Cooperative Demonstration Projects 6

7. Project for Establishing New Energy Visions at the Local Level (FY1998 ~ ) FY2002 Budget: 1.23 billion yen Objectives: To Facilitate Efforts of Local Public Entities to Ensure (1) Effective and Smooth Introduction of New Energy, and (2) Successful Diffusion, Public Education and PR Activities Subsidies for: Establishing "Visions" for New Energy Introduction at Local Level Conducting F/S on the Commercial Viability of Individual Projects Implementation Progress: 556 Locations Nationwide (as of October 2002) 7

8. Project for Promoting the Local Introduction of New Energy (FY 1998 ~ ) FY 2002 Budget: 12.70 billion yen Objectives: To Promote / Accelerate the Utilization of New Energy Subsidies for: Local Public Entities to Cover Necessary Costs for Advanced New Energy Utilization Projects that are Highly Influential on Other Local Public Entities Diffusion and Public Awareness/PR Activities Implementation Progress: Kuzumaki Town, Iwate Prefecture 8

9. Grassroots Support Project for New Energy (FY 2000 ~ ) (1) FY 2002 Budget: 1.02 billion yen • Objectives: • To Support New Energy Introduction Projects Conducted by the Private Sector, NPOs, etc. • Qualifying Projects: • Equipment Introduction Projects • Support Projects for the Introduction of Equipment • Awareness-building/PR Projects 9

10. Grassroots Support Project for New Energy (2) 10

11. International Cooperative Demonstration Project (1) “Demonstrative Research of Photovoltaic Generation System for Battery-Charging Stations” Kanchanaburi Province, Thailand: 1992-1997 Budget: 316 million yen The Sunlight made Nighttime Pleasant! Battery-Charging Station A fully charged battery provides lighting for a week 11

12. “Demonstrative Research of Photovoltaic Generation System for Battery-Charging Stations” (2) Battery-Charging Station Using a charged battery at home 12

13. 5. International Activities by other Japanese Organizations • Efforts by JICA • Programs for the provision of experts, training programs • Overseas development programs and studies (including pilot projects) • Efforts by JETRO • Global Environment / Plant Vitalization Study • Efforts by MOFA (Ministry of Foreign Affairs) • Grants-in-aid • Efforts by JBIC • Yen loan in special environmental interest rates (ODA) • Export credit and untied loan in semi-commercial interest rates (non-ODA) 13

14. 6. Adoption of a Programmatic Approach For effective cooperation and achievement of business-based diffusion, a Programmatic Approach has been adopted to target sustainable, long-term diffusion. Taking the form of a series (program) of projects, from the creation at the planning stage of a master plan, implementation of feasibility studies and validation by means of pilot projects, through to diffusion. Comprehensive schemes incorporating the education and training of personnel necessary in policy and organizational terms for submitting proposals. 14

15. Programmatic Approach Concept Accurate understanding of the counterparts’ needs, priorities, natural / economic conditions, etc. High income Urban city Economic growth, Environment Commercial Programs Grid connected Ｍａｒｋｅｔ Yen Loan Provision Status for systems (Law, Budget, Tax, Loan system, etc.) ＪＢＩＣ Close cooperation between each scheme (and building stronger partnerships with international organizations) Detailed Study (for project formation, etc.) Middle income Hybrid ＪＥＴＲＯ F/S for Diffusion For BHN, Social development Cooperative Demonstration Technical Assistance (Dispatch of experts, Training programs, Project-based technical cooperation, Seminars, etc…) ＮＥＤＯ Low income Independent systems Cooperative Research ＪＩＣＡ, etc. Rural village ＪＩＣＡ Development Study (Master Plan) LDC ＭＯＦＡ (JICA) Grants-in-Aid Solar, Wind Micro hydro Biomass Geothermal, etc. 15

16. 7. Lessons Learned Clarifying the Objective of the Electrification Project Coordination with the National Electrification Plan Strengthening Capability and Clarifying Roles and Responsibilities of each Party Constructing a Sustainable Business Model 16

17. Thank You! 17