Sept. 5 (Bloomberg) -- Japan is primed following the 2011 Fukushima earthquake and tsunami to adopt more power supply devices that can withstand disasters and complement services provided by utilities, Bloom Energy Japan Ltd. said.
Japan’s fuel cell market is currently led by individual users with small systems in their homes. Bloom Energy Japan is targeting larger power consumers such as office buildings, factories and data centers, Shigeki Miwa, chief executive officer of the company, said Sept. 2 in an interview in Tokyo.
“Utilities in the centralized power distribution system will remain the main player,” he said. “But people have realized that is not enough. So it is good to have decentralized power distribution that can complement the system.”
Bloom Energy Japan, a venture between SoftBank Corp., Japan’s third-largest mobile carrier, and Bloom Energy Corp. of the U.S., was formed in July to supply power from Bloom’s fuel cells to customers in Japan.
Bloom’s units generate electricity from gas without burning the fuel, a more efficient process that produces fewer carbon emissions, according to its website. Fuel cells cut the risk of blackouts such as those that occurred in Japan after the Fukushima accident because they aren’t dependent on centralized power plants.
Local governments are potential users, Miwa said.
“Local officials clearly recognize the need for secure supply,” he said. “They tell us disaster response centers need to be operational in the event of large-scale disasters and they need backup power as relying on local utilities is not enough.”
Industrial, Commercial Use
Japan’s market for industrial and commercial users is about to take off, he said.
“Manufacturers are now pushing for large-size systems,” he said. “Distributed power generation will become useful and that’s where we want to be.”
Masayoshi Son, the billionaire founder of SoftBank, has become a proponent of clean energy following the 2011 Fukushima nuclear disaster through investments in wind and solar projects.
The global fuel cell market for commercial and industrial use will expand to 734.1 billion yen ($7.4 billion) by fiscal 2025 from 35.9 billion yen in fiscal 2011, according to Fuji Keizai, a market researcher.
“Current demand is concentrated in North America where users receive generous subsidies for installations and South Korea where generating power from fuel cells is part of government policy,” it said in a report in March.
Fuji Electric Co. since 1998 has supplied 43 units for industry, including several for Germany and the U.S., the company said by e-mail. Fuji’s system has 100 kilowatts of capacity each.
Mitsubishi Heavy Industries Ltd. is developing fuel cells with a goal to commercialize a 250-kilowatt unit in fiscal 2014 and plans to develop units with larger capacity, according to company officials.
Bloom’s customers in the U.S. include Wal-Mart Stores Inc., AT&T Inc., and Google Inc., according to a joint statement in July.
A challenge for the venture, which is equally split between the two partners, will be to secure customers who have access to fuel at low cost, Ali Izadi-Najafabadi, an analyst for Bloomberg New Energy Finance said.
“Data centers in the U.S. rely on Bloom’s fuel cells because in some places the fuel cells can produce electricity cheaper than the grid due to the low natural gas price and federal and state incentives,” he said.
Miwa said power generation may become more decentralized just like large-size computers evolved into personal computers and tablets.
“The same analogy could apply to large-size, centralized power distribution into distributed power generation, and that’s something we are aiming at,” he said.
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