Marubeni Targets National Park in Japan for Geothermal
Marubeni Corp (8002) (8002)., the biggest investor in electricity generation among Japan’s trading houses, is working on how to revive the geothermal industry and tap heat that powers volcanos as an alternative to nuclear reactors.
The effort would draw pools of underground heat with a potential of double the current capacity of geothermal projects operating worldwide. That would help Japan shift away from atomic reactors that provided 30 percent of the nation’s power before the accident in Fukushima two years ago.
“We’ve focused on hydro before,” Masahiro Uegaki, assistant general manager of Marubeni’s domestic power projects, said in an interview at the company’s headquarters in Tokyo. “Recently we are developing solar, wind and other renewable energies. Geothermal is one of our new activities.”
Expanding geothermal would benefit turbine makers such as Mitsubishi Heavy Industries Ltd (7011). and Toshiba Corp (6502) (6502)., both of which already supply equipment outside Japan. Marubeni’s study is possible since the government last year eased rules to allow geothermal in protected national parks, part of an effort to boost supplies of renewable energy.
Japan borders the geologically active “Ring of Fire,” with volcanos and rift zones that push pools of heat closer to the Earth’s surface. That heat gives the nation potential for an abundant supply of energy that, like nuclear power, doesn’t pollute the atmosphere.
Pressure to Develop
Pressure to develop geothermal arises from voter concern about nuclear power following the meltdown in Fukushima and an ambition to tap the same volcanic heat reserves used in thousands of hot-spring spas across Japan.
All but two of the nation’s 50 nuclear reactors remain shut for safety tests following Fukushima, which gutted stock prices of several power plant owners. Tokyo Electric Power Co., operator of the Dai-Ichi plant that suffered reactor meltdowns, lost about 60 percent in the stock market during the two weeks after the disaster began.
More than 70 percent of respondents in an opinion poll by the Asahi newspaper in February said Japan should scrap nuclear power, a stance favored by environmentalists who note geothermal does the same thing as nuclear with much less risk.
“To import a very complex and difficult technology to boil water in the world’s most seismically active country when there is such vast geothermal potential strikes me as madness,” David Suzuki, a Canadian author, environmentalist and board member of the Japan Renewable Energy Foundation, said in an interview.
Marubeni operates a Costa Rican power plant that runs off underground heat and is developing another in Indonesia. It plans to conduct a geothermal survey at the Daisetsuzan National Park on Japan’s northern island of Hokkaido as early as next month, said Uegaki, the power executive at the company.
The study of geological formations will take place in the Shiramizusawa area, about 930 kilometers (578 miles) north of Tokyo on the northernmost of Japan’s four main islands. Surveyors will work a year before officials decide whether to conduct test drilling. The next step would be to determine whether the site is suitable for a plant, which usually takes a few years.
It’s among five projects under consideration at four national parks, according to the Ministry of Economy, Trade and Industry. Idemitsu Kosan Co (5019)., a Japanese refiner, plans a drilling survey at a park in Akita prefecture in northern Japan this summer.
The projects threaten to revive conflict with hot-spring resorts, which are concerned commercial geothermal projects will siphon away the same reserves they’re tapping. Geothermal developments were largely off limits in Japan before the earthquake in March 2011 because heat reserves were set aside for the resorts.
Energy Policy Debated
“We understand geothermal is one of our energy options,” said Hirokazu Nunoyama, secretary-general of the Japan Spa Association. “But there are impacts on the environment. There are cases of hot spring resources running out or thinning, or a drop in water temperatures.”
The association, which has about 1,500 members, submitted a petition to the government last summer opposing “disorderly development” of geothermal.
Prime Minister Shinzo Abe, who took office in December, is reviewing Japan’s energy policies and plans to set out a strategy later this year after parliamentary elections due in July. He told lawmakers on Feb. 28 that he’ll restart some nuclear reactors once safety measures are in place. The previous government aimed to phase out nuclear power by the end of the 2030s.
More than 80 percent of Japan’s geothermal reserves are in national parks, according to the Geothermal Research Society of Japan. Rules set in the 1970s suspended construction of new geothermal power stations inside national parks except for six sites in operation or under construction at the time.
The country developed few geothermal projects since the mid-1990s as it turned to atomic- and gas-fired generation. Japan has 539 megawatts of geothermal capacity in operation, about half the output of a typical atomic reactor. Only 4 megawatts of that capacity was added in the last decade, according to data from the government.
About 11,228 megawatts of geothermal projects operate worldwide, according to Bloomberg New Energy Finance. Japan has the potential to produce 23,000 megawatts of power from underground heat, according to the Geothermal Energy Association in Washington D.C. It estimates only 0.2 percent of Japan’s electricity comes from the technology.
The last commercial geothermal plant in Japan was built in 1999 on Hachijo island, about 287 kilometers south of Tokyo and is operated by Tokyo Electric Power Co. (9501) Japan has 17 geothermal plants currently in operation, according to data compiled by state-affiliated Japan Oil, Gas and Metals National Corp.
To encourage renewables, Japan in July began offering incentives through feed in tariffs. Geothermal is 27.3 yen per kilowatt hour for plants with capacity of 15,000 kilowatts or larger, and 42 yen for smaller plants, both for 15 years.
“Geothermal plants are rapidly increasing in major geothermal countries abroad, and we are the only country that is not moving ahead,” Susumu Tanaka, chairman of the Japan Geothermal Association, said in a statement on the group’s website.
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