Publication date: Dec 9, 2024
November 2024 Monthly Newsletter
Friends and Colleagues,
World leaders gathered in November to discuss measures to curb global warming at the COP29 in Azerbaijan, with mixed results. During the summit, Tokyo’s governor Koike announced plans for a 1GW offshore floating wind power project near the Izu Islands, which will be the biggest floating wind installation in the world if implemented.
In this month’s newsletter, we highlight a new green ammonia development that’s aiming to reach commercial production in the 2030s. We also shed light on the government’s efforts to use advanced technology to maximize production from one of the world’s largest geothermal reserves. Finally, we conclude by illustrating the changes in the evaluation method for bidding to select offshore power plant operators.
IHI Develops More Efficient Way to Produce Green Ammonia From Green Hydrogen
IHI Corporation said it had succeeded in testing a new method of producing green ammonia from green hydrogen derived from renewable energy. Small-scale tests were conducted at the Soma IHI Green Energy Center (Soma City, Fukushima Prefecture), and it was confirmed that the process can produce ammonia at high efficiency. The company plans to scale up the facilities to produce tens to hundreds of tons of ammonia per day, with the aim of commercializing the technology in the 2030s. The ammonia produced is expected to be used for fuel conversion at coal-fired power plants.
In the experiment, equipment capable of producing 1 kilogram of ammonia per day was installed. The company will continue to conduct tests to collect various data, which will lead to more advanced production processes and increased equipment capacity.
Next-Generation Geothermal Technology Boosts Generating Potential by 77 GW
The Ministry of Economy, Trade and Industry (METI) will launch a public-private council for the practical application of next-generation geothermal power generation technology in FY2025. The council will promote the development of new technologies such as closed-loop, supercritical geothermal technologies, and enhanced geothermal systems (EGS). These new technologies expand the range of locations suitable for geothermal power generation, and estimates suggest they could boost geothermal generating potential across Japan by more than 77 GW.
METI will provide full national support for the next-generation technologies and reduce up front development costs. While encouraging the private sector to participate and invest in the projects, commercialization will be boosted through related funds, financing, and other support measures.
Japan currently ranks third in the world in geothermal resource capacity, with approximately 23.5 GW. This can be increased significantly using next-generation geothermal technology.
METI Reviews Evaluation Method for Bidding to Select Offshore Wind Power Operators
The Ministry of Economy, Trade and Industry (METI) is reviewing the evaluation method for bidding to select offshore wind project operators to ensure projects, in which initial investment can amount to hundreds of billions of yen, can proceed steadily. METI will revise the method so that operators with “sufficient financial strength” based on stable income are selected.
Currently, a bidder cannot win unless it bids at a price of 3 yen per kW/h, which is the “zero-premium level,” meaning that the project is carried out without the premium (subsidy from the government).
The review intends to establish a new “quasi-zero premium level” that will allow the operators to choose a path to develop their businesses with a stable financial base while earning the premium at a supply price higher than the 3 yen per kWh. Since the average market price over the past three years was 14.94 yen per kWh, the quasi-zero premium level is assumed to be 14 yen per kWh.