7 BETTING ON HYDROGEN: JAPAN’S GREEN INDUSTRIAL POLICY …
163
a fast-moving industry, with developments appearing daily, and at times
becoming outdated as soon as they are reported.
Decarbonizing Residential Heat and Power. One focal point of the
2014 Road Map is the ENE-FARM (“energy farm”), a stationary fuel
cell unit that generates electricity to power the home and captures heat
generated by the unit to provide heated air and water. These units
are thus known as “combined heat and power (CHP)” stationary fuel
cells. 11 In 2008, Japan became the first country to bring these units to
market. Pioneers in the industry were Panasonic, Toshiba, and Aishin
Seiki, working together with gas utilities Tokyo Gas and Osaka Gas, which
installed the units and supplied natural gas.
Earlier industrial policy had focused on assessing consumer usage
patterns and preferences, and to identify technical and commercial problems. 12 The government helped spur initial consumer demand by heavily
subsidizing end users, with support totaling almost half of the cost of
each unit (Hashimoto 2015, p. 9). As a result, the industry had achieved
an installed base of some 115,000 units by 2014. The June 2014 Road
Map continued to focus on creating a self-sustaining market, and set an
ambitious goal of installing 1.4 million units by 2020 and 5.3 million
by 2030. The industry’s immediate goal was to lower unit costs to
around US$8000 by 2015, which would represent a 50% cost reduction
compared to 2008 (Behling 2015; Maruta 2016, p. 14).
The government and industry recognized that significantly lower unit
costs would require a massive increase in consumer demand. To this end,
the Japanese government worked with the private sector and municipalities to create entire cities based on stationary fuel cells. In April 2016,
Panasonic cooperated with the town of Tsunashima, near Yokohama, to
create a “Smart City” that would install CHP units to run its town energy
center and other public facilities, with a goal of reducing the city’s CO 2
emissions by 40% (Shayon 2016). In March 2017, the northeastern city
of Kamisu announced that it would use hydrogen fuel cells in all cityowned facilities in the hopes of being known as “Advanced Hydrogen
City Kamisu” (JFS 2017). The Tokyo government has announced it will
use CHP units to power the 6000-unit Olympic Village being built for
the 2020 Olympics.
While the Road Map’s ambitious installation targets will not be met
(METI reported installations of around 350,000 units in 2019), unit
costs of some stationary fuel cells have already declined below the
US$8000 target. As a result, in 2019 the Japanese government was able
to end its subsidies for these units (E4tech 2019). 13
163
a fast-moving industry, with developments appearing daily, and at times
becoming outdated as soon as they are reported.
Decarbonizing Residential Heat and Power. One focal point of the
2014 Road Map is the ENE-FARM (“energy farm”), a stationary fuel
cell unit that generates electricity to power the home and captures heat
generated by the unit to provide heated air and water. These units
are thus known as “combined heat and power (CHP)” stationary fuel
cells. 11 In 2008, Japan became the first country to bring these units to
market. Pioneers in the industry were Panasonic, Toshiba, and Aishin
Seiki, working together with gas utilities Tokyo Gas and Osaka Gas, which
installed the units and supplied natural gas.
Earlier industrial policy had focused on assessing consumer usage
patterns and preferences, and to identify technical and commercial problems. 12 The government helped spur initial consumer demand by heavily
subsidizing end users, with support totaling almost half of the cost of
each unit (Hashimoto 2015, p. 9). As a result, the industry had achieved
an installed base of some 115,000 units by 2014. The June 2014 Road
Map continued to focus on creating a self-sustaining market, and set an
ambitious goal of installing 1.4 million units by 2020 and 5.3 million
by 2030. The industry’s immediate goal was to lower unit costs to
around US$8000 by 2015, which would represent a 50% cost reduction
compared to 2008 (Behling 2015; Maruta 2016, p. 14).
The government and industry recognized that significantly lower unit
costs would require a massive increase in consumer demand. To this end,
the Japanese government worked with the private sector and municipalities to create entire cities based on stationary fuel cells. In April 2016,
Panasonic cooperated with the town of Tsunashima, near Yokohama, to
create a “Smart City” that would install CHP units to run its town energy
center and other public facilities, with a goal of reducing the city’s CO 2
emissions by 40% (Shayon 2016). In March 2017, the northeastern city
of Kamisu announced that it would use hydrogen fuel cells in all cityowned facilities in the hopes of being known as “Advanced Hydrogen
City Kamisu” (JFS 2017). The Tokyo government has announced it will
use CHP units to power the 6000-unit Olympic Village being built for
the 2020 Olympics.
While the Road Map’s ambitious installation targets will not be met
(METI reported installations of around 350,000 units in 2019), unit
costs of some stationary fuel cells have already declined below the
US$8000 target. As a result, in 2019 the Japanese government was able
to end its subsidies for these units (E4tech 2019). 13