In many ways, this year was the tipping point for renewable energy. The world has woken up to the imperative of energy transition, and countries around the world have made progress on this front, albeit in different degrees. We take stock of their situation in this multi-part series.
JAPAN
Energy Storage
Japan’s tremendous increase in solar and wind energy capacities in recent years have pushed the demand for standalone energy storage facilities in the country. Fluctuations out of renewable electricity generation and the resultant strain on the grid is also hoped to be better managed and generation curves levelled with the adequate energy storage capacities.
Under the Japanese Ministry of Economy, Trade and Industry’s (METI) latest program (April 2023), storage battery facilities of minimum 10 MW capacity that can be independently connected to the grid are permitted to apply for subsidies equivalent to the fixed costs of the applicable project for a period of 20 years. This initative is expected to mitigate the risk that potential developers face in the country.
Further, utilities and developers are showing immense interests to indulge in energy trading in the domestic energy market using their standalone energy storage assets. Japan’s Pacifico Energy made the country’s first energy trades from BESS assets (2 MW/ 8 MWh asset) in June this year, effectively kick-starting the JPEX spot power market.
Some of the leading energy storage projects in the country being developed in 2023 are as following:
The 1.4 MW / 4.2 MWh grid-scale battery storage system in Tagawa-gun, Fukuoka developed by NTTAE-Kyuden-Mitsubishi Corporation has commenced its operations in July this year.
Shikoku Electric Power has announced the construction of 12 MW/ 35.8 MWh BESS in Matsuyama City, with the help of a local JV involving CATL.
Petroleum firm Idemitsu Kosan launched its first BESS project – a 15 MW/ 48 MWh lithium-ion based project in the coastal region of Himeji.
NGK Insulator is supplying sodium-sulfur (NAS) based LDES system with a capacity of 69.6 MWh lasting 6 hours to Sala Energy’s project in Shizuoka Prefecture.
Itochu – a leader in residential battery storage – announced its first grid-scale ESS project with utility Osaka Gas. The 11 MW/ 23 MWh project is located in Suita City, Osaka.
Tokyo Electric Power (TEPCO) has operationalized a 1 MW/ 3 MWh BESS using second life EV batteries perfected by Toyota.
E-mobility
Japan’s vibrant automotive industry is on slow catch up with the global EV trend, although significant investments are coming from across the board for both manufacturing push and consumer adoption of EVs. Japanese automakers are relatively lagging behind in the global race to e-mobility, while the domestic EV market is also in a nascent stage, with EV sales accounting for just 2.1 percent of total vehicle sales in the country. Small and affordable ‘kei’ cars are the most popular EVs in Japan.
The Japan electric car market is projected toexhibit a growth rate (CAGR) of 6 percent during 2023-2028, according to IMARC Group’s latest report. Some of the latest developments on the EV ecosystem in Japan in 2023 are as following:
Japan has struck a trade deal with the US on EV battery materials to strengthen battery supply chains in both the countries and reduce the dependence on China. The minerals include lithium, nickel, cobalt, graphite and manganese.
Japan has assured a support of $2.2 billion for production of batteries to boost the EV manufacturing and exports in the country. This includes nearly $1 billion subsidies for automakers to intensify their transition to emerging clean mobility technologies.
BYD has started selling its BEVs in Japan from this year, with plan to establish 100 dealerships across the country by end of 2025.
Tokyo has raised 4 billion yen in funding for increasing the number of residential EV charging infrastructure in its 2023 budget. The city targets chargers at apartments to reach a count f 60,000 by 2030.
NUMBER OF EV CHARGERS IN JAPAN
Green Hydrogen
Japan is quite ‘hydrogen active’ in the Asian region, with the country prepping-up investments both in domestic and neighbouring markets for hydrogen production to aid its low-carbon targets. In June 2023, the country revised its Basic Hydrogen Strategy’ of 2017 to target hydrogen supply of up to 12 million tonnes a year by 2040. Japan aims for reaching 20 million tonnes production by 2050.
To this effect, the country is planning to invest 15 trillion yen ($107.5 billion) over the next 15 years to boost hydrogen supply in the country. The Japanese government is expected to provide 6-8 trillion yen, while the rest is expected from the private sector. The country is looking at both local production and import route from nearby countries for hydrogen supply, given its complex geography and vulnerabilities to natural disasters.
Further, the government wants to increase electrolyzers production for domestic and export deand, targeting a total of 15 GW of electrolyser capacity by the end of 2030, up from less than 1 GW currently.
Some of the recent project developments in the green hydrogen sphere in Japan are as following:
Tokyo has demonstrated a 100 kW fuel cell system to generate electricity from green hydrogen and hydrogen generated from waste plastics to power the Tokyo Tech Environmental Energy Innovation (EEI) Building.
Japan Suiso Energy is investing $2.35 billion at a green hydrogen production and liquefaction facility in Victorian Latrobe Valley in Australia.
Next year, Japan will open hydrogen handling port in an artificial island near Kobe to handle the world’s first transporter ship for liquid H2 – the Suiso Frontier.
To see other articles in this series, click here.
SOUTH KOREA
Energy Storage
South Korea is said to hold the largest share of battery energy storage capacity in the Asia-Pacific region, with more than 30 percent market share in 2022. It has been a leader since 2010in energy storage installations, largely based on tariffs payable for commercial and industrial ESS. It continues to be the most mature market in the region after China.
Apart from the general factors pushing BESS installations such RE integration, grid stability, and energy security, the country’s market is also driven by its battery manufacturing prowess. Local companies such as LG Chem, SK, and Samsung SDI have invested heavily on battery cell manufacturing and R&D for advanced cell chemistries, which is spurring significant growth in the South Korean energy storage scenario.
The country’s BESS market is predicted to achieve a CAGR 29.6 percent from 2022 to 2027, as per a report published by MarketsandMarkets. South Korea has set a target to achieve 25GW/ 127GWh storage capacity by 2036. Some of the latest developments in the country energy storage sector this year are as following:
In August, South Korea announced competitive solicitation for large-scale ESS on Jeju Island for acapacity of 260 MWh and 65 MW output, looking for 4 hour-plus duration and 15-year contract.
Korean Electric Power Company’s (KEPCO) 1,000 kWdc/ 5,800 kWhdc sodium-sulphurBESS demonstration project by NGK Insulators went online in June.
SolarEdge began exporting NMC li-ion battery cells from its 2 GWh manufacturing facility in Chungcheongbuk-do Province.
H2 Inc’s 330 MWh vanadium redox flow battery (VRFB) manufacturing facility in Gyeryong-si is expected to become operational later this year.
E-Mobility
In South Korea, EVs account for about 1.8 percent of all automobile sales in the country as of May 2023. The government is aiming to achieve 33 percent of electric and hydrogen vehicle penetration (in terms of new vehicle sales) by 2030. A national ratio of chargers to EVs is envisaged to be at least 50 percent. That way, the country is one of the fastest-growing and conducive market for EVs in the Asia-Pacific region, apart from China.
The South Korea electric car market is expecte to grow at a CAGR of about 33.8 percent in the forecast period of 2023-2028, as per a report from Expert Market Research. The government’s support to popularize electric vehicles and celebrity collaborations with automobile brands are anticipated to drive the market for electric cars during the forecast period, the report says.
Given a strong R&D and manufacturing base for automobiles and auto components, South Korea is bullish on a quick and effective transition to electric and hydrogen vehicles, aided by the local development of battery cells and cost-parity of EVs on par with conventional ICE vehicles to ensure strong consumer demand.
In the immediate period, the Korean government is intending to put 3 million more EVs on the road in the next four years, for which it is expected to provide opportunities for manufacturers to expand production of electric cars in the country. Some of the other latest developments in the e-mobility space of South Korea are as following:
South Korea government is to install more than 70 units of 350 kW-class ultra-fast chargers this year to enable EV support infrastructure for intercity drivers.
Chinese battery materials firms are reportedly investing $4.4 billion in South Korea to meet US (EV) tax credit rules aimed at reducing the dominance of China. The companies include Ningbo Ronbay, Zhejiang Huayou Cobalt (partnering with Posco Future M and LG Chem in separate ventures), Green Eco, and CNGR Advanced Material.
South Korea has vowed $15 billion investment from public and private sectors by 2030 to develop and commercialise solid state batteries for global EV race.
Hyundai Motor Group has announced $18.14 billion investment by 2030 to bolster South Korean EV industry, with a new plant to be ready by 2025 and ramp-up of local EV production to 1.51 million units by 2030.
Green Hydrogen
As a frontrunner in hydrogen policy (revised in 2019), South Korea has outlined a roadmap to nurture a world-leading green hydrogen ecosystem n the country, as it considers hydrogen as critical for its 2050 net zero climate strategy. Green hydrogen is predicted to account for 93 percent of South Korea’s hydrogen consumption by 2050. The country has set a goal of having green hydrogen penetration of 7.1 percent in its total energy mix by 2036.
South Korea already accounts for about one-third of global installed capacity of utility-scale fuel cells in 2022. To further bolster H2 production, Korean firms SK, Hyundai Motor, POSCO, Hanwha and Hyosung have pledged to collectively invest approximately $33 billion through this decade in hydrogen supply chain. This includes fuel cell and electrolysis power plants, storage and distribution assets, hydrogen vehicles ecosystem and hydrogen liquefaction facilities.
SOUTH KOREA HYDROGEN INITIATIVES
Some of the other key developments in the South Korean green hydrogen industry this year are:
South Korea has announced two bidding rounds for a total volume of 1,300 GWh, in what is claied as the world’s first hydrogen power generation bidding market.
A 30 MW green hydrogen facility is to be built in Jeju City as a demonstration project announced by the local government. The facility will include 10 MW H2 production using alkaline electrolysis and 5 MW using polymer electrolyte membrane electrolysis technology.
As a demonstrator project, the Yongsoo wave energy pilot plant, installed offshore Jeju Island, is being prepared to produce green hydrogen offshore using marine energy.
POSCO-led consortium has bagged a $6.7 billion deal to build what the company claims as the world’s largest green hydrogen plant in Oman.
Korea Zinc is establishing a green hydrogen plant in Townsville, Queensland (Australia) with a targeted capacity to produce 280,000 tons in 2030. Plans are in place to convert more than 1 million tons of green H2 into ammonia and export the same to Korea.
To see other articles in this series, click here.
THE PHILIPPINES
Energy Storage
The Philippines s home to some of the largest battery energy storage systems (BESS) in the world. One of them belongs to San Miguel Global Power Holdings (SMGP), part of one of the biggest power suppliers on the island nation, which runs a BESS project boasting a capacity of 1,000 MW across 32 battery stations.
The second comes from Terra Solar, a joint venture of two Filipino companies, which last year proposed a solar-plus-storage project that would combine 2,500-3,500 MW of solar PV generation capacity with battery storage capacity of 4,000-4,500 MWh. The project will start suppling power from 2026.
In January 2023, the Philippine government revised rules for energy storage systems (ESS). As part of the revision, the country increased its renewable energy target to account for half of power generated by 2040, which it said “…necessitates enhancement of the existing ESS policy and regulation to accommodate the development of ESS in support to the renewable energy integration and grid stability.”
he country identified four technologies as part of ESS technologies. These are battery energy storage systems (BESS), compressed air energy storage (CAES), flywheels and pumped hydro energy storage (PHES). Local outlets and ES companies have noted – and decried – the exclusion of hydrogen from the ESS classification.
While changing its ESS norms, the Philippines removed the cap on foreign ownership of RE assets, allowing 100 percent foreign ownership. Following the change, nine Chinese companies committed a combined $13.76 billion to help the country develop solar, wind and energy storage assets. Other big news from the island nation:
In December 2022, Aboitiz Power commissioned a 49 MW BESS unit at a floating diesel plant in Mindanao
In May 2023, the Philippines selected SunAsia Energy and Blueleaf Energy to build and operate six large-scale floating solar projects totalling 610 MW on Laguna Lake near Manila. The two companies plan to invest $1.2 billion for the projects, which are xpected to be commissioned in 2024.
Image: SMGP
E-mobility
In February 2023, the Philippines government launched zero import tariffs for pure electric vehicles for a period of five years. As a result, a number of Chinese EV makers – including BYD – are reported to be evaluating assembly plants in the country’s special economic zones.
According to the Electric Vehicle Association of the Philippines (EVAP), the government decision to drop import tariffs could boost annual sales by 20-30 percent this year. While EVAP does not offer figures for 2022, the group says the country recorded sales of just under 14,000 EVs over 2010-21, with the highest being 4,250 recorded in 2018.
The EVAP will stage the 11th Philippine Electric Vehicle Summit in October at the SMX Convention Center Manila. This year, the annual fest involves a two-day conference on strengthening and localizing EV and battery supply chains and a three-day exhibition showcasing foreign and local players exhibiting the EV moels, battery and charging technologies, and other e-mobility solutions.
Green Hydrogen
The Philippines excluded hydrogen from its ESS grouping earlier this year, leading to outcries from local authorities and ES-focused companies. However, the island nation remains interested in the fuel. Last month, government ministers said the country was actively working on a framework for integrating green hydrogen into its energy mix.
Experts say the Philippines has RE potential from geothermal, hydropower, wind, solar, biomass, and ocean for green hydrogen production. The government is also exploring the co-firing of ammonia (derived from hydrogen) with existing coal power plants to reduce carbon emissions, although challenges such as high costs, storage and transportation must be surmounted.
Last year, the government signed an MoU with a Japanese and an Australian firm to expedite hydrogen research. Later that year, President Ferdinand Marcos Jr approved the exploration of offshore wind asets to generate green hydrogen.
In May this year, the Mindanao Development Authority signed a partnership for the 45 MW Olutanga Hydrogen Renewable Power Plant, the first project of its kind in the Philippines.
In July, the government launched a Hydrogen Fuel Cell Research Center.
To see other articles in this series, click here.
Author : Dhiyanesh Ravichandran
Related Tags japan South Korea Philippines Energy Storage Hydrogen Green Hydrogen emobility Energy Transition 2023
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