Paper: Japan's Geothermal Energy

The Japanese archipelago is situated at the northwest edge of the Pacific rim ring of fire, a region of high seismic and volcanic activity. As would be expected, the nation is dotted with hot springs(onsen), ceilinged by volcanic mountains and frequently rocked by earthquakes. It would seem that the seismic activity in Japan would signal an opportunity to develop geothermal power sources for civil use. This paper discusses the current energy paradigm of Japan, gives examples of other nations which use geothermal energy for a large portion of their energy needs, and examines the past efforts of producing and future potential of Japan to produce geothermal energy. The inspiration for this paper comes from my time in Hokkaido, Japan, when I used onsen on a daily basis in the wintertime and had my apartment thoroughly disorganized by the Tokachi Oki earthquake of 2003, subsequent to which I evacuated due to a tsunami warning. Certainly, I thought, geothermal activity of such intensity in Japan could also be used to run turbines, as I saw in Italy, a country which has a lower level of geothermal activity but a comparatively higher level of geothermal energy use.

JAPAN’S ENERGY USE
According to the International Energy Agency (the IEA), in 2006, Japan produced only 3077 Gigawatt-hours (gwh) of electricity from geothermal sources, and no direct-use heat whatsoever. Rather than taking advantage of locally available sources, Japan currently imports most of its energy. The Japanese energy paradigm currently has a bifurcated structure, with the largest amount of electric power being produced by nuclear energy, and the rest of nuclear power as well as transportation being run on fossil fuels. For example, in 2006, Japan had nuclear energy production of 303426 gwh, 298,899 gwh of electricity from coal, and 120736 gwh of electricity from oil--- geothermal electricity production was around 1% of nuclear electricity production. Regarding Japan’s energy imports, Japan depended on imported oil for 49% of its total national annual energy consumption in 2005, importing 90% of that amount from the Gulf States, particularly the UAE and Saudi Arabia, as well as Qatar, Kuwait, Iraq and Iran. Among oil, Japan mainly imports light and medium distillates, with each of the two occupying over 30 percent of the nation’s oil mix in 2008. Due to its lack of domestic supply, Japan tops many global categories of energy imports, including hard coal, of which it imported 186 million tons in 2008, almost double the amount delivered to the next highest importer. Additionally, Japan is the world’s top importer of natural gas, importing 95 billion cubic meters of gas in 2008. Apart from fossil fuels, Japan also produced the third highest amount of nuclear energy in the world in 2007, with its 264 terawatt-hours occupying almost 10% of the world’s total nuclear power production in that year.

NUCLEAR’S PROBLEMS
Of course, nuclear power in Japan has often met with stiff resistance from local groups due to its perceived possible harmful effects as well as 20th century history. However, on the other hand, scholars have also documented the fact that many local governments in Japan are not averse to having power plants due to the jobs created by the building and operation of such power stations. Therefore, a delicate balance exists in siting issues in Japan, dependent often on the strength of local unions and the ideological background of a city’s local politicians.

PROBLEMS OF FOSSIL FUELS
Fossil fuels cause several problems for Japan, both on a security basis and on an environmental basis. First of all, Japan does not have a navy of sufficient size to protect shipping routes from oil suppliers in the Persian Gulf, so it is forced to depend on the force capabilities of other countries, thereby constricting national foreign policy. Secondly, any long-term constriction of fossil fuel supply would have disastrous effects on the Japanese economy, a fact which adds increasing weight to Japan’s dependence on fossil fuels. Furthermore, burning of coal in power plants causes air pollution and acid rain. Finally, the use of coal and oil to produce power increases the amount of greenhouse gases in the atmosphere. The preceding security problems are nearly unavoidable, although improved waste gas scrubbers and carbon capture and sequestration techniques may be able to alleviate environmental problems.

ATTRACTIVE CHARACTERISTICS OF GEOTHERMAL
Geothermal power, on the other hand, does not face the same siting problems as nuclear power does, due to geothermal power’s relatively low environmental profile and level of hazardousness. Geothermal power can produce base-load power in a similar manner to nuclear power, with the added possibility of suitability for producing direct heating. In contrast to both nuclear power and fossil fuels, geothermal power also compares favorably in that it does not leave a hazardous residue after power production has occurred. Additionally, energy sources such as geothermal, wind power, and solar power have the added effect of being readily available anywhere on earth. A nation that increases its usage of such energy resources gains the added benefit of greater energy security due to a decrease in reliance on fossil fuels. However, the scale of geothermal projects in Japan has remained small overall, with national production capacity basically frozen for the past ten years. Australian scholar Hayden Lesbirel has discussed a ‘reverse NIMBY syndrome’, which states that once a community has begun to add nuclear power stations, it may actually add more than are needed to power the local area, thereby developing an unhealthy relationship between the locality and the power plants. Such additions, he notes, do not entail dealing with the inevitable frictions caused by creation of new green-field nuclear power sites. In the extreme case, Lesbirel highlights the Tokyo Electric Power site at Kashiwazaki-Kariwa in Niigata prefecture, the world’s largest nuclear site, as an example of overcapitalization: there are seven nuclear power plants located there, although they have been mostly shut since an earthquake struck nearby in 2007. On the other hand, for a geothermal plant, the relative sacrifices may be smaller, but so are benefits. Without government support of investment in geothermal programs, geothermal programs do not hold the same economic benefit for communities as nuclear plants do.
Nevertheless, in the face of overwhelming reliance on imported energy sources for most of the 20th century as well as the present, Japan has been uncannily slow to develop large amounts of renewable energy supplies, including solar, wind, and wave power, and particularly another energy resource that the archipelago possesses abundantly: geothermal energy. Although the first experiments in geothermal power in Japan were actually performed in the early 20th century and the first functional geothermal power plant brought online in 1966, somehow geothermal power has not caught on in Japan. Geothermal potential certainly exists, but somehow manages to stay out of the public eye. A recent example is that 2008’s Cool-Earth Energy Innovative Technology Program, a prominent new government energy program, made no mention of deep earth power sources. The lack of emphasis on geothermal energy contrasts with other seismically active island nations, including Iceland and the Philippines.

REFERENCE 1 ICELAND
Like Japan, Iceland is a volcanic island nation with high levels of geothermal activity. However, unlike Japan, Iceland has managed to develop its geothermal resources to a level high enough to power much of the country. Naturally, Iceland has a population of only around 320,000, leading to a population density less than 1/100th of Japan. Still, the success of Iceland in utilizing its geothermal assets can serve as an example for any nation or region with similar geothermal resources. A part of the Mid-Atlantic Ridge System, the entire island was created by volcanic activity. In fact, the island has been “classified into high temperature areas and low temperature areas”. High temperature areas have geothermal fluids heated by magma to temperatures around 300 degrees Celsius, whereas lower temperature areas have fluids heated to a temperature between 65 and 120 degrees Celsius4 Iceland uses geothermal energy for nearly 90% of its heating needs, with an installed capacity of approximately 800 MW In terms of electric power, Iceland obtained around 26% of its power from geothermal energy in 2006, with most of the remainder being produced through hydroelectric processes.

REFERENCE 2 PHILIPPINES
The Philippine archipelago abuts Japan to the south. Like the Japanese archipelago, the Philippines have arisen due to volcanic activity under the Pacific rim. Also similar to Japan, the Philippines do not possess a large domestic supply of fossil fuels. In the case of the Philippines, the government began to encourage the use of geothermal energy in industry from the time of the oil shocks of the 1970s, resulting in the fact that the Philippines gained approximately 20% of national electric power from geothermal energy in 2006.The Philippines’ use of geothermal energy is the result of a long-term comprehensive energy policy launched after the first oil crisis, which also included exploration of domestic fossil fuel energy sources and development of hydroelectric power. Although the initial impetus for the development came from the Philippine government, which gave tax breaks and exemptions to companies investing in geothermal energy, private firms performed a large portion of the actual work, either on a contractual or an individually subsidized basis. It is a heartening case that shows that if a nation devotes itself to using geothermal energy, it can be possible to change the energy mix on a wide scale. Additionally, the Philippines’ population density, at 307 per square km, is quite close to that of Japan, showing that high population density does not necessarily deter the development of geothermal energy sources.

THE MITI SUNSHINE PROGRAM
Although Japan currently does not rely on renewable or alternative energy for the vast majority of national energy demand, there have been efforts in the past to improve energy independence. One of the main contemporary beginnings of Japan’s efforts to change its energy mix began in 1974, during the oil crises of the 1970s. The erstwhile Ministry of International Trade and Industry (MITI) began the project in an effort `to `alleviate the energy crisis` The Sunshine Program mainly focused on wind, ocean, and solar power, as well as other new energy technologies. Subsequently, the government merged the Sunshine Program with other programs covering efficiency to form the New Sunshine Program in 1993.
Several different government agencies have had responsibility for promoting geothermal power in Japan. One main agency is the Agency for Natural Resources and Energy (ANRE), headquartered at Kasumigaseki in Tokyo. ANRE reports directly to the Ministry of Economy, Trade and Industry (METI). Within ANRE, the Energy Conservation and Renewable Energy Department’s New and Renewable Energy Division works on geothermal power. ANRE also has jurisdiction over the New Energy Foundation, which organizes an industrial forum and a database covering geothermal energy. Additionally, ANRE established the Geothermal Research Society of Japan in December of 2008.

THE ROLE OF NEDO
Organized in 1980, the New Energy and Industrial Technology Development Organization(NEDO) was a MITI-funded organization responsible for researching alternative energy technologies. In 2003, it was reorganized as an Incorporated Administrative Agency. For the fiscal year 2009 it had a budget of 234.7 billion yen. Headquartered in Kawasaki City in Kanagawa Prefecture, it is currently using multiple avenues to promote geothermal energy in Japan. NEDO has the status of an independent administrative agency, rather than as a direct-sub agency of METI (the name of MITI since its reorganization in 2001). The ANRE website lists ANRE as an affiliated organization. However, it seems that ANRE’s responsibilities are not entirely superficial: the Project for Geothermal Power Development, begun in 1980, transferred to NEDO in 1993. In the fiscal year 2007, the project had a budget of 580 million yen which could provide subsidies of 50% for drilling costs of exploratory wells and up to 20% of installation costs for pure geothermal power generating facilities. In addition, NEDO carried out a series of large-scale survey of geothermal sites from 1980 to 2010, called the ‘Geothermal Development Promotion Surveys’ . This survey had a budget of 1.85 billion yen in 2008, according to the NEDO website. The survey had three main phases: locating high-temperature zones, verifying geothermal reservoirs, and pre-feasibility studies for geothermal power stations.
The survey identified three promising sites in Hokkaido, seven sites in Honshu, and four sites in Kyushu. According to the 2009 report issued by NEDO, four sites total are being developed, in Aomori, Niigata, Nagano, and Kagoshima prefectures. The report discusses the mechanisms for structuring the projects, which are as follows:
After bidding requests are issued by NEDO, interested parties will submit a geothermal power production business plan and a geothermal resource inspection plan to NEDO. NEDO then determines the feasibility of the power production business plan, and NEDO’s contract assessment committee will decide the area to be inspected and the authorized inspector.,
Subsequently, an “inspection authorization contract” will be concluded, and a new phase of the project will be entered. With the aid of a third-party assessor, NEDO will evaluate the project, and decide whether or not to continue the project at the end of the first year. Meanwhile, a geothermal development promotion inspection, including plan inspection and environmental impact inspection will be conducted by the acting party, who will fix any problems. If the project passes NEDO inspection at the end of the first year, then the project will be implemented.
In the different phases of the project, different entities will act to further the project. For example, in the case of the Aomori project, the prefectural government will assess the feasibility and liase with local groups, Mitsubishi Material Co. will value the resource, and Mitsubishi Material Techno will inspect the resource. A sample inspection report from the Otani site shows regular monthly or bi-monthly temperature survey data from five different locations on the Otani site. The survey data also notes the water pressure, amount of water extracted, sediment, conductivity and pH of the water surveyed. Similar sites will also be surveyed at two locations in Hokkaido and one location in Iwate prefecture.

THE ONSEN PARADOX
Oddly enough, while Japan has negligible levels of geothermal power use, Japanese research into hot water emitting from the ground is actually quite high due to the popularity of onsen. However, the 2008 IEA report from the IEA’s Geothermal Implementing Agreement (the GIA report) suggests that the heavy amount of use of the hot spring waters for baths may actually have caused a detrimental effect on the use of geothermal energy for power, due to a perceived competition between onsen and geothermal power stations for the same heated water energy. Early in 2009, the UK’s Guardian Newspaper carried a report of tensions between the resort town of Kusatsu and the neighboring town of Tsumagoi, which proposes to construct a geothermal plant. On the public side, the GIA report goes on to state that during the second half of the 1990s, the government withdrew funding for geothermal energy, leading to stagnation of projects in the geothermal sector. As of 2003, the government considered geothermal and hydro power to be ‘mature technologies’ not deserving of incentivization. The slump in geothermal energy in Japan did not end until 2006, when the government designated geothermal energy as part of its ‘New Energy’ plan. However, the plan explicitly denies subsidies to binary plants, and had a budget of only 580 million yen in 2007. The GIA report states that METI feels that the promotion of geothermal energy is ‘extremely important', hence, from April 2008, the New Energy Law once again includes geothermal energy in the category of ‘New Energy’. But, according to the GIA report, there are currently a paucity of laws in Japan dealing directly with geothermal power. Many parts of geothermal energy, such as approval for projects and drilling, are still governed by the onsen committees of local governments. Additionally, the government has no concrete targets to expand national power production capacity beyond the current 535 MW.
Moreover, since a plateau between 1980 and 1995, research money for geothermal energy has dwindled to around 2 billion yen per year. Without government incentives, private interest in geothermal energy in Japan also has languished. It may be that geothermal energy in Japan will take a great amount of time to recover given the neglect that it received over the past ten years. However, although research spending on geothermal energy has dwindled, it cannot be said that Japan does not have adequate levels of spending on public works: in fact, the average level of spending on public works in Japan is around 5% of GDP, far higher than that of the United States, the United Kingdom, Germany, or France.

THE NEW NATIONAL ENERGY STRATEGY
In 2006, METI announced its ‘New National Energy Strategy’, which called for increases in alternative and renewable energy contributions to the nation’s overall energy mix. This policy could provide improved support to the development of geothermal energy in Japan. Aimed to improve Japan’s energy security, the strategy arose mainly as a response to elevated oil prices. The plan took particular aim at three specific tasks: creation of energy security measures, a holistic approach to energy and environmental issues, and international cooperation with Asian and world nations on energy security issues. Naturally, the second goal has particular pertinence to the development of Japan’s geothermal potential. However, the strategy only mentioned geothermal energy in passing, rather than detailing any specific projects that METI planned to pursue towards developing higher levels of geothermal power generation. Additionally, the summary of renewable energy sources posted on the Federation of Electric Power Companies of Japan makes no mention of geothermal power. Japan has signed the 1997 IEA Implementing Agreement on Geothermal Energy, which has research goals such as provision of advanced geothermal systems, enhanced drilling techniques, and improved direct use of geothermal energy.

ONSEN REVISITED
However, one area where Japan makes great use of geothermal activity is in its 15,000 commercial onsen. In 2006, the New Energy Foundation carried out a study, which showed that bathing use comprised almost 90% of direct use of geothermal energy at that time; however, the report stated that there still exist many places where direct use could replace fossil fuels for functions such as home heating and hot water- right now such uses make up less than 1% of direct heat use in Japan, in contrast to Iceland. As previously mentioned, there is a possible competition that may ensue between onsen operators and geothermal plants; however, this need not be the case, as many onsen actually pre-cool their water by allowing heat to conduct into the atmosphere or the ground before using the water. A medium-based thermal exchanger could easily replace this cooling section, thereby replacing heat waste and creating a net savings.

CONTRIBUTION OF PRIVATE FIRMS
Notwithstanding the low level of geothermal use in Japan, Japanese turbines and generators still have a dominant share in world geothermal equipment markets, with Toshiba-manufactured equipment 34% of world geothermal energy capacity. This fact would seem to indicate that a strong and clear policy message could effect drastic changes in Japan’s energy mix. In fact, this change may have gotten underway already. In January 2009, a Nikkei report detailed plans by Mitsubishi Materials Corp., J-Power, Nittetsu Mining Co. Ltd. and Kyushu Electric Power Co. to develop new geothermal sites. Together, Nittetsu Mining and J-Power would invest approximately 40 billion yen to build a geothermal plant in Yuzawa in Akita prefecture. The plant was expected to produce up to 60,000 kW of power and to open in 2016, the report said. No further reports have been made on the subject on the websites of either company or in Nikkei. Currently, the Japanese government’s new policy has a strong interest in developing geothermal power. In order to achieve that interest, the government has introduced an incentive system giving compensation for bank interest for developers. This incentive is a remedy to the simple fact that many developers are put off from starting new projects due to the high level of up-front investment required. The government has decided to subsidize both power plant development and exploration well drilling at a rate of 50%, as well as subsidizing production/reinjection wells and above-ground facilities at a rate of 20%.

NO NATIONAL RESEARCH PROJECTS SINCE 2003
Although Tohoku University, Hokkaido University, Kyushu University and the Advanced Institute of Science and Technology all have research programs. None of the programs were heavily funded as of 2007, however, with Kyushu University receiving 60 million yen, Tohoku University receiving 30 million yen and AIST receiving a total of around 20 million Yen. These are relatively small amounts of money in light of the fact that Japan had the highest energy R&D budget of the IEA member countries in 2003. Still, several innovative techniques may aid geothermal energy production in Japan if introduced.

KALINA CYCLE
The Kalina cycle is a relatively new technique for geothermal energy production that has relatively higher efficiency compared to previous methods of converting geothermal energy into a usable form. The innovative aspect of the Kalina cycle is that it uses an ammonia-water mix medium fluid to transfer heat. As the fluid is effective at relatively lower temperatures (i.e. less than 100 degrees Celsius), the technology has a potentially wide-range application. Furthermore, after the power production phase of the process the heated medium fluid remains at a temperature of 80 degrees Celsius, meaning that it can still be used for building heating purposes. As of 2009, the Kalina system has been implemented at a demonstration plant in Iceland and a power station in Germany. The Iceland power station, located at Husavik, provided 2 MW of power in addition to supplying 75% of local community heat demand, according to the web site of Icelandic engineering firm Mannvit.
Additionally, according to the IEA, the new 2010 Renewable Energy targets which superseded the New Renewable Energy target in 2008 makes no special provision for geothermal energy specifically, although it is possible that geothermal heat could be used in the category of Other renewable heat, which is expected to rise tenfold from 7.1 million kl of oil equivalent in 2006.

ENHANCED GEOTHERMAL SYSTEMS
Unlike previous geothermal techniques, which mainly capitalized on readily available surface heat sources, the new technique known as ‘enhanced geothermal systems’ (EGS)gains access to geothermal energy sources through deep drilling, making the resources available anywhere. Currently France, Australia, Germany, the United States, and Switzerland have all been working on the development of enhanced geothermal systems. EGS makes use of advanced drilling technology to bore 4-6 km into the earth’s crust, where so-called ‘hot dry rock’ is found. A 2006 Massachusetts Institute of Technology Study commissioned for the United States government stated that EGS would be able to provide‘cost-competitive generating capacity’ However, this technique does have the potential to cause seismic activity. Therefore, care is needed in site choice and implementation of safety techniques. For example, the city of Basel, Switzerland, which had several small earthquakes possibly caused by a test site located there, eventually canceled their experimental EGS project. Previously, the city had been destroyed by an earthquake in the 14th century, so residents were loath to risk a re-occurrence of such a cataclysmic event On the other hand, techniques for using supercritical carbon dioxide as an exchange medium may make EGS techniques increasingly viable for power and heat production.

In conclusion, it may be helpful to note that while Japan currently does not gain a high percentage of its energy from geothermal sources, it has both the technology and the physical resources required for large-scale geothermal energy production. As can be seen from the examples of Iceland and the Philippines, geothermal energy used for both building heating and electrical power can serve as a useful component of a nation’s energy mix. Japan has high spending on public works and on research and development. At this point, the country only lacks the political momentum that would allow a shift of the national energy paradigm towards more geothermal energy. However, recent developments, including announcements by METI and private businesses indicate that this shift may be beginning to occur.