By Roberta Gamble, Frost & Sullivan environment and energy research director
The recent crisis in Japan has hit the country’s power grid with intensity that may take months to rebuild, and could have lasting repercussions on parts of the Japanese economy. It may also help spur growth in some other power markets.
Consequences of the Fukushima nuclear site, as well as damage to the country’s power grid, will have long-term consequences to Japan’s industry and economy. In the short term, Japan has been enforcing reduced power usage by limiting public transportation and advising that it may need to conduct rolling blackouts to better manage the electricity that is still flowing onto the grid.
Many sites are also closed because buildings have been damaged or workers are unable to get to their places of employment. This activity has reduced the overall need for power, but in the coming weeks and months as industry and businesses begin to regain their momentum, Japan may see continued need for rolling blackouts and power curtailment.
This could lead to opportunities for growth in areas such as on-site power, also called distributed generation, as the power is distributed across the users and/or grid, rather than the typical centralized power plant.
As we have often seen in the U.S. and other regions, major power interruptions are one of the biggest drivers for DG. In the U.S. this has been confined mostly to large storms that cut power to communities for days, or incidences such as the 2003 Northeastern U.S. blackout.
This increased demand is most evident in back up generator sales. However, a national catastrophe can also mobilize societies and governments to demand different power solutions.
Cause and effect are also not necessarily a perfect correlation. For example, Frost & Sullivan research in 2008 to 2009 indicated that the concerns over the high price of gasoline at the pump was a driver to solar power market sales, even though petroleum only makes up one percent of the nation’s electricity generation.
The high oil prices helped drive national sentiment toward domestic sources of energy. Japan will likely see similar sentiment toward what it may perceive as safer, possibly cleaner, power sources that, if subject to interruption, may have local consequences but not cause extensive outages.
Japan is already a world leader in green and alternative power. It is a pioneer in micro-combined heat and power (microCHP), where homes or businesses employ a small generator for some to all of their electricity needs. The waste heat from the process is captured and reused as ambient or water heating.
Japan is also home to some of the world’s major solar power companies, including Kyocera and Sharp. The country is also a top global user of solar power and the largest user of solar power in Asia. The Japanese government has helped drive the market through ambitious solar power goals and incentives.
The market was affected by the recent earthquake, with some solar manufacturing plants reported to have been damaged. But overall the country may expect to see increased government policy and demand toward more distributed sources of electricity that can help rebuild the country’s power system and economy.