In response to surging demand for power and the need to hit green targets, many Asian states are looking to raise the role for cogeneration in their energy mix. But Richard Baillie asks which nations are leading the way and how last year’s disaster at Fukushima alters the calculus.
Japan – time for a renaissance
Japan is no stranger to CHP. In fact, CHP started to gain a foothold here in the 1980s, during the time of the Japanese bubble economy. A second CHP wave arrived in the mid-1990s and faded with the Asian Financial Crisis in 1997. The most recent period of CHP growth was during the middle of the last decade, but this too was relatively brief, ending with the global financial crisis in 2008.
CHP’s latest eclipse came as a slump in investment combined with a spike in the price of oil and LNG following the 2008 financial crisis so that many companies stopped operating their cogeneration units. Some companies with cogeneration facilities also transferred production from their factories in Japan to other Asian countries.
The Ministry of Economy Trade and Industry forecasts that promoting CHP could deliver almost 7 GW of new capacity, including fuel cell applications, by 2030. As things stand, Japan’s 8.7 GW of CHP capacity delivers 4% of the country’s electricity supply, with industrial CHP accounting for up 80% of installed capacity.
Moreover, Japan is also starting to see a wider role for CHP in helping to meet emissions targets and energy efficiency goals, accompanied by the introduction of area-wide district energy and other measures to address barriers and raise awareness. The downside is that Japan lacks a national CHP/DHC development strategy and barriers to interconnection remain in place.