FC Expo 2014 and the Gaijin - why are they targeting Japan, and what can they offer?
FC Expo (http://www.fcexpo.jp/en/
) is Japan’s largest international fuel cell conference and trade show and this year’s event looks set to be another one characterised by the growing number of non-Japanese companies it’s attracting. In this Gaijin’s blog on last year's event, I commented how five years on from the launch of the ENE-FARM (Japan’s residential fuel cell micro-CHP systems), a second wave of Japanese manufacturers were now lining up to showcase themselves in the fuel cell space. Companies like TOTO, NGK Spark Plugs, and Miura Kogyo were on display and looking to follow in the steps of Panasonic, Toshiba, and JX – the three original manufacturers of the ENE-FARM and who are responsible for combined sales of more than 80,000 systems since 2009. Now, we see a trend of non-Japanese companies continuing to target this event. So who are these “foreign invaders”, why are they targeting Japan, and what can they offer Japan with its world leading fuel cell industry? The Gaijin companies In terms of distributed energy solutions, Bloom Energy and ClearEdge Power lead the charge from the US, while from Europe it’s Finland’s Convion, Estonia’s Elcogen and Germany’s Sunfire. Posco is South Korea’s representative. Non-Japanese companies have always had a presence at this event. Last year Elcogen and Convion were also joined by France’s Saint-Gobain and the UK’s Ceres Power (who last week announced the opening of a Japanese office and a working agreement with a Japanese OEM). But this year I see a continuing trend in the number of these companies taking a clear interest in the Japanese market. What is attracting them? So why this continuing interest? Is it that the Japanese manufacturers are further down the road of commercialisation so they don’t need to spend millions of yen exhibiting at a trade show and conference – leaving room for non-Japanese companies to exhibit or present? This of course is part of the reason. But I think the different fuel cell companies from outside Japan have also concluded that here is a country where the benefits and technology of fuel cells are clearly understood by the policy makers, where policy drivers are hurtling in the right direction, and where stationary fuel cell products above 750W power output are a rarity. All the non-Japanese companies attending this year are offering systems mainly in the hundreds of kilowatts scale – rather than the hundreds of watts.
What can they offer Japan?
Platts recently wrote how, since Fukushima, the growing volume of fossil fuel imports and the associated costs have outstripped growth of the economy and of people’s income. A weaker yen has then made things worse by increasing the cost of energy imports.
What the Gaijin companies can offer Japan is fuel cell solutions for the neglected commercial sectors – so far the focus of Japanese companies and Government policy has been primarily on residential fuel cell systems. There are many businesses, apartment blocks, public buildings and server rooms that could benefit from protection against rising fuel costs – and for which sub-1 kWe systems just don’t make sense.
With talk of a feed in tariff for CHP as well, the economics for distributed generation could receive a further boost (Japan now features as one of the “hot markets” covered in our Distributed Power Research Service.
In summary – a growth market with a gap for non-residential applications
The “foreign invasion” is made up of a diverse range of companies from around the world, who are targeting a country now with all the credentials to be a future powerhouse of distributed energy. The new market entrants from outside Japan have also noticed a gap in the market for non-residential scale fuel cell applications. Doing business in Japan is not always easy for Gaijin companies, but if they manage to find successful partnerships, then they will have a lot to offer Japan in its brave new energy world and complement its already world leading fuel cell industry.