TT-610 -- Alternatives to Summer Power Cuts, e-biz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, April 17 2011, Issue No. 610

+++ INDEX

- What's New -- Alternatives to Summer Power Cuts
- News -- March disastrous for earnings, tourism
- Candidate Roundup/Vacancies
- Upcoming Events
- Corrections/Feedback -- Toshiba's NAND shortages
- News Credits

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+++ WHAT'S NEW

Just about anywhere you go for business in Tokyo at the
moment, whether a multinational's corporate headquarters or
the corner store, all conversations start off with the
nuclear crisis and the possible power cuts in summer.
Consumers and companies alike dread the prospect of no
production/wages and no air conditioning from July through
September.

And this year is supposed to be another scorcher like 2010
was.

So just how much power will we be short of, and is the
possibility of office staff having to work in 30-degree+
temperatures likely to happen? Well, just after the quake,
certainly there were dire predictions that the nation would
be short 27 gigawatts (peak of 60GW down to 33GW now). The
government's reaction was that it would have to order
across-the-board power consumption cuts of up to 25%,
causing amongst other things for office thermostats to be
set a few more degrees higher than normal (a sweat-inducing
28 degrees is "normal"). And this might still happen.

But over the last 5 weeks, the authorities have come to
realize that simply squeezing out power cuts is going to
have an extremely negative effect on national productivity
and could cause lasting damage to the nation's finances.
Instead, they have turned their focus on to TEPCO,
pressuring the company to find a ways to increase power
generation to at least 50GW. As a result, TEPCO has
developed a Rube Goldberg plan that allows it to cobble
together a variety of old fossil fuel plants, mothballed
hydro and geothermal plants, and simply buying in masses
of temporary oil/gas generators and fuel, so that they can
supply possibly 52GW or more by the end of July -- much
closer to the anticipated peak August needs of 55GW - 60GW.

Amongst the things TEPCO will do to achieve this
out-of-thin-air magic includes: a) pumping water upstream
of hydro dams in the off-peak hours (early morning hours)
so that the water can be reused to drive turbines the
following day, b) re-starting furloughed nuclear generators
elsewhere in their network, and c) putting off maintenance
(although we are assured, not nuclear maintenance) to avoid
peak demand periods. At the same time, major manufacturers
are thinking to move employee hours earlier in the day to
achieve a type of daylight savings, imposing longer summer
breaks, and dispatching employees to other parts of the
country.

Such measures are all well and good, but there is still
going to be a gap come August, and what about winter and
next summer? The Fukushima reactors will be entombed, so
we can't expect any future power production from that
facility.

Surely there are some more meaningful/simpler ways to
either reduce power consumption or increase its production?

[Continued below...]

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[...Article continues]

We think that the government needs to show some Energy
leadership by setting some inviolable principles which will
guide them in action -- much the same as they used to hunt
out surplus slush funds in the first two years of their term.

The first should be: "Electricity is the lifeblood of the
nation and its cheap, continuous availability needs to be
guaranteed". Another should be: "Irrational laws and pork
barrel funding need to be put aside in the pursuit of
stable, safe electrical power generation."

Once those principles are committed to, there are plenty of
big, fat non-essential targets to root out. Here are just a
few:

1. Pass a law to shut off power to all cooling/heating
circuits of all vending machines around the
Tokyo-thru-Tohoku region during the month of August. There
are supposedly 5.5m vending machines in Japan and between
them they use at least 1200kWh/year x 5.5m = 6.6TWh a year.
Since most of the power is used for heating and cooling, we
can probably assume that 15% of this is used in August (and
in January next year). From what we can tell, about 1/3 of
these machines are inside the TEPCO and Tohoku Electric
Power service areas, and of these a bit less than half are
drinks machines (according to the Nikkei, about 870,000
units).

Therefore, around 160GW/hrs could potentially be saved in
the electrical service area by turning them off just during
August. Since this law would not be about punishing the
vending companies, TEPCO would then compensate Coke,
Suntory, and others for staff and basic operations costs
while on pause for that month. We appreciate that Coke and
others are already taking measures to turn off machine
cooling systems for a portion of the day during summer,
but this year, they should simply switch off completely and
garner the PR of helping out Japan. John R. Harris has more
to say about this in his blog, http://bit.ly/ibHj1D.

2. Go after all major convenience and electrical store
chains, because they use lots of cooling/heating and
lighting. We'd direct them to at least install LED lighting
in replacement of fluorescent tubes and incandescent bulbs,
and for the electrical stores to shut for 4 hours in the
afternoons during August. With a 3-month tax break or
subsidies for these chains as well as other smaller store
operators, the government could easily force a mass
conversion to energy saving devices, and the beneficial
effects of such a move would last far beyond the coming
summer. Indeed, such a mass changeover would bring down the
cost of these devices substantially, as well as providing a
massive boost for domestic electrical manufacturers.

The process of becoming more power efficient has in fact
already begun with some forward-looking companies.
Seven/Eleven has said that it expects to save 125kWh a day
per store by changing to LED lighting and installing solar
cells on the roofs of 1,000 stores around the nation over
the next few months. Now, if they were targeted to get
government help, then we imagine they could speed up their
program and do retrofits to all 6,000 stores in the TEPCO
service area, saving a massive 750MWh/day in power. Then,
if you included all the other operators' 10,000 or so
convenience stores in the same region, the savings
could be increased to around 2GWh/day. Not a small sum...
and with massive benefits to the manufacturers of LED
lighting and solar cell panels.

3. Speaking of solar cells, Japan churns out such large
amounts of photovoltaic panels that you have to scratch
your head as to why there isn't a crash program to increase
production and purchase acres of them for installation into
North Eastern Japan. One possible reason, pointed out by
blogger/Market Entry specialist Tom Sato
(http://www.tomsato.jp/tomsato.html) is that there is no
where to physically install the huge number of panels that
would be needed to replace a nuclear plant.

Actually, there is lots of vacant farm land, but the law
says it has to be used for farming. Tom points out that if
the Central Union of Agricultural Cooperatives (Nokyo) was
allowed to get into the power generation business via
tenant "solar farmers" in return for supporting legislative
changes about land use, then suddenly TEPCO would have a
major competitor and we the population would get a green
alternative energy source and a farming sector that could
be profitable again... This is a very cunning strategy and
one that would be politically acceptable.

4. Turn to the private power generation capabilities of JR
East and major manufacturing firms, and have them supply
the grid during non-peak hours. To some extent this already
happens, but it needs to be coordinated and purposeful.
According to a report by Investment firm Martin Currie, the
energy production capability of JR East and other private
firms is about 30GW. Of course they need their daytime
production for themselves, but in the evenings and early
mornings these facilities could be operated to reduce loads
on TEPCO resources -- maybe they could be used to pump that
water back up into the TEPCO hydro storage lake we were
talking about before.

5. Then there are many interesting opportunities to develop
the nation's thermal resources. Given that volcanoes and
thermal hot spots are one of the few resources Japan has in
surplus, it is strange that government R&D spending for
geothermal power production has been zero since 2002, and
yet in contrast, nuclear R&D receives JPY200bn a year. One
report from earthpolicy.org
(http://www.earth-policy.org/plan_b_updates/2011/update94)
reckons that Japan could with conventional technology
harvest about 80GW of geothermal power a year if it wanted
to.

What we hope, in any case, is that the Kan government
starts to realize that while certain vested interests have
had the nation focus on nuclear energy, these heavily
populated and geologically unstable islands have to be the
worst place in the world to build nuclear power stations.
Instead, if they bite the bullet now and fund a build up
of the installed user base of alternative energy, the
resulting technology and market advances would stand Japan
in good stead not only for energy independence, but also
to provide the production base necessary for Japanese
exporters to lead the alternative energy field in the
future.

************

Lastly, there is a new Tokyo group of technologists with a
website called RDTN.org. Their purpose is to provide an
aggregate feed of nuclear radiation data from governmental,
non-governmental and citizen-scientist sources. This data
will be made available to everyone, including scientists
and nuclear experts, who can provide context for lay
people. They are kicking their project off by creating a
mobile radiation sensor system to measure the levels near
the schools in Fukushima. If this sounds interesting, then
you might want to help them out. They are looking for cars
and drivers to travel to Fukushima to take the readings in
these areas. They also are looking for more funding. See
more about them at: http://kck.st/hMXtdM.

Contact them at: Info@RDTN.org.

...The information janitors/

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+++ NEWS

- March trade earnings plunge massive 40%
- Overall foreign departures from Japan
- Tokyo tourism plunges
- Australia to supply some temporary housing
- Solar-powered water purification units

=> March trade earnings plunge massive 40%

Although the final numbers are not in yet, according to a
Quick Corporation study of economists, the expectation is
that March trade volumes fell by at least 40%, with one
economist predicting an actual JPY96bn deficit. While
there is little consensus there will actually be a deficit
for March, there does seem to be a consensus already for
April -- yes, the nation will be in trade deficit. Official
numbers will be out on Wednesday April 20th. (Source: TT
commentary from e.nikkei.com, Apr 16, 2011)

http://e.nikkei.com/e/ac/tnks/Nni20110415D15JFA10.htm

=> Overall foreign departures from Japan

We reported several weeks ago that around 190,000
non-Japanese left Narita between March 11 and 22, compared
with a normal number of around 22,000. Now the Justice
Ministry is supplying more numbers. Officially, 531,000
foreigners left Japan in the 4-week period March 12 through
April 8. Of course some of these were tourists and about
302,000 people had re-entry permits and so are more likely
to represent temporary departees. At the same time, 302,000
foreigners entered Japan, which appears to be about 30%
less than normal, but in fact would have been even lower if
not for the arrival (we believe) of many people to help
with the relief efforts. (Source: TT commentary from
mainichi.jp, Apr 16, 2011)

http://mdn.mainichi.jp/mdnnews/news/20110416p2g00m0dm017000c.html

=> Tokyo tourism plunges

Confirming the fact that tourists are avoiding Tokyo, a
Nikkei survey of major Tokyo hotels found that the average
occupancy rate during March was just 49.8%, and for the
higher-end hotels such as the New Otani, the occupancy rate
was just 28.7%. Normally the occupancy at this time of
year, cherry blossom season after all, would be in the high
80's or above. (Source: TT commentary from nikkei.com, Apr
16, 2011)

http://e.nikkei.com/e/ac/tnks/Nni20110416D16EE269.htm

=> Australia to supply some temporary housing

The Japanese embassy has asked Australian building firms to
help in supplying some of the 30,000 temporary housing
units that Japan will build over the next few months.
Already building merchants, Carter Holt Harvey, and
remote-site prefab builder Nomad Housing have said that
they will offer flat-pack timber-frame homes to Japan.
Apparently Japan will pay around JPY4.4m for a 30sq m home
expected to house two families... ***Ed: Whoa! That's
pretty darned small!** (Source: TT commentary from
theaustralian.com.au, Apr 16, 2011)

http://bit.ly/gJ4BDZ

=> Solar-powered water purification units

No word on whether this is just a goodwill gesture or not,
but US company WorldWater & Solar Technologies has tied up
with Spain's Gamesa Corporación Tecnológica to ship two
solar-powered water purification systems to be installed
in several towns near in Fukushima. The units screen
radiation and other pollutants and provide up to 110,000
liters of fresh potable water daily. Each unit has its own
3.3kW solar cell array and thus needs no external power.
(Source: TT commentary from solarserver.com, Apr 16, 2011)

http://bit.ly/f91ZjK

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.

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+++ UPCOMING EVENTS/ANNOUNCEMENTS

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-----------------------------------------------------------

***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to editors@terrie.com.

*** In TT608 we speculated on a power hit being the reason
that Toshiba will see its NAND RAM output drop up to 20%
over the next few months, but as several readers kindly
pointed out the Yokkaichi plant is separated from the
disaster area electrically. We agree that this was a point
of dot-joining by us, and in fact the more likely reason
for the drop in Toshiba output will be its Iwate packaging
plant being severely damaged...

http://bit.ly/gEyZwU

=> Reader:
Just to alert you to a possible error in your latest Take.
You said, "Although the Toshiba plant is in Yokkaichi,
hundreds of kilometers to the south of the earthquake zone,
the momentary power outage when Fukushima Daiichi went off
line damaged sensitive equipment and Toshiba is saying that
production will be affected for some time."

But in fact, as you will see from the following:
http://bit.ly/125JiM, given that Fukushima is in the 50hz
zone and Yokkaichi is in the 60hz zone, a disruption in
power supply in one zone should not affect the supply in
the other. While small volumes of electricity can be
shunted from one zone to the other, it has to be converted
and the conversion process itself should buffer any
fluctuations in supply. Therefore it is very unlikely that
a power surge or outage in the eastern zone would have
caused a surge/outage in the western zone... but then again
I am not an electrical engineer!

The irony is that the conversion capacity of the bridging
circuits between the two systems is quite low, hence the
challenge for eastern Japan in summer as not enough power
can be drawn or diverted from the west to compensate for
the loss in generation capacity in the east.

***********************************************************
END

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+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd@japaninc.com)

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