Factors that affect innovation, deployment and
diffusion of energy-efficient technologies
- Case studies of Japan and iron/steel industry
May 23, 2005
In-session Workshop on Mitigation at SBSTA22
Prof. Mitsutsune Yamaguchi
Teikyo University, Japan
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Outline
1. Effects of energy efficiency measures in Japan
2. Energy efficiency technologies of iron/steel industry
3. Factors that affect diffusion of energy efficiency
technologies
- Case study of technology transfer between Japan and China
4. Lessons learned
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Effects of energy efficiency measures in Japan
- macro perspective
¾The energy intensity of Japanese manufacturing industry improved by 30%
because of investment in energy efficiency technologies during 1980s.
(1010kcal/Index
of Industrial Production (FY1995=100))
1010kcal/IIP（FY1995=100）
Source: Institute of Energy Economics of Japan (2005)
2,200
8%
2,000
Change in production process
1,800
Change in capacity utilization rate,
etc.
30%
1,600
Effect of energy
efficiency
measures
1,400
1,200
Actual
actual
Without investment
capital stock for energy conservation stable case
1,000
1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990
FY
¾The accumulated energy cost-saving during 1980s due to such investment
is estimated at 18 trillion yen (US$ 170 billion), while the total investment
in energy efficiency measures was 3.3 trillion yen (US$ 31 billion).
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Effects of energy efficiency measures in Japan
- micro perspective (case study of a Japanese steel plant)
Introduction of
¾Heat/gas pressure recovery system to generate electricity
(Coke Dry Quenching (CDQ), Top-pressure Recovery Turbine (TRT), etc.
¾Reduction in number of processes (continuous casting etc)
¾Improvement in efficiency of each process
¾Waste recycling (use of plastic waste in cokes ovens, recycling of dust and sludge, etc)
Improvement of energy intensity: 22%
Improvement of energy intensity
(%)
(in comparison with late 1970s)
(= saving of US$ 80 million per year per plant)
- Reuse of more than 90% of steam
- Reuse of H2 and CO in exhaust gas
to generate electricity
Improvement of energy intensity
¾Saving of 20% of all electricity demand
25
(base year: 1979)
20
15
10
5
0
'79
'81
'83
'85
'87
'89
'91 '93
year
'95
'97
'99
'01
4
'03
Energy efficiency technologies of iron/steel industry
- international comparison
International comparison of energy intensity of iron/steel industry
150
140
130
125
120
120
(Assuming national average energy
efficiency is improved to the level of
Japan)
110
110
100
Potential of CO2 reduction for
steel industry in China and Russia
130
100
105
China: 180 M tons of CO2/year
Russia: 25 M tons of CO2/year
90
Japan
Korea
EU15
USA
Russia
large average
China
Trends in crude steel production
Source: Japan Iron and Steel Federation
250
EU15
Japan
Russia
200
Diffusion rate in Japan
CDQ: 90%
TRT: 100%
China
US
150
Mt
(Index for Japan set at 100)
150
100
50
0
92
93
94 95
96
97
98
99
00 01
Source: International Iron & Steel Institute
02
03
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Energy efficiency technologies of iron/steel industry
- typical examples
CDQ (Coke Dry Quenching)
¾Heat recovery system in which heated inert gas is used to generate electricity
after quenching hot cokes.
¾Effects of CDQ
- Energy conservation (generation of electricity)
Heat recovery boiler
CO2 emission reduction
Heated
cokes
- Improvement of quality and
Cokes basket
strength of cokes
Dust collector
- Prevention of air pollution
(SOx, dust, etc.)
Cooling
- Reduction in usage of water
chamber
¾Cost of installation
US$ 20-40 million
Steam produced
Steam
turbine
Fan
Generator
¾Payback period
3-5 years (model case in China)
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Conveyor
Cokes
Energy efficiency technologies of iron/steel industry
- typical examples
TRT (Top-pressure Recovery Turbine)
¾Turbine generator system using the pressure of gas generated in blast furnaces
¾Effects of TRT
- Energy conservation (generation of electricity from conventionally wasted gas)
CO2 emission reduction
BF gas
¾Cost of installation
US$ 20-30 million
DC: Dust Catcher
VS: Venturi Scrubber
DC
VS
¾Payback period
4-5years (model case in China)
VS
Turbine
Hot Stove
Generator
Blast Furnace
Among many energy efficiency technologies, CDQ & TRT were selected because of their energysaving potential, ease of installation, etc. by experts in the steel/iron industry
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Energy efficiency technologies of iron/steel industry
- emission reduction potential in China
CO2 emission reduction potential of specific technologies in China
(Unit: Mt-CO2/year)
Physical
potential
Economically
practical
potential *
CDQ
TRT
Cement Industry
(5 technologies)
Chemical & Oil
refinery
(4 technologies)
4.0
1.0
13.3
8.6
2.0
8.4
5.0
*This means the CO2 reduction potential corresponding to the CER price up to 10$/t-CO2.
Source:
“CDM Potential in the power generation and energy intensive industries in China, A technology-based bottom up study”,
Climate Policy, Vol. 5, Issue 2, 2005, Mitsutsune Yamaguchi, forthcoming
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Factors that affect diffusion of energy efficiency technologies
- demonstration projects
¾The Ministry of Economy, Trade and Industry has implemented 36 projects since 1993
and contributed to the diffusion of energy efficiency technologies in the Asian region.
Kazakhstan
Cogeneration (1)
China
Steel (16: CDQ (1), TRT (1))
Cement (2)
Myanmar
Fertilizer (1)
Power generation (1)
Viet Nam
Cement (1)
Brewery (1)
India
Steel (2: CDQ (1))
Cement (1)
Malaysia
Pulp (1)
Thailand
Steel (1)
Pulp (1)
Industrial waste (1)
Textiles (1)
Indonesia
Pulp (1)
Cement (1)
Power generation (1)
Oil (1)
Steel (1)
*Average project size: approx. US$ 10 -20 million for 2-3 years
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Factors that affect diffusion of energy efficiency technologies
-case study of CDQ in China
¾Demonstration project at a steel plant in Beijing to install CDQ
Period: 1997-2001
Budget: ¥ 2.97 billion (US$ 28 million)
Site: Shougang Corporation, No.1 Cokes Oven
Technical support: Nippon Steel Corporation
Energy conservation: 24,700 toe/year
CO2 emission reduction: 68,300 t-CO2/year
¾Follow-up program of the demonstration project
(on-site seminars, operational advice, etc.)
¾A joint venture between Chinese and Japanese steel companies (Oct 2003)
to design, produce and sell CDQ and other energy conservation facilities
8 CDQ will be installed in China because of this demonstration project
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Factors that affect diffusion of energy efficiency technologies
- implications from case study of CDQ in China
Keys for success
Local steel manufacturers tend to choose investment to increase production capacity,
but this can be changed by:
(1) Awareness of local industry
¾Energy-saving effect
¾Co-benefits such as better air quality (very visible in CDQ)
(2) Initial cost reduction through localization of manufacturing
¾Business strategies, such as IPR, of the investing company from Japan
¾Local competitor
(3) Local environmental policy
¾10th 5-year National Plan in China (target of diffusion rate of CDQ: 60% by 2005)
¾Pressure from local governments (air quality, water usage, etc.)
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Lessons learned
¾The energy-saving potential is enormous. By exploring these
opportunities, a win-win situation can be created: energy security,
lower energy cost, better air quality, higher competitiveness, etc.
This is clear from Japan’s experience.
¾Technology transfer and diffusion are not unilateral actions but
collaboration between developed and developing countries.
•Business incentives for investment: reform of CDM (next slide)
IPR protection
•Local industry’s awareness and host government’s environmental policy
¾Bilateral and multilateral cooperation should have a sectoral focus
which would enable us to enhance technology transfer by clearly
identifying technology needs and energy-saving opportunities.
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Lessons learned
- promotion of CDM activities
¾CDM should be designed to facilitate technology transfer by providing business
incentives for investment in energy efficient technologies.
¾Such CDM projects would contribute best to sustainable development in
developing countries.
<Recommendation>
For host country
- Clear rules
- Collection of accurate data
For developed countries
- Scheme to promote CDM
(ex. financial support, such as Japan’s Upfront Payment)
For CDM Executive Board
- Turning from perfectionism to “learning by doing”
<GOJ’s initiative>
The GOJ has been holding workshops, seminars and establishing WGs for
energy efficiency etc. by CDM experts to identify challenges.
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Thank you for your attention!
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