Survey ReportsCross-border Business Partnerships: Reports from Three Companies
Seeking to Become a Frontrunner in the Field of Renewable Energy, Fukushima Partners with Europe (Part 2)

January 20, 2023

This two-part serial article reports on the recent activities of Fukushima Prefecture ramping up economic exchanges in the field of renewable energy. Part 2 delivers stories about three Fukushima-based small and medium-sized enterprises (SMEs) building collaboration and facilitating the introduction of technology with German and Swiss corporations.

Europe is known for its advanced renewable energy technologies, particularly biogas power generation and ground source heat. Three companies from Fukushima found European partners in this field through the matchmaking by EnergyAgency.Fukushima (EAF), a local renewable energy business support institution (see the regional analysis report dated December 23, 2022).

Fukushima Prefecture has been working to promote industry in the field of renewable energy since the Great East Japan Earthquake. Further expansion of cooperation between advanced European companies and those in Fukushima is expected.

FUJITA Construction Industry (“FUJITA Construction”) (note 1) is engaged in civil engineering and construction as well as renewable energy-related operations. The company introduced a compact combined heat and power (CHP) unit manufactured by Entrenco from Germany (note 2). This system combines biogas power generation using wood pellets with the ability to recover and utilize the heat emitted during power generation.

FUJITA Construction locally collects timber that would otherwise be wasted and processes it into wood pellets to be fed into the CHP unit. There, the wood material is smoked to produce gas fuel for electricity generation. The generated electricity is sold to Tohoku Electric Power using the Feed-in Tariff (FIT) scheme. The heat emitted during power generation is supplied to the company-owned spa facility Spa Hotel Abukuma (visit Spa Hotel Abukuma website ) in Fukushima, where it is used for various purposes, such as heating spa water, hot showers in guest rooms, hydronic floor heating within the hotel building, and road heating for de-icing of outdoor car parking lots.

FUJITA Construction had first learned about Entrade, a predecessor of Entrenco, from EAF Managing Director Yasuhiro Hattori when the company was considering introducing a CHP system. Then, in February 2016, the FUJITA Construction company visited E-world, Europe’s leading energy trade fair taking place in Essen in the western German state of North Rhine-Westphalia (NRW), and took a first-hand look at the Entrade-made compact CHP unit on display. The company was attracted by the product’s compactness and superior performance and started doing business with the manufacturer.

In October the same year, Entrade sent representatives to Japan to sign an agreement with FUJITA Construction for two major purposes: 1. for FUJITA Construction to introduce a compact CHP unit manufactured by Entrade; and 2. for the two companies to start joint research on biogas power generation using wood pellets produced in Japan.

In January 2017, the Fukushima Prefectural Government and the NRW Government renewed the MOU for cooperation in the field of renewable energy. On that occasion, Mitsuo Fujita, then president of FUJITA Construction (currently Chairman), visited Germany as a member of a governor-led delegation. During his stay, the CEO of Entrade at the time made a presentation to the delegation about the cooperation with FUJITA Construction using the opportunity afforded by the inter-municipal event.

In July of the following year, 2018, the CEO visited Japan to sign a business alliance and agency agreement with FUJITA Construction. Since then, FUJITA Construction has been a sales agent for the German company in eastern Japan, even after it restructured into Entrenco (note 3).

FUJITA Construction faced some challenges in implementing the CHP system. One of the biggest challenges was related to the different concentration of components in the wood commonly used for this purpose in different countries. Japanese-produced wood is unsuitable for the target process because it causes potassium and calcium-binding substances when burned, resulting in unwanted fouling in the system. To address this issue, the company first visited a wood pellet mill in the suburbs of Edinburgh, UK, and then formed a joint research team, inviting a chemist from Germany and a specially appointed professor (in engineering) from Fukushima University to join Moritz Husmann, CTO of Entrenco. After three years of efforts, the three-party team successfully developed Japanese-produced wood pellets that are suitable for use in the CHP system.

In working with Entrenco (formerly Entrade; note 3), FUJITA Construction also utilized JETRO’s RIT Program (note 4).

The two companies have continued with technical exchange until today. Ryuichi Tachihara, Advisor (renewable energy team) expressed his appreciation for the external support, specifically citing the referral from EAF Managing Director Hattori, which enabled the establishment of a good business relationship with Entrenco, as well as networking efforts to connect people and technologies.

Misawa Environmental Technologies (“Misawa Environmental”; headquartered in Miyoshi, Hiroshima; note 5) is a developer of ground source heat pump systems and other related technologies. The company has a sales office in Aizuwakamatsu, Fukushima.

A ground source heat pump system uses natural heat from the ground at more than ten meters below the earth’s surface, primarily to heat and cool above-ground structures. The temperature of the earth at such depths is generally equal to the average yearly temperature of the relevant aboveground area. Taking advantage of this, the heat pump system sources heat from underground and transfers it into the inside of buildings to keep the indoor space at a constant temperature throughout the year, so that the indoor environment is cooler in summer and warmer in winter than the outside air. In Europe, this mechanism has been used since early on to develop energy management techniques to enable efficient indoor air conditioning. These techniques began to be imported to Japan around 30 years ago.

Misawa Environmental conducted research on European ground source heat pump technologies, specifically for ground source heat exchangers and piping configuration, using the renewable energy research support program hosted by Fukushima Prefecture. At the same time, the company pursued partnerships with three European companies—two from Germany for business cooperation and one from Switzerland for the introduction of technology.

The first partnership was established with Bode, a German-based consultant specialized in energy supply system management for residences and offices. Misawa Environmental was referred to the German company by EAF and visited its head office in February 2019. Bode provided technical guidance on German energy management methods for energy conservation diagnosis, operational improvement strategies, refurbishment planning strategies, and other issues.

Bode also introduced ETU-Simulation, a software program Bode uses for HVAC design. The program was designed to allow the user to simultaneously calculate two major variables: air-conditioning load (thermal output capacity required to sufficiently heat or cool the entire space of a certain area) and heat exchangers and heat source capacities required for ground source heat recovery. This technology was outstandingly advanced compared to similar programs available in Japan at the time, which offered the former function only, being incapable of supporting the latter.

Misawa Environmental decided to tackle this challenge and contacted Hottgenroth Software (“Hottgenroth”), the Germany-based developer of the software, through Bode. This resulted in Misawa Environmental’s second partnership with a German company, which started in April 2020. Within this framework, a joint project is currently underway to develop the Japanese version of ETU-Simulation. This is part of the preparation for selling the software to Japanese HVAC suppliers and launching a project to offer Bode’s energy management consulting services to Japanese customers.

The highlight of the technical expertise provided by Bode and Hottgenroth is that it allows the visualizing and quantifying of thermal energy transferred into and out of a building so that the resulting data can be used for considering energy-saving strategies. Misawa Environmental wants to apply this expertise to develop and market products suited to Japanese HVAC systems. To this end, the company is planning to combine self-developed ground source heat pump processes with those of German companies. Through this, the company also hopes to contribute to increasing energy efficiency and energy conservation in Japan as a whole.

In addition to collaborating with these German firms, Misawa Environmental also moved forward in a project with the Swiss company Jansen, a piping systems manufacturer. Misawa Environmental first encountered the piping specialist in February 2019, in the geothermal energy-related industry exhibition GeoTHERM, held in the southern German city of Offenburg. Misawa Environmental became interested in Jansen, an exhibitor, and started business with the company. Misawa Environmental has begun to import Jansen’s heat exchangers to Japan, applying them to HVAC systems, which are currently subject to verification testing. However, the diameter of the pipes used in the heat exchanger and the durability of the pressure applied to the pipes buried underground could not be applied directly to European standards. Therefore, they had to go through the process of adapting Japanese standards.

Misawa Environmental developed relationships with European companies for business cooperation and technology introduction, utilizing support programs of the Fukushima government and local institutions. Masato Tanaka, Managing Director, shared his views and aspirations with enthusiasm about the ground source heat industry, taking note of Fukushima running ahead of other prefectures and expressing the company’s wish to contribute to the local and national development of the industry.

Kyoei (note 6) is engaged in sales of building and engineering materials in Fukushima Prefecture. After the Great East Japan Earthquake occurred in 2011, the company began to develop its renewable energy and energy conservation operations in earnest. The company places a particular focus on methane fermentation biogas power generation using livestock excreta collected from local farmers, and has introduced necessary biogas power generation systems as well as equipment to purify methane fermentation residue resulting from the process for the purpose of recycling (note 7).

Specifically, in November 2019, Kyoei purchased a test biogas plant for methane fermentation manufactured by German-based PlanET Biogas (“PlanET”). The plant was installed in a livestock farm in Kawamata, Fukushima, and it was confirmed that the machine was performing well with livestock excreta collected locally.

Kyoei first encountered PlanET in October 2019 at REIF Fukushima, a renewable energy industrial fair hosted by the prefectural government, where the company was referred to the German manufacturer by EAF. Since that time, the two companies have continued a close relationship over these years, visiting each other in their respective countries, including during the period when it was difficult due to the COVID-19 pandemic. Going forward, the company plans on purchasing PlanET’s plants for sale and launching biogas power generation operations in the Japanese market.

Kyoei will also import compact power generators for methane fermentation biogas power generation from 2G Energy, a German supplier. This development was also facilitated through the mediation of EAF.

It is suggested that the biogas power generation business using livestock excreta can grow well in Fukushima, where livestock farming is one of the major regional industries. However, the suggestion was not properly adopted to create an actual plan, largely because the sector is predominantly composed of small-scale farmers, which previously posed a number of challenges related to the cost of plant installation and farmland area for spreading liquid manure. By employing small-size biogas plants made by PlanET and compact power generators supplied by 2G, Kyoei is seeking to overcome these challenges and develop a local market.

Hisanobu Suzuki, managing executive officer (in charge of sales) of Kyoei, provided details about the related plans. According to a rough estimate, 300 heads of livestock produce a daily average total of 18 tons of excreta, which can be effectively utilized to generate 50 to 70 kilowatt-hour (kWh). This is more profitable than when the same amount of excreta is directly used as fertilizer. However, Fukushima’s standard livestock farm raises 30-40 heads on average. The company is considering more than one solution to this situation, including expanding the target market to outside Fukushima, collecting excreta together from several farms concentrated in one area (often found in Fukushima), and expanding the scope of source materials to other organic substances suited to methane degradation, such as food residue. Suzuki emphasized the importance of establishing an effective method of collecting raw materials, looking at the possibility of introducing biogas plants to municipal facilities, retail stores, and other places, in addition to farms.

Notes:

* The original report in Japanese