Village Power Opportunities and Challenges 20th Meeting of the Expert Group on New and Renewable Energy Technologies November 4-6, 2002 Seoul, Korea Ms. Mirei Isaka International Cooperation Center NEDO Mr. Masatoshi Ikumi Energy Conservation and Renewable Energy Dept. Agency for Natural Resources and Energy METI 1

Outline 1. New and Renewable Energy Targets 2. Policies for Development and Introduction of New Energy 3. NEDO’s Role in Japan’s New Energy Scheme 4. NEDO Activities to Promote the Local Introduction of New Energy 5. International Activities by other Japanese Organizations 6. Adoption of a Programmatic Approach 7. Lessons Learned 2

- 19,100 (about 3%) - 7,220 (about 1%) New Energy Total (Ratio of total primary energy supply) Unused Energy (Including Cooling by Snow & Ice) -4,940-4,900 Black Liquor, Waste Wood, etc Biomass Thermal Biomass Generation Waste Thermal 4,1705,5201,0301,150Waste Power 3,0001, Wind Power -4, Solar Thermal 4,8201, Photovoltaic (Solar Power) MW1,000 x klMW1,000 x kl Installed Cap.Oil Equiv.Installed Cap.Oil Equiv. FY 2010 Target on New Energy Introduction (Revised) FY 2000 Results Energy Sources Total primary energy supply (in million kl) 604 Mkl- about 602 Mkl - 1. New and Renewable Energy Targets 3

(Budget for FY2002: about \38.8 billion ≒ US$310 million) Fundamental investigation Development for practical application (Budget for FY2002: about \10.0 billion ≒ US$80 million) Field test Demonstrative research (Budget for FY2002: about \96.1 billion ≒ US$769 million) Creation of initial demand for inducing market independency Creation of environment suitable for introducing leading-edge new energy systems Financial support (Tax system, Fiscal investment and Loans) The Green Purchase Law Enlightenment and public information activities New market development mechanism ～ RPS (Renewable Portfolio Standard) Ⅰ． Technological Development Ⅱ． Demonstration Test Ⅲ． Promoting Introduction (full utilization of market mechanism) (in million US$) 1,4491, Budget (in 100 million \) FY2002FY2001FY2000FY1999FY1998FY1997 Fiscal year ,159 ※ US$1 ＝ \125 ※ Policies for Development and Introduction of New Energy 2. Policies for Development and Introduction of New Energy 4

3. NEDO’s Role in Japan’s New Energy Scheme 5

4. NEDO Activities to Promote the Local Introduction of New Energy Examples: Domestic Project for Establishing New Energy Visions at the Local Level Project for Promoting the Local Introduction of New Energy Grassroots Support Project for New Energy International Cooperative Demonstration Projects 6

Project for Establishing New Energy Visions at the Local Level (FY1998 ~ ) FY2002 Budget: 1.23 billion yen Objectives: To Facilitate Efforts of Local Public Entities to Ensure (1) Effective and Smooth Introduction of New Energy, and (2) Successful Diffusion, Public Education and PR Activities Subsidies for: Establishing "Visions" for New Energy Introduction at Local Level Conducting F/S on the Commercial Viability of Individual Projects Implementation Progress: 556 Locations Nationwide (as of October 2002) 7

Project for Promoting the Local Introduction of New Energy (FY 1998 ~ ) FY 2002 Budget: billion yen Objectives: To Promote / Accelerate the Utilization of New Energy Subsidies for: Local Public Entities to Cover Necessary Costs for Advanced New Energy Utilization Projects that are Highly Influential on Other Local Public Entities Diffusion and Public Awareness/PR Activities Implementation Progress: Kuzumaki Town, Iwate Prefecture 8

Grassroots Support Project for New Energy (FY 2000 ~ ) (1) FY 2002 Budget: 1.02 billion yen Objectives: To Support New Energy Introduction Projects Conducted by the Private Sector, NPOs, etc. Qualifying Projects: 1.Equipment Introduction Projects 2.Support Projects for the Introduction of Equipment 3.Awareness-building/PR Projects 9

Grassroots Support Project for New Energy (2) 10

International Cooperative Demonstration Project (1) A fully charged battery provides lighting for a week “Demonstrative Research of Photovoltaic Generation System for Battery-Charging Stations” Kanchanaburi Province, Thailand: Budget: 316 million yen The Sunlight made Nighttime Pleasant ! Battery-Charging Station 11

Battery-Charging Station Using a charged battery at home “Demonstrative Research of Photovoltaic Generation System for Battery-Charging Stations” (2) 12

5. International Activities by other Japanese Organizations Efforts by JICA Programs for the provision of experts, training programs Overseas development programs and studies (including pilot projects) Efforts by JETRO Global Environment / Plant Vitalization Study Efforts by MOFA (Ministry of Foreign Affairs) Grants-in-aid Efforts by JBIC Yen loan in special environmental interest rates (ODA) Export credit and untied loan in semi-commercial interest rates (non-ODA) 13

For effective cooperation and achievement of business- based diffusion, a Programmatic Approach has been adopted to target sustainable, long-term diffusion. 6. Adoption of a Programmatic Approach Taking the form of a series (program) of projects, from the creation at the planning stage of a master plan, implementation of feasibility studies and validation by means of pilot projects, through to diffusion. Comprehensive schemes incorporating the education and training of personnel necessary in policy and organizational terms for submitting proposals. 14

Programmatic Approach Concept Commercial Programs Cooperative Research Development Study (Master Plan) Grants-in-Aid Yen Loan Provision ＮＥＤＯ ＪＩＣＡ ＭＯＦＡ (JICA) ＪＥＴＲＯ ＪＢＩＣ Close cooperation between each scheme (and building stronger partnerships with international organizations) Ｍａｒｋｅｔ Technical Assistance (Dispatch of experts, Training programs, Project- based technical cooperation, Seminars, etc…) F/S for Diffusion Detailed Study (for project formation, etc.) ＪＩＣＡ, etc. Cooperative Demonstration Rural village Solar, Wind Micro hydro Biomass Geothermal, etc. Urban city Economic growth, Environment For BHN, Social developmentIndependent systems Hybrid Grid connected LDC Low income Middle income High income Status for systems (Law, Budget,Tax, Loan system, etc.) Accurate understanding of the counterparts’ needs, priorities, natural / economic conditions, etc. 15

7. Lessons Learned 16 Clarifying the Objective of the Electrification Project Coordination with the National Electrification Plan Strengthening Capability and Clarifying Roles and Responsibilities of each Party Constructing a Sustainable Business Model

Thank You! 17