The will to choose renewable energy – What we learn from the difference between Germany and Japan

greenz.jp

greenz.jp

This article is made by greenz.jp and Shizen Energy Inc. (reprinted from greenz.jp

 

What comes to your mind when you hear of the country, Germany? Beer, sausages, German fried potatoes. Majestic castles and classical music. Personally it has been 10 years already since I first set my mind in going to Berghain, the world’s legendary nightclub. For those of you who are interested in energy matters, perhaps the impression of Germany is that it is an “environmentally advanced country”?

In Germany, the government has decided on the broad policy to phase out nuclear power by  2022, and as of the year 2017, more than 30% of the electricity consumed by the entire population is already generated by renewable sources. On the other hand, in Japan, renewable energy sourced electricity consumption has just reached 15% (including large scale hydraulic power generation). It is about half of the situation in Germany. What exactly is the  difference between these 2 countries?

We interviewed Jan Warzecha. He worked as a business management consultant for 10 years before joining juwi AG, the world’s top level German company in the area of renewable energy, and was responsible in the areas such as R&D, business development, and the construction of solar & wind power plants. We threw our questions about renewable energy in Germany at Jan who is knowledgeable on this topic not only as an expert but also as a German citizen.

What we found through the interview was the difference in the systems and the awareness of people between the 2 nations. The strong intention of each individual moving the country and its business – Germany is a role model of democracy in action.

Jan Warzecha
Representative Director, juwi Shizen Energy Inc.
Representative Director, juwi Shizen Energy Operation Inc.
After finishing his university studies, Jan gathered experience for 9 years at the Europe based OC&C strategy consultants in business consulting. He developed strategies involving logistics, marketing, M&A, etc. for a wide range of industries.
In 2007 he joined juwi AG in the function of corporate development.
Between 2007 and 2016 he held different responsible positions within the juwi group in Germany & EMEA, in the areas of R&D, business development, and engineering & constructions of wind & solar.In 2016 Jan joined juwi Shizen Energy and became the Representative Director of juwi Shizen Energy & juwi Shizen Energy Operation in December.
Jan combines strategic and analytical skills based on his 10+ years of experience in renewable energies with his managerial experience and a strong technical background.
Jan holds a PhD in Physics from the Johannes Gutenberg University of Mainz.

The professionals of creating and operating renewable energy

We started this interview by asking him about his current job.

Shizen Energy Inc. (hereafter “Shizen Energy”) is comprised of several group companies and offers a full turnkey service from the development to maintenance of a power plant. Jan is the representative director of juwi Shizen Energy Inc. (hereafter “juwi Shizen Energy”) and juwi Shizen Energy Operation Inc. (hereafter “juwi Shizen Energy Operation”) which are joint venture entities between Shizen Energy and juwi AG.

juwi Shizen Energy provides EPC services for renewable energy plants, and that mainly for solar.  EPC stands for Engineering, Procurement, and Construction -and we are expertised in the actual construction of power plants generated with renewable resources. juwi Shizen Energy Operation takes on the role of the operation and maintenance of the renewable energy sourced power plants after they are constructed.

It is quite difficult for us though to imagine what exactly does “construction of power plants” involve, isn’t it? What kind of work is it specifically?  

Generating electricity with renewable sources require several stages: Selecting the suitable generation method by examining the land conditions, holding meetings and briefing sessions with neighboring residents to gain their understanding and cooperation, preparing various permits and licenses which are required for the construction, and more. We can start the construction of the plant only when all the prerequisites are arranged.

Before starting the construction works, we design the layout and azimuth of the modules to make the best use of the site for an efficient generation, procure the components necessary for completing the power plant such as modules and the racks to fix the modules, and finally are able to start the construction itself with heavy machineries and tools. Of course, we need the craftspeople to take on the executions well. Once the construction is completed, we actually start generating electricity with adequate operation and maintenance procedures.

There were very few know-hows about EPC and O&M of renewable power plants in Japan up until few years ago. It can be said that Shizen Energy, which was established in 2011, was able to secure the top-level quality from the early stages by collaborating on such businesses with juwi, which was founded in 1996.

The situation is changing – Nevertheless, the future of renewable energy is bright

So, we’d like to ask Jan-san from here about the situation in Germany. I have an impression that more and more renewable energy power plants are being constructed in Germany… but is that true?  

In Germany, more than 30% of the total power generation is sourced from renewables. In Japan, its percentage is 15% including large hydroelectric, but the number drops to 7% without counting large hydroelectric. However, when looking at the amount of the solar power generation newly installed in a year, it is larger in Japan. In Germany, the pace has been significantlyslowing down since 2013.

What are the reasons for this? Making preliminary remarks saying that there were several factors hence unable to trace it to just one factor, he explained the different points.

After strong cuts in FIT level already in 2013, in summer of 2014, the German government replaced the FIT (Feed-in Tariff) with the bidding system. With this, the capacity of solar installation was restricted by the state. And as a result, the number of annual solar installation in Germany declined, and the solar market expansion shifted to other countries, now mainly the U.S.A., Japan, and China.

I wonder if the pace will slow down even here in Japan…

As a fact, it has been slightly slowing down already even in Japan compared to 1 or 2 years ago. In the case of Germany, the number of new solar installation started to drop after a sizable peak, whereas in Japan, it’s currently only slightly slowing down . This is understandable if you know the obstacles for expanding renewable energy in Japan to begin with – the construction is more difficult due to the landscapes because many areas are mountainous here unlike Germany, and permitting is complicated. However, I still have high expectations for the Japanese market. I have been involved in solar power generation for over 10 years now, and the generating cost of renewable energy has been reduced significantly thanks to great deals of efforts made by various researchers and enterprises. I feel that the improvement in the economic performance of renewable energy strongly contributes to spreading solar power generation. As a power producer, we need to continue cutting costs, and by doing so, solar power generation will become more widespread even in Japan too. Although it is a fact that the pace of installation has been slowing down, no one can stop the wave of renewable energy. It’s only a matter of whether the change occurs quickly or slowly. 

The momentum of renewable energy shifts policies of major utilities

I felt relieved somehow to hear his encouraging words. Is there anything we can do to further drive renewable energy in Japan?

 

Firstly I feel all in all that it is important to purchase electricity from renewable energy sourced power companies. Actually Shizen Energy is now retailing electricity too. When I was in Germany, I myself also used to buy electricity from a retailer providing electricity sourced 100% from renewable energy.

To demonstrate that “we want clean energy” not only with words but through our purchasing behavior. In Germany, the voices and the actions of the people are changing thelandscape of the major utilities.  

In Germany, companies who have newly entered the power generation market in recent years are all renewable energy power generators, and they are growing rapidly. On the contrary, there has also even been phenomenons where stock prices of the so-called major utility companies are dropping. Everyone has no choice but to accommodate themselves to the change in society of people wanting renewable energy. You can see this clearly when you go to their websites. In the past, their selling points were reliability and low cost. But nowadays, they have started introducing renewable energy and communicating images such as“green” and “nature” to portray themselves as being environmentally friendly.

Japan vs. Germany – Key differences are “mechanism” and “top-down approach”

The voice of each individual changing the direction of major utilities. Is the reason why renewable energy is more wide spreading in Germany than Japan because the German people are more highly environmentally conscious?

Yes, it is true that German people are highly aware of environmental and energy issues. The Rhine was badly polluted when I was a child, but it is now so clean that it looks like it is a different river. There were also air pollution caused by the smoke from factories, etc., but those kinds of problems have been reduced with strict environmental regulations. However, it’s not that German people are extremely more conscious than the Japanese people. We have strict rules on separating garbage for disposal, but the people in Tokyo separate them in more detailed categories and the people all put it into practice. I don’t think Japanese people are low in environmental awareness. 

I felt relieved again to hear this comment (laugh). If there are no huge differences in the environmental consciousness between the people, then are there differences in regulations and social structures?

One thing that Germany was more advanced compared to Japan was that, for instance, we decided by law to phase out nuclear power as the country’s policy, and made a considerable investment in renewable energy. Sometimes, things are more efficient when the government shifts their fundamental policies with a top-down approach. Each individual’s effort to save electricity is of course important, but it’s not realistic to turn off the AC in the summer in Japan, is it (laugh)?

A major top-down decision was made by the government in Germany. Angela Merkel, who was pro-nuclear then, triggered by the Great East Japan Earthquake and the nuclear accident, legislated the phase-out of all nuclear facilities in Germany by the end of 2022 within only 4 months in its aftermath.

I think Angela Merkel has great sense in understanding the majority. In reaction to what had happened in Japan, she astutely took notice of the surge in society. At the time, even in Germany the majority was pro-nuclear in the industrial world and the renewable energy business didn’t have much influence. But still, she made a judgment that people were desiring renewable energy rather than nuclear power, and translated it into action immediately. If somebody else was the prime minister then, we may have had a totally different reality now.

The power of believing the individual’s will moves the country and changes companies

In the case of Germany, the growth of renewable energy and the the shift of the country’s energy policy have been closely related. And the decision to completely turnaround their energy policy was made by listening to the voice of the people. If you think of it in this way, there must be something we can learn from the German people.

In the 1970s when I spent my childhood, there were already lively discussions and demonstrations, etc. on environmental and energy issues out there. My father was taking environmental issues seriously as well, and it was in 1980 when the environmentalist political party, the Green Party, was born.

So, the thoughts you have on tackling addressing environmental issues, does it originate from the influence of your parents? He mentions that he has certainly been influenced, but at the same it is based on a much stronger, own will of his.

In Germany, individuality is well respected. We firmly believe in our own decisions. This is what we learned from WW2. It’s the spirit of being rebellious – to act out on what you believe in, instead of being influenced by huge powers. For instance, if the natural environment is precious to you, you should cherish the feeling. That’s why, for example, you choose to pay and buy renewable electricity even if it’s a little more pricey. Life is made up of what you were convinced with and the decisions you made following what you believe in.‘What you choose’ is the ‘result’ of what you have experienced and how you were influenced by experiences and people around you. Amongst the early pioneers of renewable energy in Germany – wind and solar – you find many critical independent minds.

There are many people who are highly aware of the environment in Germany. But, not just being aware, they take actions in belief of their own decisions. And the politicians representing their people grasps the will of the people, and, as a result, the country changes. And the companies change too.  We can see here a process that is so as to say, a role model of democracy.

Even in Japan with the deregulation of electricity, we are now in the era where we can choose utility companies. Some say how you spend your money is similar to whom you vote. Yes, we can freely decide what to buy from whom. We can choose to buy something which may be a little bit more expensive but one that makes you satisfied. If that’s the case, you mind as well do some pleasant shopping like this one don’t you think?

Just applying the changes and mechanisms which took place in Germany as-is to Japan, may not be the correct answer. But still, there are undoubtedly some things which we can learn from Germany. That is what I believe in.

 

written by Shintaro Kuzuhara