Hioki’s Smart Community and Japan’s Structural Reform Study Notes
Introduction to Hioki’s Smart Community and Japan’s Structural Reform
Author: Andrew DeWit
Source: The Asia-Pacific Journal | Japan Focus
Volume/Issue: 14/15/10
Date: August 2016
The Role of Energy in Economic Activity
Energy is described as the "master resource," essential for:
Resource extraction
Material production
Mobility
Economic activity overall
There are significant positive and negative externalities associated with the current energy economy, necessitating reform.
Global Energy Revolutions
The global energy system is undergoing several revolutions aimed at:
Disaster resilience
Low-carbon infrastructure
Distributed heat and power systems
Japan aims to become a leader in this movement, particularly following the 2011 disasters (3-11).
Japan's Energy Policies
Japan has numerous energy policies, many of which:
Are contradictory
Risk creating stranded assets
Increasingly, Japan's energy regime is being shaped by a pragmatic technocratic paradigm which focuses on:
Diffusion of renewable energy and efficiency
Enhancing disaster resilience
Economic revitalization
National security
Socioeconomic equity
This narrative acts effectively on energy and climate externalities and emphasizes a “whole of government” approach for rapid responses to crises.
Hioki City as a Case Study
Overview of Hioki City
Population: 49,056 (2016)
Located in Kagoshima Prefecture, southern Kyushu, Japan.
Borders:
Kagoshima City (population: 598,936)
Satsuma Sendai City (population: 95,513)
Hioki typifies Japan’s mid-sized peripheral regions.
Challenges Faced by Hioki
Economic and population decline since the 2000s, exacerbated by:
Reduction in operations at local Panasonic factory (2011)
Demographics:
Population drop from 52,411 (2005) to 49,056 (2016), expected to decline to 47,261 (2020) and 29,000 (2060).
Elderly population increasing from 27.9% (2005) to 31.1% (2015), rising to 33.7% (2020) and 39.7% (2060).
Increased vulnerability in elderly households, especially single-person households (28.7%).
Local Energy Projects as a Response
The 3-11 disasters prompted fresh local energy initiatives.
Significant local renewable energy capacities identified:
Solar, wind, small hydro, etc.
Establishment of the Hioki Wind Power Corporation (2013) with:
Investment of JPY 2.4 billion
Operational capacity of 6.9 MW (3 turbines of 2.3 MW each).
Government grants for small-hydro projects were established to encourage renewable energy.
Hioki’s Smart Community Plan
Collaboration: Hioki City and area businesses formalized their partnership in 2015, aiming to develop a smart community.
Hioki Local Energy Corporation launched in November 2015.
Begins operations in August 2016 with a 3% discount compared to Kyushu Electric and commits 1% of proceeds for local revitalization projects.
Project includes a Compact Energy Network that links local facilities through compact grids centered around:
Energy management systems (EMS)
Cogeneration and solar inputs
Expected outcomes include:
Energy efficiency improvements
Disaster resilience
Reduction in greenhouse gas emissions.
Compact grids proposed include:
Grid 1: Links municipal facilities; solar power and storage managed to reduce peak demand and provide disaster power.
Grid 2: Connects hot springs and healthcare facilities; includes cogeneration capabilities.
Grid 3: Integrates a factory cluster with substantial cogeneration capacity.
Funding and Feasibility Studies
Hioki's project awarded a grant in June 2016 for feasibility studies.
2016: Survey and planning
2017: Master plan completion
2018-2019: Installation of generation and storage systems
2020: System operation begins for 20 years.
Involvement of Taiwan Gas, Kagoshima Bank, and several SMEs.
Government Subsidy Programs
METI initiated a new subsidy program valued at JPY 4.5 billion to encourage distributed energy systems.
Challenges historically include high costs, leading METI to incentivize distributed, renewable energy.
The program aims to develop business services and improve overall system efficiency by at least 20%.
Comparison with Other Initiatives
Other notable smart community projects in Japan include:
Kitakyushu
Keihana
Yokohama
Toyota City
Panasonic at Fujisawa
Significant differences between these initiatives and past private-sector projects focused on generating FIT-subsidized solar power.
Japan struggles with high solar energy costs compared to global competitors, prompting a shift in strategy to incorporate diverse energy sources and local consumption rather than relying on the grid.
Strategic Plans for National Resilience and Local Development
National Resilience Plan (NRP)
Aimed at improving the nation’s resilience to disasters while promoting recovery capacity.
Integrates various measures based on national and international best practices.
Focus on advancing smart community and energy management as part of resilient infrastructure.
National Spatial Strategy (NSS)
New strategy reflecting changes in priorities post-3-11, emphasizing:
Climate change
Smart communities
Energy resources
Characterized by inclusive involvement of various stakeholders promoting a holistic approach to planning.
Conclusion
Hioki’s project demonstrates a significant shift in Japan's approach to energy policy post-3-11, evidencing structural reforms aimed at enhancing disaster resilience and sustainable development.
Heightened attention to renewable energy and local involvement suggests Japan may lead in developing disaster-resilient infrastructure in the future, supporting a robust push towards a low-carbon economy.
References
Nicholas Stern, Why Are We Waiting? The Logic, Urgency, and Promise of Tackling Climate Change, MIT Press: 2015.
Full statistical data and policy references pertinent to Hioki’s projects available through included hyperlinks and cited documents.