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Japan sees opportunity in the Earth's percolating heat

Indonesia is employing Japanese technology to tap its abundant geothermal resources.

TOKYO -- Fifty years ago, Japan's first geothermal power plant went online. Now with the world thirstier than ever for renewable energy, the country's decades of experience in the field is presenting a big export opportunity.

This is one reason why Japanese companies find themselves in the middle of a rain forest in the Indonesian province of North Sumatra, about an eight-hour drive from provincial capital of Medan.

They are developing a plant that, once completed, will be the world's largest single geothermal power station. All together, the three facilities at the Sarulla plant will be able to generate 320,000kW of electricity. The No. 1 unit is already steaming ahead of its official launch by the end of the year.

"This might become a geothermal hot spot," one industry official said.

The huge project will cost more than $1.6 billion. Trading house Itochu and Kyushu Electric Power each have a 25% stake in the special purpose company responsible for the plant's construction, maintenance and operation. Inpex, an oil and gas developer, has 18%, and the rest is owned by Medco Power Indonesia, a major resource company, and other parties.

The Kyushu Electric group is an internationally recognized geothermal development consultant.

The turbines at the heart of the power units are made by Toshiba, the Japanese electronics maker. Alongside Mitsubishi Hitachi Power Systems, Toshiba is the world's top supplier of geothermal turbines, controlling 22% of the market.

Since subterraneous steam contains hydrogen sulfate and many other chemicals, "the turbines need to be even more durable and anti-corrosive than ordinary thermal power turbines," explained Kenichiro Furuya, group manager of Toshiba's Thermal & Hydro Power Systems & Services division.

It took a few years

Japanese companies first began gathering technological geothermal expertise at the Matsukawa power plant in Hachimantai, Iwate Prefecture.

Japan's first commercial geothermal plant is in a sulfurous hot spring area deep in the mountains. About 800 meters to 1,600 meters below the plant's impressive 46-meter cooling tower sits a steam pool where groundwater is heated by magma. Steam from the pool drives the turbines, which generate electricity.

The station was originally built by Japan Metals & Chemicals. The company began studying the area in 1956 with the help of the Agency of Industrial Science and Technology, now the National Institute of Advanced Industrial Science and Technology. The 2 billion-yen ($18.5 million at today's rate) project suffered a series of problems, a company official said. For instance, workers had to repeat a cycle of drilling a few hundred meters down, then stopping to check where the steam was.

Toshiba supplied the turbines, which began turning in October 1966 -- 10 years after the project began. The station's initial output capacity was 9,500kW, about 40% of today's 23,500kW.

Another of the problems was rock dust that accompanied the steam and sometimes broke the turbines. That's right: Clean energy isn't always clean.

It took a few years to stabilize operations.

The plant is now operated by Tohoku Natural Energy Development, an affiliate of Tohoku Electric Power.

Advatage, geothermal

The struggles in Hachimantai have helped the development of other geothermal power plants across

In Japan's Iwate Prefecture, the Matsukawa geothermal power plant's cooling tower stands 46 meters tall.

Japan. In the 1980s and 1990s, development spread in northeastern Japan and on the southern island of Kyushu -- two areas with vast geothermal resources.

Japan now has 14 geothermal power stations.

However, geothermal has never become a mainstream energy source. Compared to conventional fossil-fuel power stations, geothermal plants produce less power and take longer to build.

In 1966, when the Matsukawa plant finally went into service, Japan's first commercial nuclear power plant -- the Tokai power station, in Ibaraki Prefecture -- also began operating. Japan's geothermal energy development lost momentum in the mid-1990s as utilities opted for reactors and state subsidies dissipated.

With Japan nodding to nuclear, the geothermal industry shifted overseas.

The tide changed after the March 2011 earthquake that devastated northeastern Japan and the subsequent tsunami that crippled the Fukushima Daiichi nuclear power plant. Following the triple meltdown, Japan shut off all of its nuclear power stations.

The introduction of a feed in tariff system for renewable energy the following year also worked to geothermal's advantage.

Outsmarting overseas rivals

The cliche about Japan being resource-poor isn't exactly true; it has the world's third largest
geothermal "reservoir." To make the most of the pool's potential, the government in 2012 loosened regulations to make it easier to build geothermal power plants.

Though eclipsed by the solar industry after the feed in tariff system kicked in, geothermal is gradually gaining ground. A few dozen development projects are now underway.

The Agency for Natural Resources and Energy estimates that in 2030 domestic geothermal power output capacity will reach 1.4 million kilowatts, almost triple the amount today. Although that will still amount to a mere 1% of the overall power produced in the country -- up from the current 0.3% -- it will be a meaningful step forward.

Hopes are growing for Japanese companies to tap not only Southeast Asia but also Latin America. Japanese players are also helping Africa exploit its geothermal resources.

Thanks to growing environmental concerns around the world, global geothermal output is projected to swell from 12 million kW in 2015 to 21 million kW in 2020.

Japan wants multiple slices of this pie. And Katsumi Hironaka, deputy general manager of Mitsubishi Hitachi Power Systems' International New Energy Business Management Department, says they are there for the taking.

"We will," he said, "outsmart overseas rivals in maintenance, too."

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