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Team of rivals sets out to build first hydrogen supply chain

Kawasaki Heavy Industries built this hydrogen liquefaction plant in autumn 2014.

TOKYO -- Big Japanese companies are setting aside rivalries and working with the government to make hydrogen a mainstream fuel.

     The country's New Energy and Industrial Technology Development Organization, a state-funded body known as NEDO, in June launched an initiative to produce and store hydrogen abroad, then transport it to Japan for use as fuel. It is collaborating with major industrial plant builders and general contractors to create large-scale, hydrogen-based power generation systems.

     Essentially, they are attempting to create the world's first comprehensive hydrogen supply chain.

Executives from companies involved in NEDO's hydrogen initiative show some team spirit in Tokyo on June 9.

     "Although some of the participating companies might be rivals, we want all of them to cooperate to create a society where hydrogen [will become an important source of energy]," said Munehiko Tsuchiya, NEDO's executive director, at a news conference June 9.

     NEDO plans to spend a total of 40 billion yen ($326 million) on the initiative over the six years through fiscal 2020, which ends in March 2021. It will preside over four projects, in which seven companies will take part. Kawasaki Heavy Industries and Chiyoda, which compete directly in some sectors, will both play key roles.

     Kawasaki Heavy will produce the gas in Australia, using inexpensive brown coal as fuel. It will liquefy the hydrogen by cooling it to minus 253 C. The company will then ship it in a special, yet-to-be-developed tanker.

     "We developed Japan's first hydrogen liquefaction equipment in November last year and are making steady progress," said Motohiko Nishimura, a senior official in charge of the hydrogen project at Kawasaki Heavy.

     Because there are no established regulations for transporting liquefied hydrogen by sea, Kawasaki Heavy intends to work closely with maritime authorities. 

Chiyoda, which built this pilot hydrogen extraction plant, aims to construct a much larger facility.

     Chiyoda will also produce hydrogen abroad. It plans to mix the gas with toluene to turn it into a liquid chemical, which existing tankers can carry. In Japan, the company will isolate hydrogen from the chemical in a process that requires intense heat. This will be Chiyoda's development challenge: creating durable equipment that can withstand high temperatures and extract hydrogen efficiently.

     A Chiyoda manager working on the project said his company is just getting warmed up. "We will build a hydrogen extraction plant that will have several hundred times the capacity of our existing demonstration equipment," he said.

Cars? Think factories

Neither Kawasaki nor Chiyoda is particularly interested in providing hydrogen for fuel cell cars, which hit the market late last year. They want to make hydrogen the power source of choice for large-scale industrial operations.

     "Power generation using hydrogen and natural gas can reduce carbon dioxide emissions by 6% compared with systems that use natural gas alone," said Satoshi Tanimura, a senior engineer at Mitsubishi Hitachi Power Systems, another company involved in the initiative.

     Mitsubishi Hitachi is developing a gas turbine that burns hydrogen and natural gas to generate some 300 megawatts of power. Hydrogen accounts for 20% of the fuel used.

Long time coming

Japan's Ministry of Economy, Trade and Industry wants to make hydrogen a major fuel for power generation by 2030. The current domestic supply of the gas is mostly derived as a byproduct of steel and petrochemical production. This is unlikely to be enough once hydrogen-based power hits its stride. This is why Japan is pursuing overseas production.

     NEDO was established in 1980, following the dual oil crises of the 1970s. Tasked with developing alternative energy sources, the organization has been looking into hydrogen since day one. 

     The current initiative is to run through 2020, the year Tokyo will host the Summer Olympics. There have been proposals to deploy fuel cell buses and use hydrogen to power the athletes' village. If all goes according to plan, Japan could seize a prime opportunity to demonstrate its hydrogen technology to the world.

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