Making Money in Alternative Energy Means Thinking Japanese

Colorado power utility

Xcel Energy Inc.

(XEL) is among the leading U.S. developers of “smart grid” technology, but when it needed a partner with know-how for operating a wind-to-battery storage system, it turned to

Japan Wind Energy Co.

[TYO:2766].

Get used to it. As much as President Obama keeps warning that the U.S. must become an energy technology exporter, not importer, in nearly every alternative sector, Japanese companies stand out. So much so, in fact, that now may be the time for investors to start building a mini all-Japanese alternative energy portfolio.

To start with, there are the usual suspects – Toyota Motor Corp. (TM), Honda Motor Co. (HMC), and Nissan Motor Co. (NSANY). They are likely to be the three leaders, not just for all-electric and plug-in electric cars and trucks, but also – thanks to a lot of cozy technological cooperation coordinated by Japanese research labs – the manufacturing leaders of the advanced batteries that will go into electric vehicles. Another big time car-battery development firm worth including is GS Yuasa Corp. (GYUAF).

Another obvious candidate is Japan Steel Works Ltd. (JPSWF.PK). While not everyone thinks of nuclear power as green energy, it doesn’t gush carbon dioxide and more of it is definitely going to be needed if the world has any hope of meeting expected increases in the demand for electricity. Japan Steel Works happens to be the world’s leading manufacturer of the principal section of a nuclear reactor’s key component, its containment vessel.

Two other obvious candidates are Sharp Corp. (SHCAY) and Sanyo Electric Co. (SANYY). These well-known consumer products concerns are also heavily involved in solar power, energy efficiency and more.

While there are plenty more names to choose from, two that EnergyTechStocks.com finds interesting for their long-term potential are Meidensha Corp. [TYO:6508] and Takuma Co. Ltd. (TKUMF). Meidensha’s energy unit makes efficient power generation systems and components, while its environmental unit is engaged in waste and sewage treatment. Takuma makes, sells and operates power plants that run on biomass. It also is involved in the waste treatment business

Disclosure: No positions.

Comments

[Davewmart:]

Two other areas to keep an eye on are fuel cells in the home and air source heat pumps.
The Japanese are ahead in both.
Regarding fuel cells, the idea is that natural gas is pumped to the home, and it is used to make electricity there.
This means that the waste heat can go to making hot water, instead of being wasted as it is in conventional central electricity generation.
In addition to the big Japanese players there is an Australian company which offers a more focussed play on this sector, Ceramic Fuel Cells:
www.cfcl.com.au/

Air source heat pumps use electricity to pull energy from the air in, to heat or cool.
You get a multiplier of around 2.5 on a conversion, or around 4 times on a new custom build.
In the past for climates with extremes such as the US you would have needed a ground source heat pump, which is very expensive as it involves digging the ground out and installing piping.
The latest CO2 pumps can deal with very low temperatures.
There are the usual Japanese suspects, and also an American company again giving a more pure play on the technology:
www.gotohallowell.com/...

Sep 01 07:02 AM

[jerrydd:]

Honda is going for fuel cell cars which is a loser because of tech, cost, eff is way against it. For homes in cold places that can use the heat fuel cells might work but they have life issues still.

Toyota is fighting Plug In hybids, not a good sign.

Nissan is going EV's which for a while get a large premium and a good buy if not overpriced yet.

Despite the hype few nukes will get built and just how much steel do they need?

GS Yuasa is up and coming if not overbought yet . Sanyo, Sharp, Panasonic, good companies but RE is only part of their business.

Sep 01 09:51 AM

[Zenfar:]

I am interested in Japan for a number of reasons. The market there has been flat for a long time, could be ready for an uptick. It would be nice if these companies were easier to trade not a fan of the pk ob stuff.

Sep 01 10:36 AM

[Davewmart:]

jerrydd.
Nuclear plants use massively less steel and concrete than to produce the same power by wind turbines, and that is without counting access roads, transmission cables and so on for this very distributed energy source.
The Chinese are building nuclear plants for around $1500/kw nominal, and run at 90% capacity.
They are moving to modular, much smaller reactors which can be factory built.
If in the West we don't get our act together to produce them due to insane legislation by regulators who imagine their job is to obstruct, not enable the build them, then our cheapest option for power would be to import them.

The only things which come close for cost are coal, as it can cheerfully dump uranium and mercury all over the landscape and kill millions with atmospheric pollution, not to mention the danger of collapsing waste sludge pits, and natural gas which is a premium fuel and should really be conserved.

Hopefully solar is moving into a position where it can economically provide peaking power in areas like Arizona, but for base load nothing comes close to nuclear power.
Combined with air source heat pumps it could provide economical power with very low carbon emissions.

BTW, I do not think material constraints are a reason not to build wind turbines, even though they use far more than nuclear.
The amounts needed are still acceptable.

The supposed high material resource needs of nuclear are just something which Greenpeace like to trot out, when their opposition to nuclear power is in fact grounded on entirely different factors, principally it's association in some people's minds with nuclear weapons.

Sep 01 11:55 AM

[Will Deliver:]

Davewmart: I too resist building Nuclear plants in the US. I don't fear nuclear weapons, as long as it's US. I don't want a nuclear plant in my neighborhood because of the terrorist threat that is very real and financed indirectly by the oil industry. That's another very important reason to build up renewable energy everywhere ASAP.

Sep 01 12:56 PM

[Davewmart:]

Will Deliver,
the problem as I see it is that it is demonstrable that coal kills many, many thousands of people every year, and devastates the landscape.
They have done a grand job of utilising the green movement to set against this purely theoretical maybes, using the epically daft 'precautionary principle', which is applied only to nuclear power, whereby you have to prove a negative, that under the most wild fantasies nothing can go wrong.
Incidentally, no energy sources or any form of engineering could pass this test.
The real fear is of a Chernobyl type incident, and I certainly took a fresh look at nuclear power when that happened.
However, even with that incident, the deaths which can confidently be assigned to it are around 50 or so of the heavily irradiated cleanup workers, according to the WHO.
Greenpeace of course disagrees, but then again it's collective mind is already so against nuclear, as a matter of near religious conviction, that they throw out anyone who comes to think it might be helpful, including some of their founders.
Civilian nuclear power, other than in mining uranium, has never been proven to have caused a single death in the West.
You can't improve a perfect record.
This is against tens of thousands a year from burning coal, let alone mining it, which kills a heck of a lot more than mining uranium.
In any case, no reactors are built in the West to the Chernobyl design, with no containment.
In spite of media exaggeration, the true evaluation of Three Mile Island would be that the containment structure did it's job, and no-one suffered any major harm.
That is not a very exciting headline, and the nuclear industry is working hard at being ever less exciting, with safety standards radically improved since TMI, so that the containment structure is not again asked to do it's job.
FUD is maintained by exaggerating any tiny leak in ancillary systems, so a tiny leak of water which has negligible amounts of radioactivity in it is billed as an 'incident' when major, life threatening incidents at other chemical and industrial sites attract little interest.
On the specific point you make, of terrorist threat, a nuclear plant is a very tough target indeed, as it is relatively compact, and in times of heightened threat soldiers can easily secure it.
For threats from missiles and so on, the containment structure designed to stop a large pressure explosion getting out make it a very tough target to get into.

There are so many better targets in an industrial society that they scarcely bear enumerating.
Take a missile threat.
You have a choice between a small, hardened, easily guarded target in a nuclear reactor, or a massive, unhardened, slow moving target in a liquified natural gas tanker.
They have the same energy as a nuclear bomb, and would easily take out a city.
Biological weapons can be developed and distributed at leisure, and provide none of the access difficulties that nuclear plants do.
Threats have to be rationally evaluated in risk assessments, not emotionally reacted to, and blanket prescriptions like 'no nuclear plants' avoided.
Which nuclear plants, using which designs?

New, even safer, designs are now coming to the fore, like the superbly engineered Westinghouse design.

Those concerned by the 'waste' , mainly from the weapons program but also from early, relatively inefficient reactors will be relieved to hear that modern reactors are not only much, much more efficient, but some can use the waste as fuel.

My personal favourite is the liquid fluoride thorium reactor, which can not only use nearly all of it's fuel, so that the whole of the US could have all it's electric power supplied by the use of 500 tonnes of thorium, but 83% of the waste from that would be processable in ten years, yielding valuable materials, but the remaining 85 tonnes would decay in around 300years to the same background level as the ores from which it was mined.

More here:
www.energyfromthorium.com/

None of this should be taken as being against renewables, using solar where and when it is sunny, wind where you need off grid power, and so on.
For low carbon, safe, baseload though, you need nuclear.

In the American an UK context it should be noted that many thousands of people die every year because they can't afford to stay warm or cool, so madating renewables whatever the cost would also result in a huge death toll - I know that many who are advocating renewables don't want this, and feel that we should alter the structure of our societies to prevent it, and so on, but that is what would happen and is happening at the moment.

Renewables are great, but can't do the job on their own.
How many deaths would be caused by Global warming, to set against the assumed risk of a terrorist attack on a nuclear plant?
Apologies for the long post, but at this time of the day likely not enough will still be looking to bother anyone! ;-)

Sep 01 03:24 PM