No. 86: Water business in Japan and the world (5) (September 30, 2011)

Sewage system in Japan

The sewage system in Japan is divided into two operations. One is governed by Sewerage Act, and the other is not governed by this act. The former is under the jurisdiction of the Ministry of Land, Infrastructure, Transport and Tourism, and for the business in the urban area. The latter is the business in agricultural communities and sparsely populated areas, and governing agency varies with the characteristics of facilities. Three ministries of the Ministry of Agriculture, Forestry and Fisheries, the Ministry of Internal Affairs and Communications, and the Ministry of the Environment are intricately involved.

In the sewage system, public burden is used for the treatment of rainwater, and usage charges are used for the treatment of sewage. In 2008, however, usage charges covered only 80% of the sewage treatment cost, and the remaining 20% is covered by public burden. Amid the financial difficulty of the central government and local governments, it will grow harder to increase the share of public fund. The sewage business, however, needs an increasing amount of capital to renovate and upgrade the existing sewage treatment facilities. According to the Ministry of Ministry of Land, Infrastructure, Transport and Tourism, there were 4,100 collapses of road because of the old conduit lines in 2008, and the number of collapses is increasing year by year. In addition, 19 million people are still uncovered by the sewage system, and the sewage business has a huge debt of about 32 trillion yen. It is necessary to foster the collaboration between the public and private sectors to improve the existing sewage infrastructure.

Under these difficult circumstances, new approaches are ongoing for the effective utilization of sewage resources. In the sewage business, heat and lots of organic substances are generated in the treatment process. For example, sewage sludge can be reused as fuel, and it contains useful resources like rare metals. In addition, treated sewage can be reused for flushing toilets and water spraying on the road. The reuse of treated sewage now attracts wide attention as a measure for a low-carbon and recycling-oriented society. (To be continued)

No. 85: Water business in Japan and the world (4) (September 26, 2011)

Industrial water supply in Japan

The industrial water supply business started in 1937 in Japan. After World War II, a law system to govern industrial water supply was established for the stable supply of inexpensive industrial water to sustain high economic growth. Currently, there are 260 facilities run by 151 public companies in Japan. About 90% of the 260 facilities recorded net profit thanks to a decrease of interest burden. However, the fact remains that they have lots of unsold industrial water, making their financial conditions uneasy.

The biggest problem with the industrial water supply business is the gap of supply and demand. Currently, only about 60% of the supply capacity of the total facilities is being used, and the glut is prevailing nationwide. As a matter of fact, it is rather hard to forecast precisely demand of industrial water because required amount of industrial water varies with location and category of industry. Demand for industrial water falters constantly because of the change of industrial structure and company’s efforts to rationalize water consumption. Closing or relocation of a big plant decreases water demand drastically. There are no easy solutions for the current gap of supply and demand.

It is an urgent task to establish a system that eliminates the gap and utilize surplus water effectively and efficiently. It may be one of the possible solutions to use the surplus industrial water as general purpose water, though it is not fit for drinking. The existing law has some constraints on the diversion of industrial water to general purpose water, but the Ministry of Economy, Trade and Industry is reportedly considering mitigating the application so that the surplus industrial water can be used for general purpose water. (To be continued)

No. 84: Water business in Japan and the world (3) (September 24, 2011)

Waterworks system in Japan

The waterworks business in Japan is classified into three kinds: (1) Water service companies that provide water service supply to a population of more than 5,000, (2) Water distributors that supply water to the water service companies, and (3) Water service companies that provide simple water service to a population less than 5,000. (1) is mainly managed by municipalities, and there are 1,317 companies across the country. (2) is conducted by local governments and group of companies made up of several municipalities, and there are 78 businesses. The waterworks business is mostly managed by the public sector because of the necessity to maintain an appropriate pricing system and implement risk management in time of disaster and emergency. Accordingly, all the operators involved in the waterworks business adopted the independent accounting system, and about 90% of them report net profits. 

Although business is profitable, Japan’s waterworks business currently has two serious problems. One is the necessity to upgrade and renovate the existing facilities in the days of falling population, and the advent will be at one bust. The Ministry of Health, Labour and Welfare reports that demand for renewal will be one trillion yen per year in the mid-2020. At present, the revenue, which comes from cash flow and subsidies, is about 1,050 billion yen, whereas annual investments are about 770 billion yen. That is, capitals allocatable for new investment are only 280 billion yen. In view of the debt payment of 7,600 billion yen and an inevitable decrease of revenue due to falling population, it is rather hard to satisfy the demand for renewal from the capital point of view.

The other problem is with the inheritance of technology related to waterworks. Currently, staff members older than 50 account for about 40% in the waterworks business. They will retire in 10-15 years, but most operators are not active in recruiting new staff members. It will be increasingly an important issue to recruit new staff members for the inheritance of related technology in the waterworks business. It is too late to become active after the business fall into the red. It is necessary to promote collaboration between the public and private sectors and foster multi-regional business. (To be continued)     

No. 83: Water business in Japan and the world (2) (September 23, 2011)

Administration of the water business in Japan

The coverage of the water supply system is 97.5%, and people can drink safe water anywhere inside Japan. Actually, Japan is blessed with water resources as shown by the fact that it has annual water resources of about 410 billion cubic meters as against annual consumption of about 83.1 billion cubic meters in 2006. However, there are lots of problems with the administration of the water business in Japan.

A vertical administrative system manages every aspect of Japan’s water business from water intake to drainage. The system dates back to a three-way split of the water supply business enacted in 1957. Following the three-way split, Water Supply Act, Industrial Water Supply Business Act, and Sewage Act were enacted in succession. As a result, water supply was assigned to the Ministry of Health, Labour and Welfare Ministry, industrial water was assigned to the Ministry of Economy, Trade and Industry, and sewage was assigned to the Ministry of Land, Infrastructure, Transport and Tourism.

The three-way split was the driving force of the infrastructure improvement during the high economic growth. In addition to the high coverage of water supply mentioned above, supply of industrial water increased about five times, and the coverage rate of sewage treatment reached 84.8% in 2008. The three operations of water supply, industrial water, and sewage are being managed by local governments under the initiative of public companies affiliated with Home Affairs Ministry. At the same time, the Ministry of Agriculture, Forestry and Fisheries manages rivers and lakes, while the Ministry of the Environment takes care of the regulations of sewage. It is rather hard for the central government to supervise the water business in an integrated manner because many ministries and agencies are concerned with the water business intricately.

Japan’s water business has currently a total debt of more than 40 trillion yen. The Japanese government is being asked to reform the administration of the water business because of lots of factors, such as the decreasing water demand due to low birthrate and longevity and the necessity of huge investments to renovate the existing facilities. To solve the current problems, it is necessary to facilitate the collaboration between the pubic and private sectors, draw nationwide pictures, and promote the reform under the initiative of the central government. (To be continued)

No. 82: Water business in Japan and the world (1) (September 22, 2011)

“Water business in Japan and the world” is based on articles in the Nihon Keizai Shimbun. The administrator will upload articles as frequently as possible, and the series is scheduled to be made up of about 30 articles.

World trend of the water business

Water is indispensable to all lives on the earth. Of course, it is one of the most important resources for the development of human’s social and economic activities. It is estimated that 1.4 billion cubic kilometers of water exists on the earth. However, we can use only 0.01% of the 1.4 billion cubic kilometers for our activities. In addition, water is not evenly distributed among regions on the earth. For example, Latin American has 31% share of world’s freshwater resources, and it has 12 times bigger per-capita water amount than South Asia.

Currently, about 70% of water taken from rivers is for agricultural water, 20% is for industrial water, and 10% for daily life water. Water consumption is expected to grow about 30% in 2025 as compared with the consumption in 2000 because of population increase, economic growth, and change of lifestyle. Accordingly, there will be an increasing number of areas where water supply cannot satisfy water demand. At the same time, water pollution is growing serious because of an increasing amount of human sewage and plant effluent. 

Under the current circumstances, countries and companies of the world started to show a deep interest in the water business that diversifies into various industrial sectors including supply, desalination, sewage treatment, and utilization of treated water. In fact, the water business is already a huge business field, but it is expected to grow even bigger in the future. The Japanese government wishes Japanese water-related companies to grow business domestically and globally, and various research projects are under way. It is an urgent task for Japan to restructure the water business to solve such problems as huge investment requirements and technology to be inherited for further grown both in the domestic and global markets. (To be continued)

No. 81: Power generation using ocean water and fresh water (September 9, 2011)

Two research activities on power generation using the difference of salinity concentration are going on in Japan. A research team consisting of researchers from Tokyo Institute of Technology, Nagasaki University, and Kyowa Kiden Industry are conducting experiments.

The power generation method they are exploring is called osmotic pressure generation that uses concentrated ocean water, which has two times more salt content than the normal ocean water, coming from the facilities for producing fresh water from ocean water and fresh water produced in the sewage treatment facilities. The ocean water and fresh water runs into eight cylinders, each of which is 1.4 m long and 30 cm in diameter, and permeation membranes are built in the eight cylinders to generate the momentum of the ocean water and increase the flow volume by 50-80%. Used ocean water and fresh water are sent back to the sea and rivers. This process runs the turbine to generate electric power. It is estimated that each of the eight cylinders can have the same generation capacity as a hydraulic power plant with a 300 m drop. The research team successfully generated electricity of 1-2 kW in the experiment.

Nitto Denko is also conducting research on osmotic pressure generation in alliance with Statkraft of Norway, stressing that developing a permeation membrane of 0.1 mm thick is the key technology for the success. In osmotic pressure generation, it is important to maintain the difference of salinity between ocean water and fresh water. That is, the key technology is to infiltrate fresh water into ocean water efficiently while preventing the salinity of ocean water from migrating to fresh water.

It is estimated that the generation cost of osmotic pressure generation is 9-26 yen per kW. It is lower than photovoltaic generation that costs 40 yen per kW and almost the same as wind generation that cost 14-24 yen per kW. In addition, because osmotic pressure generation is not at the mercy of weather, it has a real operating rate of more than 85%. The real operating rates of photovoltaic generation and wind generation are 12% and 20-22%, respectively. Considering the flow volume of rivers in Japan, osmotic pressure generation is estimated to have a potential generation capacity of six million kW, equivalent to the generation by 5-6 nuclear power plants.

The research team led by Tokyo Institute of Technology, which will be joined by Toray and Toyobo, plans to build a commercial plant in three years, while the Nikko Denko group is schedule to build a demonstration plant with a generation capacity of 2,000 kW in 2015.  

No. 80: Local production for local consumption of renewable energy (September 4, 2011)

In Kagoshima Prefecture, Isa city will start small-size hydraulic generation using the “Waterfall of Sogi,” a sightseeing spot called Niagara of the East, in collaboration with Nippon Koei that is a construction engineering company in 2012. The city provides land and Nippon Koei builds generation facilities with an investment of about 4,000 million yen. The annual generation capacity is scheduled to be at 3,540,000 kW equivalent to the annual consumption of 1,000 households. Most of the electricity generated will be sold to Kyushu Electric Power Company and the rest will be used for the lighting of the park.

In Chiba Prefecture, two waterworks are operating micro hydraulic generators that generate using the water pressure needed to send water from water the purification plants to them. The combined annual generation capacity is 2,400,000 kW equivalent to the annual consumption of about 700 households.

In Shizuoka Prefecture, four hot spring resorts are planning to hot-spring generation that runs a turbine by boiling hot water with the help of ammonia water that has a lower boiling point than water. The hot water needs to be at least 70 degrees centigrade, and the ideal temperature is 90 degrees centigrade. The feasibility study has already started, and the four resorts plan to start business operation in 2013.

In Miyagi Prefecture, Sendai University developed two-meters-square equipment that allows people to generate electricity by treading the artificial grass in collaboration with Soundpower Corp. that is a venture company in Kanagawa Prefecture. The research team organizes futsal games to play on the equipment for feasibility experiments. The first artificial grass developed by Sendai University was 50 cm square, and the initial product had the ability to generate electricity to let an LED bulb gleam only for 2.5 seconds. Continuous and strenuous efforts are being made to increase the generation efficiency.

The joint research conducted by Institute for Sustainable Energy and Chiba University, the self-supply ratio of renewable energy varies considerably with prefectures. Kyushu Electric Power has the highest ratio of 25% because it has the Hachohara-Otake Geothermal Generation Plant, and Tokyo is worst with 0.2%. It is well foreseen that each local government will make further efforts to develop renewable energy, seeking the best solution to mitigate the dependence on nuclear power generation.