Handouts of a talk given by Gerhard Fasol for The Stockholm School of Economics (European Institute of Japanese Studies) at the Embassy of Sweden in Tokyo (Alfred Nobel Auditorium), on Wednesday June 19th, 2013. About the talk: Japan’s electricity companies earn about US$ 200 billion annually in revenues, and until the Fukushima nuclear accident, about 30% of energy was generated by nuclear power plants, which are currently switched off except for two nuclear plants in Kansai region. Renewable energy sectors expect the rapid built-up of renewable sources in Japan to continue, ie; solar energy, wind, geo-thermal and other sources to follow. METI is also working on liberalization of Japan’s energy markets. Japan’s energy sector undergoes rapid changes and presents large opportunities. In the presentation, we will hear some of the myths about electricity and energy in Japan, and the realities. We will also hear how foreign companies can succeed in Japan’s energy sector. About the speaker: Dr. Gerhard Fasol is physicist and entrepreneur who has worked since 1984 with Japan’s high-tech sector. He worked on the entrance strategies into Japan’s environmental and energy sector for one of Europe’s largest engineering multi-nationals, and for US investment funds and venture companies on market entry into Japan’s energy sector. Gerhard also organizes annual “Ludwig Boltzmann Symposia on Energy” for CEOs and leaders of Japan’s energy sector. Gerhard graduated with a PhD in Physics from Cambrige University/Trinity College. He was tenured faculty member in Physics at Cambridge University, and Associate Professor at Tokyo University’s Electrical Engineering Faculty and led a JST-Sakigake project on spin electronics before founding Eurotechnology Japan KK.

1. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com “Japan’s energy - myths vs reality” Embassy of Sweden,Tokyo,, June 19, 20131
JAPAN’S ENERGY -
MYTHSVERSUS REALITY
Gerhard Fasol PhD
http://www.eurotechnology.com/
fasol@eurotechnology.com
twitter.com/gfasol
Stockholm School of Economics, (European Institute for Japanese Studies)
Embassy of SwedenTokyo, (Alfred Nobel Auditorium), June 19, 2013

2. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com “Japan’s energy - myths vs reality” Embassy of Sweden,Tokyo,, June 19, 2013
JAPAN’S ENERGY
2
•Energy and DNA
•Ludwig Boltzmann’s tools and laws to work with energy
•Myth vs Reality, Mantra vs Smart - psychology of judgment and
decision making
•Parliamentary commission result:“Regulatory capture” caused the
Fukushima Accident
•History: Japan’s energy structure frozen since 1952
•Primary energy: 96% imported
•Why Japan pays so much for LNG
•Electricity architecture and liberalization
•Renewable energy
•Future: where do we go from here?

3. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com “Japan’s energy - myths vs reality” Embassy of Sweden,Tokyo,, June 19, 2013
LUDWIG BOLTZMANN
3
Ludwig Boltzmann created much of the laws and tools to work
with energy.
Some renewable electricity generation methods are directly based
on Ludwig Boltzmann’s work, and all use his laws.
More:
http://www.eurotechnology.com/events/ludwig-boltzmann-
symposia/

4. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com “Japan’s energy - myths vs reality” Embassy of Sweden,Tokyo,, June 19, 2013
CAUSE OF FUKUSHIMA NUCLEAR ACCIDENT
RESULT OF PARLIAMENTARY COMMISSION
CHAIRED BY KIYOSHI KUROKAWA:
4
•Regulatory capture
•not a Japanese phenomenon
•theory of regulatory capture:
George Stigler (Nobel Prize 1982)
“EconomicTheory of Regulation”

5. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com “Japan’s energy - myths vs reality” Embassy of Sweden,Tokyo,, June 19, 20135
Myth
Mantra
Reality
Smart

6. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com “Japan’s energy - myths vs reality” Embassy of Sweden,Tokyo,, June 19, 2013
MANTRAVS SMART
6
Merriam-Webster:
mantra = a mystical formula of invocation or incantation (as in
Hinduism)
In Hinduism and Buddhism, a sacred utterance (syllable, word, or
verse) believed to possess mystical or spiritual power. Mantras may
be spoken aloud or uttered in thought, and they may be either
repeated or sounded only once. Most have no apparent verbal
meaning, but they are thought to have profound significance and to
serve as distillations of spiritual wisdom. Repetition of a
mantra can induce a trancelike state and can lead the
participant to a higher level of spiritual awareness.Widely used
mantras include om in Hinduism and om mani padme hum in
Tibetan Buddhism.

7. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com “Japan’s energy - myths vs reality” Embassy of Sweden,Tokyo,, June 19, 2013
MANTRAS - MYTHS
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•“nuclear safety” myth/mantra
•“no terrorism in Japan” myth/mantra
•“stable electricity supply” myth/mantra
•“Fukushima nuclear accident was caused by earth
quake and tsunami” myth/mantra
•and more

8. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com “Japan’s energy - myths vs reality” Embassy of Sweden,Tokyo,, June 19, 2013
DANIEL KAHNEMAN
8
2002 Nobel Prize in Economic Science
Psychology of judgment and decision making
Eminent US philosopher about Daniel Kahneman:
“I am not interested in the psychology of stupidity”

9. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com “Japan’s energy - myths vs reality” Embassy of Sweden,Tokyo,, June 19, 2013
HISTORY OF JAPAN’S ELECTRICAL POWER INDUSTRY
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Year action
February 15, 1883
1893
1896
1938-1939
March 1942
May 1, 1951
March 1, 1961
Tokyo Dentou KK receives Government license, starts business in July 5,1886
Tokyo Dentou KK introduces 50Hz equipment from AEG (of Germany)
Osaka Dentou KK introduces 60Hz equipment from GE (of USA)
33 electricity utility companies
700 electricity utility companies
Japan’s electricity industry nationalized
Nihon Hassouden KK (Nippatsu) created (generation + transmission)
9 distribution companies
US occupation government orders dissolution of Nihon Hassouden KK
(Nippatsu), 9 regional electricity monopolies created,1972 + Okinawa Power Co
construction of first Japanese nuclear power plant (Tokai Nuclear Power Plant, UK
Magnox type) starts (power generation starts 1966, decommissioned in 1998)
Source: Eurotechnology-Japan Report “Japan’s Energy Sector” http://www.eurotechnology.com/store/j_energy/

10. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com “Japan’s energy - myths vs reality” Embassy of Sweden,Tokyo,, June 19, 2013
NEW ENERGY CONTRIBUTIONTOTHE POWER MIX
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Before March 11, 2011, Japan’s regional power monopolies had an unwritten rule to keep “new
energy” (ie. renewable energies such as wind, solar, geo-thermal, wave power, bio-mass, but excepting
water power) below 1% of the power mix.Water power was excepted, and Japan’s water power
contribution is on the order of 10% overall.
Hokkaido Tohoku Tepco Chubu Hokuriku Kansai Chugoku Shikoku Kyushu Okinawa J Power
0
0.2
0.4
0.6
0.8
1.
1.2
1.4
newenergygenerationcapacity
new energy generation
capacity before March 11, 2011
0.7
1.3
0.05
0.1
0.9
0.03 0.02 0.03
1.1
0
0.09
c2012EurotechnologyJapanKK
www.eurotechnology.com
Source: Eurotechnology-Japan Report “Renewable Energy in Japan” http://www.eurotechnology.com/store/j_renewable/

11. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com “Japan’s energy - myths vs reality” Embassy of Sweden,Tokyo,, June 19, 2013
THIS PRESENTATION IS BASED ONTHE
INFORMATION IN OUR REPORTS:
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•Japan’s energy landscape
•http://www.eurotechnology.com/store/j_energy/
•Renewable energy in Japan
•http://www.eurotechnology.com/store/j_renewable/
The following articles are based on our reports:
•The Economist,April 8, 2013,“Life without nukes”,
http://www.economist.com/blogs/babbage/2013/04/energy
•IEEE Spectrum, May 6, 2013,“Japan’s utilities suffer staggering
losses”, http://spectrum.ieee.org/energywise/energy/nuclear/japans-
utilities-suffer-staggering-losses

12. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com “Japan’s energy - myths vs reality” Embassy of Sweden,Tokyo,, June 19, 2013
MORE INFORMATION
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•In our blog
•http://www.eurotechnology.com/news/
•Japan’s energy landscape
•http://www.eurotechnology.com/store/j_energy/
•Renewable energy in Japan
•http://www.eurotechnology.com/store/j_renewable/

13. (c) 2013 Eurotechnology Japan KK www.eurotechnology.com “Japan’s energy - myths vs reality” Embassy of Sweden,Tokyo,, June 19, 2013
CONTACT AND MORE INFORMATION
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Contact
•Gerhard Fasol PhD
•Eurotechnology Japan KK,Tokyo, Japan
•http://www.eurotechnology.com/
•fasol@eurotechnology.com
More information:
•reports: http://www.eurotechnology.com/store/
•http://www.eurotechnology.com/store/j_energy/
•http://www.eurotechnology.com/store/j_renewable/
•twitter: http://twitter.com/gfasol/
•http://fasol.com