The domestic natural gas industry is aggressively promoting sales of an environmentally friendly fuel cell called "Ene-Farm" for ordinary households.
Four major gas companies, including Tokyo Gas Co., have set a total sales target of about 15,000 units for fiscal 2012, up 30 percent from sales in fiscal 2011.
Demand for the Ene-Farm fuels cells has been increasing sharply, particularly after last year's Great East Japan Earthquake. At the same time, gas companies are trying to reduce the costs and size of the cells, two major obstacles to making them more popular.
According to Tokyo Gas, the cells can reduce use of primary energy by a household about 35 percent and carbon emissions by nearly 50 percent.
Ene-Farm cells generate electricity and heat through a chemical reaction of atmospheric oxygen and hydrogen extracted from natural gas or propane. It is estimated the cells can generate about 60 percent of an average household's electricity needs, saving about 50,000 yen to 60,000 yen a year in fuel and lighting expenses, as it also can heat water.
Ene-Farm was introduced in the market in 2009. About 11,000 units were sold by four major gas companies in fiscal 2011.
A drawback to the fuel cells is that they cannot operate without electricity, making them useless in a power outage.
To solve this problem, Tokyo Gas, the largest company in the industry, started selling storage batteries separately in February. The batteries can generate power for household use for several hours. Tokyo Gas hopes to sell 7,100 Ene-Farm units in fiscal 2012, up 25 percent from the previous year.
Osaka Gas Co. plans to launch a new model, codeveloped with Kyocera Corp. and other companies, on Friday. According to the company, its power generation efficiency is the world's best, and it is capable of covering about 80 percent of the power needs of a normal household. The company aims to sell 6,000 units in fiscal 2012, up by 46 percent over the previous year.
Toho Gas Co., based in the Tokai region, has set a sales target at 1,300 units, up 12 percent, and Saibu Gas Co., based in northern Kyushu, also set its target at 850 units, up 90 percent from the previous year.
One Ene-Farm unit costs at least 2 million yen. Even if buyers take advantage of a government subsidy, the units cost at least 1.5 million yen each. The current subsidy system will expire in fiscal 2015.
All major gas companies are cooperating with Ene-Farm makers to lower prices. A Tokyo Gas official said, "We'd like to lower the unit price to less than 1 million yen." An Osaka Gas official said his company's target is between 500,000 yen and 600,000 yen per unit by around the late 2010s.
It is also necessary to reduce the size of the units. For example, the fuel cells sold by Tokyo Gas, made by Panasonic Corp., are 1.9 meters high, 1 meter wide and 50 centimeters deep.
Because of their size, the cells are currently sold only for detached houses, which curbs demand in urban areas, where many people live in condominiums.
The Japan Gas Association has set a total sales target of 5 million units, including propane types, by 2030, by solving the problems of cost and size.
"If people recognize the merits of Ene-Farm, I think annual sales of 500,000 units will be realized in the future," association Chairman Mitsunori Torihara, who is also the chairman at Tokyo Gas Co., said last Tuesday at a press conference.
Copyright 2012 The Yomiuri Shimbun. All Rights Reserved.
(Originally published April 24, 2012, in The Daily Yomiuri.)