The Journal The Authority on Global Business in Japan

EMBASSY | UPDATE

May 2014
Power Walk: Connecting the Circuits
By Andrew Wylegala

This year’s dip notwithstanding, word of Japan’s economic revival has reached the United States. Commercial Service Japan (CS-J) returned to the road in April to capitalize on renewed business interest, continuing its focus on bilateral energy plays, among a few other high-voltage sectors.

In April, CS-J staff visited Illinois, Wisconsin, Colorado, Oregon, and California, promoting US-bound tourism, and counseling US firms on hot prospects in medtech, electric vehicles, FDI attraction, and general Japan business.

A highlight was joining JETRO colleagues and, again, ACCJ’s Bryan Norton to pitch the Japan message to 240 firms at the 27th Asia Pacific Business Outlook Conference. In addition, I met with some 25 firms, helping them consider Japan as a market and partner. While China remained front and center, many wanted to know if the time was ripe to sell to, or partner with, Japan. Answer: undeniably!

In mid-February, following on from the 2012 Environmental Remediation Visit organized by the US departments of Energy, State, and Commerce, we teamed with the DOE and MOE, METI, and JETRO, at The Fukushima Forum to further showcase US solutions for the clean-up of the Daiichi nuclear plant and environs.

We brought 51 US representatives to the embassy to explore partnerships with an equal number of Japanese firms seeking remediation or decommissioning projects. The forum was headlined by Ambassador Caroline Kennedy, US NRC Commissioner George Apostolakis, Commerce’s John Andersen, and Energy’s Peter Lyons, who all pressed US approaches and capabilities.

Japanese government and TEPCO officials gave the latest on the clean-up and where help was most needed. Each US firm presented its technology, while a round robin of firm-to-firm encounters culminated the forum. Our companies were enthusiastic about the format and results. More than a few deals were advanced and, critically, a new willingness to team up was on display.

A week later—turning to renewable power—Ambassador Kennedy drew a big crowd at the opening ceremony of Tokyo’s 1,600-exhibitor, regional trade show for the sector, World Smart Energy Week (WSEW). The Ambassador then toured part of the 75-strong US contingent, underscoring the breadth of US interest.

The link between the events was clear: the driver of demand for renewable sources has been compensating for lost nuclear capacity, as well as Japan’s aggressive feed-in-tariff regime.

CS-J introduced online matchmaking and a presentation covering vexing topics: product certification and project finance. While developments have crimped once-rampant solar activity, the wind, literally, is picking up for sales of both onshore and offshore turbines.

US exhibitors reported a four-fold increase in exports over WSEW 2013. CS-J is already working to bring at least 100 firms to WSEW 2015, a campaign we will bolster via five webinars, for which we welcome the ACCJ Energy Committee or other expertise.

But CS-J is not resting on its joules. Japan’s Diet passed electricity reform in February, bringing retail liberalization in just two years (2016) and unbundling of power generation, transmission, and distribution in four (2018). Japan is following its approach to the 1980s telecommunications reform by opening transmission to newcomers and then allowing customers to choose providers.

What does this mean for US firms? The answer is two-fold: new electric power companies are ready to enter the market and will need US technologies; and regional electric utilities, no longer able to enjoy monopoly positions, will need to innovate to lower costs and enhance competitiveness.

The regional utilities are rushing to install 80 million smart meters by 2024 to gain advantage over the future competition, by allowing customers to better monitor energy usage.

The annual New Orleans Association convenes with CS-J assistance at the Tokyo American Club (May 22). Here US firms can pitch technologies and hold meetings with officials from all 10 of Japan’s regional electric utilities and two power wholesalers.

We’re planning programs to introduce US-automated demand response technologies to Japanese industry, as well as preparing the third annual U.S.–Japan Renewable Energy Policy Business Roundtable (November).

Big changes are afoot in the world of power, and we provide high-energy solutions to market-entry problems.

Wylegala

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Andrew Wylegala is the Minister Counselor for Commercial Affairs at the Embassy of the United States Tokyo.

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