Mitsubishi Heavy Industries plans to invest in green technologies beyond solar and wind as one of the biggest participants in fossil fuel power generation tries to reinvent itself in clean energy.
Kentaro Hosomi, head of the Japanese conglomerate’s mainstay energy business, told the Financial Times that hydrogen, ammonia, carbon capture and nuclear power would all be needed to meet the global goal of zero emissions.
MHI’s green drive illustrates how even companies that have built their business around fossil fuels feel the need for heavy investment in green energy to secure their survival.
Like peers such as General Electric, the storied Japanese conglomerate faces a challenge reinventing itself because of its earnings reliance on traditional businesses, from coal power stations, shipbuilding and automotive turbochargers to regional jets, space rockets and the defence industry.
“We need real technology innovation. There is a very long road ahead of us,” Mr Hosomi said. “I hope that people will acknowledge that decarbonisation doesn’t come overnight.”
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MHI said last month it would boost investment and aim to increase its global green energy revenues to ¥300bn ($2.9bn) by financial 2030 from an estimated ¥50bn in financial 2023.
The group has been hit hard by the pandemic, which forced it to halt its regional jet programme, as well as falling demand for traditional power generation. It will also be affected by Japan’s abrupt decision to aim for net zero carbon emissions by 2050.
Mr Hosomi said MHI would invest in new technologies, arguing that existing renewables were becoming commodities.
“Solar and batteries . . . can facilitate the use of green energy, but from my point of view that means everything goes to China.”
Japan’s government is betting heavily on the potential to import hydrogen from friendly countries such as Australia, but Mr Hosomi said it would be too costly to build a new supply chain for liquefied hydrogen in the short-term.
Hydrogen can be burnt in power plants or used in fuel cells to power vehicles but the technology is expensive and has yet to become viable at scale.
Mr Hosomi said a more cost-effective approach would be to transport ammonia to Japan and burn it alongside coal and gas in existing power plants. Ammonia, which has the chemical symbol NH3, can be produced from hydrogen. However, it is liquid at higher temperatures and there is existing infrastructure to ship it around the world.
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MHI has won a contract for a power plant in Utah that will initially burn a mixture of hydrogen and natural gas before a gradual conversion to burning 100 per cent hydrogen by 2045. Co-firing with hydrogen or ammonia offers a future for MHI’s boilers, steam and gas turbines.
“This is a solution we can present as of today to users who desperately need the power coming from existing coal-fired units,” Mr Hosomi said.
One nascent technology where MHI believes it has a competitive advantage is carbon capture and storage, which is essential in making renewable ammonia or hydrogen from fossil fuels. The company estimates that the carbon capture equipment will become a €2.4tn industry as countries aim for carbon neutrality by 2050.
Given Japan’s dense population and mountainous terrain, however, Mr Hosomi said it would be impossible to reach zero carbon at home without nuclear power. Most of Japan’s nuclear power stations have been shut down since the 2011 Fukushima disaster.
“Unless you sacrifice everything to place solar panels or wind turbines all over the city of Tokyo, it’s impossible. So in geographical conditions like Japan, I think . . . nuclear is a must,” he said.