Corporate governance reforms: making Japanese corporations great again?
Understanding how Japanese Boards of Directors function helps you close deals Monday, May 28, 2018, 19:00-21:00 at CCIFJ
Stimulating Japanese companies’ growth is a key element of Prime Minister Abe’s economic growth policies. For companies to grow, management needs to be improved, Boards of Directors need to bring in diverse experiences and new ideas, and Boards need to control executive management effectively. Corporate governance is important for investors, and also for those aiming to achieve major decisions from Japanese companies. If you want to make a major sale, an M&A transaction or create a partnership with a Japanese company, you need to understand how Japanese companies take decisions at Board of Directors level.
The speaker is one of a limited number of foreigners with several years experience as Board Director and member of the Supervisory & Audit committee of a Japanese stock market listed company. His presentation will aim to give you a hands-on understanding of Japanese Board of Directors work from an insider with several years Japanese Board experience. He will illustrate this with an example, where he helped a European industrial group achieve agreement to cooperate from a large Japanese industrial group within 12 hours, by applying his Japanese Board Director experience.
He addresses C-level executives aiming to close deals with Japanese corporations, and to fund managers who have new duties to interact more closely with Japanese Boards under the new stewardship code of the FSA. He will also prepare you for coming changes to these rules.
About the speaker
Gerhard Fasol graduated with a PhD in Physics of Cambridge University, Cavendish Laboratory, and Trinity College. He founded the company Eurotechnology Japan KK in 1997 and has been working with hundreds of Japanese and foreign companies on cross-border business development and M&A projects. He first came to Japan in 1984 to help build a research cooperation with NTT. For four years he served as Board Director of the Japanese stock market listed cybersecurity group GMO Cloud KK.
He is also Guest-Professor at Kyushu University. He was tenured faculty at Cambridge University, Fellow and Director of Studies at Trinity College Cambridge, and also Guest Professor in Physics at the Ecole Normale Superieure in Paris.
Date Monday, May 28, 2018
Time From 19:00 to 21:00 (doors open at 18:30)
Venue CCI France Japon, 1F Meeting room
Admission Fee (to be paid in cash at the door or online via PayPal)
JPY 4 000 for members of the French Chamber
JPY 6 000 for non-members
Language English
Deadline for registration/cancellation Thursday, May 24, 2018, 17:00
Registration: please click on the button “S’inscrire” at the bottom of this page.
Monday, March 12, 2018, 12:00 – 13:30 at the Foreign Correspondents Club in Japan FCCJ
While many Japanese corporations are still admired around the world, too many have for years suffered sluggish growth and low profitability. A string of corporate scandals and failures have shocked the pubic and corroded confidence in Japanese business.
The government of Prime Minister Shinzo Abe has spearheaded reforms. A corporate governance code has been introduced to improve supervision of management and increase the number of independent outside directors. Change is happening faster than many expected and the reforms are generally regarded as successful. Yet, much still needs to be done to bring more diversity into Japanese boardrooms.
Gerhard Fasol is one of a tiny number of foreigners in the boardrooms of listed Japanese corporations. A physicist and entrepreneur, he has been in Tokyo for quarter of a century. For four years he has been Board Director, and since last year additionally a member of the Supervisory and Audit Committee of the Japanese cybersecurity group GMO Cloud KK, which is listed on the Tokyo Stock Exchange.
With years of experience of mergers and acquisitions and cross-border business development projects in Tokyo, Fasol is well placed to explain what’s happening inside Japan Inc. He will come to the FCCJ to discuss what we might expect from Japan’s corporate governance reforms.
10th Ludwig Boltzmann Forum, 20 February 2018 at the Embassy of Austria in Tokyo
Gerhard Fasol, Chair
10th Ludwig Boltzmann Forum Tokyo 2018
Program
Welcome by the Ambassador of Austria, represented by Magister Konstantin Saupe (Embassy of Austria)
Gerhard Fasol CEO Eurotechnology Japan KK, Board Director GMO Cloud KK, Guest-Professor Kyushu University, former faculty Cambridge University and Tokyo University, past Fellow, Trinity College Cambridge “Entropy, Information and Ludwig Boltzmann“
Tomoko Nakanishi Commissioner, Japan Atomic Energy Commission, President, Japan Society for Nuclear and Radiochemical Sciences, Tokyo University Professor “What is revealed by radiation in living plants“
Hiroyuki Sasaki Vice-President Kyushu University, Director of the Epigenome Network Research Center, Professor, Medical Institute of Bioregulation “Strategy and Serendipity in Science“
Wolfgang Kautek Professor for Physical Chemistry at University of Vienna, Member of Scientific Board of Austrian Research Associations, President of the Erwin Schrödinger Society for Nanosciences (ESG), Chairman of the Research Group “Physical Chemistry” of the Austrian Chemical Society (GÖCh) “Nanotechnology and Critical Raw Materials“
Gerhard Fasol CEO, Eurotechnology Japan KK, Board Director, GMO Cloud KK. former faculty Cambridge University and past Fellow, Trinity College Cambridge
While many Japanese corporations are greatly admired around the world, certain aspects of Japanese management style are believed to be holding back Japan’s economic growth. The media focus mainly on extreme cases and fraud, but the responsibilities of Directors go far beyond these defensive, compliance-type duties. Preventing fraud alone is not sufficient to ensure growth and long-term success; it is just the baseline!
Based on several years of direct experience as a non-Japanese Director of a Tokyo Stock Exchange-listed Japanese company, Gerhard Fasol will discuss the reforms to Japanese corporate governance made in recent years, and what, in his view, still needs to be done. He will also discuss issues of diversity and its importance for the quality of management in Japanese corporations.
About the contributors
Gerhard Fasol
Gerhard Fasol founded the M&A and cross-border advisory firm Eurotechnology Japan in 1997, and has worked on a large number of M&A and cross-border projects in Tokyo over the last 20 years. Since 2014 he has been a Board Director and Member of the Supervisory & Audit Committee of the Japanese cybersecurity group GMO Cloud KK, listed on the first section of the Tokyo Stock Exchange, and since April 2017 he has been a Visiting Professor at the University of Kyushu. He gained a PhD in Physics at Trinity College, Cambridge, and then became a Lecturer at Cambridge University, based at the Cavendish Laboratory, while also being a Research Fellow, Teaching Fellow and Director of Studies at Trinity College. He has worked as a research scientist at the Max Planck Institute, Stuttgart, on semiconductor and solid state physics research, as Manager of the Hitachi Research Laboratory in Cambridge, and as an Associate Professor in Electrical Engineering at Tokyo University.
Sir Stephen Gomersall
Sir Stephen Gomersall studied at Cambridge and Stanford University, and joined the Foreign and Commonwealth Office in 1970. He served in Japan as Political Officer (1972-1977), Economic Counsellor (1986-1990), and Ambassador (1999-2004), and also in the United States as Political Officer in Washington and as Deputy Permanent Representative to the United Nations in New York. From 2004 he became Chief Executive for Europe in Hitachi, and was the first non-Japanese to serve on the company’s main Board from 2011-2014. He is currently a Director of Hitachi Europe and Hitachi’s main UK subsidiaries investing in railway manufacturing and nuclear power development. He was knighted by the British Government in 2000, and in 2015 received the Grand Cordon of the Order of the Rising Sun from Japan for services to UK-Japan economic relations.
More on the topic of corporate governance reforms in Japan
The wealth and welfare of everyone living in Japan is based on the success of Japanese companies, how well companies are managed, and how managers are encouraged, supported and controlled.
Therefore corporate governance reforms are an important part of the “Abenomics” economic reform program. Many think that the corporate governance reforms of recent years have been the most successful part of Abenomics, and the former Chairman of the Tokyo Stock Exchange even said that these reforms happened much faster than he had thought.
Corporate governance mainly refers to the responsibilities of Board Directors who take part in the major decision making of every company, who supervise and support the executive management including the CEO/President of the company, and this make essential contributions to the success of companies.
Another aspect of corporate governance is the “stewardship code”, which refers to the influence of investors on company’s executive management.
Understanding decision making and the control of management, the way Japanese companies reach decisions and how this decision making is supervised, is essential knowledge for everyone who works to persuade Japanese corporations to take desired decisions, e.g. to achieve sales, partnerships, investments, or even Mergers and Acquisitions (M&A), who invests in Japanese corporations. Employees should also understand how the companies they work for are run.
This talk will explain the major components and fundamentals of corporate governance and its reforms in Japan based on several years of practical hands-on experience on the Board of Directors and on the Supervisory & Audit Committee of a stock market listed Japanese corporation.
Speaker: Gerhard Fasol
Gerhard Fasol graduated with a PhD in Physics from Cambridge University and Trinity College. He worked as research scientist at the Max-Planck-Institute Stuttgart on semiconductor and solid state physics research. He was tenured Faculty in Physics at the Cavendish Laboratory of the University of Cambridge, and he was Research Fellow, then Teaching Fellow and Director of Studies in Natural Sciences at Trinity College Cambridge. He was Manager of the Hitachi Research Laboratory in Cambridge, Associate Professor in Electrical Engineering at Tokyo University, and is founder of the advisory firm Eurotechnology Japan. He is Board Director of GMO Cloud KK, and since April 2017 he is Visiting Professor at the University of Kyushu.
Gerhard Fasol: Corporate governance reforms in Japan: hands-on insights as Board Director of a Japanese groupGerhard Fasol: Corporate governance reforms in Japan: hands-on insights as Board Director of a Japanese groupGerhard Fasol: Corporate governance reforms in Japan: hands-on insights as Board Director of a Japanese groupGerhard Fasol: Corporate governance reforms in Japan: hands-on insights as Board Director of a Japanese group
Copyright (c) 2017 by Eurotechnology Japan. All Rights Reserved.
Gerhard Fasol: A European view on the future of engineering education in Kyushu
Future engineering education. 4th Symposium of the Kyushu Society for Engineering Education. 11 July 2017 13:00-16:30 Kyushu Institute of Technology
Future engineering education meeting program.
13:00-15:00
Yuichi Harada, Professor, Kyushu University: “Practical education using global innovation”
Shingo Igarashi, Deputy Director General and Associate Professor, Robert T Huang Entrepreneurship Center, Kyushu University: “Merging education for innovation, and student’s independence
Gerhard Fasol, CEO Eurotechnology Japan KK, Board Director GMO Cloud KK, Guest-Professor Kyushu University: “Future engineering education and industrial cooperation – European and UK views”
Future engineering education and industrial cooperation – European and UK views (outline of the talk)
Gerhard Fasol, CEO Eurotechnology Japan KK, Board Director GMO Cloud KK, Guest-Professor Kyushu University
Outline:
Self introduction – as relevant for engineering education
Kyushu’s economic growth in comparison, and engineering education’s responsibility
Kyushu’s economic growth stopped around the year 2000, while most other comparable economies in advanced countries have continued to grow. e.g. Holland’s and Kyushu’s economic size were about the same in the year 2000, while today Netherlands’ economy is about two times the size of Kyushu.
Many studies have shown the contributions of universities to economic growth, and for example MIT has determined in detail the contributions of MIT to economic growth.
Although we should not read too much into University’s ranking tables, there is a drastic difference in the ranking of Kyushu’s Universities and Netherlands’ or Singapore’s Universities.
I think there are strong arguments, that improvements of Kyushu’s Universities including engineering education are necessary to enable a restart of Kyushu’s economy.
Thus the need for restarting Kyushu’s economic growth provides a strong motivation to improve engineering education in Kyushu.
How to improve engineering education: Escaping Flatland
“Inbreeding” is well recognized as Japan’s Universities’ top problem to overcome. People must circulate to circulate ideas.
Example: in Germany we have “Hausberufungsverbot”, not only in Universities, but also in many other organizations, and we have “Lehr- und Wanderjahre” with 100s of years of history.
Japan also has a long tradition of welcoming and adopting philosophy, religion and technology from many countries including India, Europe, USA, Korea and many other areas.
“Flatland – a romance of many dimensions” by A. Square (Edwin A Abbott) has been written both as a mathematics teaching tool to visualize dimensions, by introducing a society confined to live in two dimensions = FlatLand.
Flatland is both a geometrical teaching tool, as well as a psychological / sociological study.
The three key elements in a successful ecosystem for innovation
Professor Ian Walmsley, Pro-Vice-Chancellor for Research and Innovation of Oxford University, recently explained that there are three key elements in a successful ecosystem for innovation:
Critical mass: sufficient capacity for generating and identifying good and fruitful ideas
Cross-fertilization of concepts: the collision of different ways of thinking, both cross-disciplinary and cross-cultural
Competitive tensioning: ideas must be compared with the best of the world
How to improve engineering education: Traditional lectures vs Active learning
Pioneering education research by Ibrahim Abou Halloun and David Hastens (American Journal of Physics) shows the physics (and engineering) students mostly enter university with “Common Sense” (CS) views of physics. CS is basically pre-Newton and related to Aristoteles works (384-322 BC).
Aristoteles work was the basis for physics understanding and teaching for about 2000 years, until Newton revolutionized our understanding of physics, based on mathematical analysis and modeling of experimental observations.
Education research shows that a large fraction of students enter University with Common Sense (CS) views on physics, and too few students are “converted” to Newton’s views of physics, and traditional lectures are not very effective at achieving this “conversion”.
R W Revans (1907-2003) introduced the concept of “active learning”.
Comparative studies (Scott Freeman, Sarah Eddy, Miles McDonough, Michelle Smith, Nnadozie Okoroafor, Hannah Jordt, May Pat Wenderoth, PNAS) show that active learning achieved 21.8% examination failure rate, while traditional lecture based teaching resulted in 33.8% failure rates (55% higher than active learning).
Thus we need to develop active learning to supplement or replace traditional lecture based teaching, and bring active techniques to students, and let students do curiosity based research as early as possible.
In Cambridge University and Oxford University “supervisions” are another alternative to classical lectures.
Future engineering education – a European view. Gerhard Fasol for the Kyushu Society for Engineering EducationFuture engineering education – a European view. Gerhard Fasol for the Kyushu Society for Engineering EducationFuture engineering education – a European view. Gerhard Fasol for the Kyushu Society for Engineering EducationFuture engineering education – a European view. Gerhard Fasol for the Kyushu Society for Engineering EducationFuture engineering education – a European view. Gerhard Fasol for the Kyushu Society for Engineering EducationFuture engineering education – a European view. Gerhard Fasol for the Kyushu Society for Engineering EducationyFuture engineering education – a European view. Gerhard Fasol for the Kyushu Society for Engineering EducationFuture engineering education – a European view. Gerhard Fasol for the Kyushu Society for Engineering EducationFuture engineering education – a European view. Gerhard Fasol for the Kyushu Society for Engineering EducationFuture engineering education – a European view. Gerhard Fasol for the Kyushu Society for Engineering EducationFuture engineering education – a European view. Gerhard Fasol for the Kyushu Society for Engineering EducationFuture engineering education – a European view. Gerhard Fasol for the Kyushu Society for Engineering EducationFuture engineering education – a European view. Gerhard Fasol for the Kyushu Society for Engineering EducationFuture engineering education – a European view. Gerhard Fasol for the Kyushu Society for Engineering EducationFuture engineering education – a European view. Gerhard Fasol for the Kyushu Society for Engineering EducationKyushu Institute of Technology
Copyright (c) 2017 by Gerhard Fasol. All Rights Reserved.
Bill Emmott is an independent writer and consultant on international affairs, board director, and from 1993 until 2006 was editor of The Economist. http://www.billemmott.com
Gerhard Fasol is physicist, board director, entrepreneur, M&A advisor in Tokyo. https://fasol.com/
Japan’s future: A conversation
Bill Emmott:
I came first to Japan in 1983 as Economist Tokyo Bureau Chief, staying until 1986. Then in 1988 I came back on sabbatical leave and wrote “The sun also sets: why Japan will not be number one”, which against my expectation when it was published in 1989 found big resonance in Japan. The stock market was plunging, and mine was the most immediately available explanation. Ever since, journalists have constantly asked me what the sun is doing now! It also meant that even when I became editor in chief of The Economist in 1993 I spent much more time focused on Japan than I had expected, visiting as often as I could to keep track of the post-bubble developments, and wrote a book that appeared only in Japanese translation called “Kanrio no Taizai”, or the bureaucrats’ deadly sins. But later, with Prime Minister Koizumi consolidating reforms, and the banking system at last getting cleared up, I sent myself back in 2005 to research and wrote a much more optimistic special supplement for The Economist which became a book, “The sun also rises”.
Throughout the 35 years since I first came to Japan, I have both been fascinated and struck by the fact that although this is in so many ways an inward-looking self-contained nation, foreign observers are listened to and even have a chance of having a positive impact.
One element that had featured consistently in my writings ever since the 1980s had been observations and expectations for a growing role for women in employment and power. This seemed logical given that, at least before the bubble burst, Japan was heading for a labour shortage, but also the Equal Employment Law of 1986 had led to more females being recruited by major organisations. Japan’s excellent education surely meant that the underused half (= women) of the adult population would soon be used more productively.
Of course, this has developed a lot more slowly than I expected or hoped, partly for cultural reasons but also because Japan has not in fact had a labour shortage, until now.
I wanted to meet you, Gerhard tonight because we both are fascinated by the role Japanese women have in making Japan such a fascinating country, and how the many really strong Japanese women could have key roles in bringing growth and dynamic change back to Japan.
Could Japanese women have bigger roles for the development of Japan?
What is holding women back in Japan?
Who are the role models?
I am making interviews with high-achieving Japanese women to try to find answers, and plan to compile them into a book later this year. What would you say, Gerhard? And anyway, how did you end up here?
Gerhard Fasol:
My path to Japan is quite different than yours, Bill. I came to Japan first in 1984 as Fellow of Trinity College Cambridge, and scientist at the Max-Planck-Institute in Stuttgart, part of a project to build a research cooperation with NTT’s R&D labs. I saw that Japan was very important in technology and weakly linked to the outside – and still is today, I think. So in 1984 I decided to make Japan my second professional focus in addition to physics and electronics. Like you – the deeper I get into Japan, the more I learn about Japan, the greater my fascination, and my motivation to contribute.
Now I am working on many different projects, working on international technology M&A projects, and I am also one of a microscopic number of foreigners on the Board of Directors of a stock market listed Japanese corporation – reforming Japanese corporate governance hands-on.
Could Japanese women have bigger roles for the development of Japan?
Gerhard Fasol:
I think that the equal participation of women in leadership is directly linked to the population issue, ie the number of children born.
while in Sweden 44% of Members of Parliament are women,
37% in Germany and
26% in France –
the world average is 23% women in Parliaments.
In Japan the ratio of women in Parliament has increased from 1% in 1990 to 10% in 2016, so there is progress. If we extrapolate, and if the trend continues, then it might take another 30 years or so until Japan reaches world average in terms of women bringing women’s views into Parliament, and taking part in making the laws. And it might take Japan 100 years to reach Scandinavian standards of women’s participation in making the laws of the land – unless there is some acceleration in Japan.
Japan’s most powerful Ministry, the Ministry of Finance, did not hire any women into career positions for a period of about 10 years!
At the 2015 New Year event of Kyoto Bank, Keidanren Chairman Mr Sadayuki Sakakibara showed that Japan’s spending on aged people is dramatically higher than spending on children, and that this ratio is increasing with time, Japan spends more and more on aged people and less and less on children. There are two ways to look at this situation:
one way is to say: we have an aging society, therefore its only natural to spend more on
the aged, and less for children
the opposite way to look at the same situation is to say: we are spending less and less for children, no wonder we have fewer and fewer children. If we did more for young people, maybe people will have more children….
Actually most Japanese women I talk to want 2-3 children, but many cannot for financial reasons.
By nature, women give birth to children, not men, so more women in decision making positions including Government and Parliament will bring children’s issues into decision making.
As an example, child birth costs in Japan are not covered by health insurance, while they are everywhere in Europe. There are many other open and hidden costs of having children in Japan compared to Europe.
The most important factor are mindsets. The key to give more power to women in Japan is to change mindsets, to change the way of thinking.
As an example, the Prefecture of Kanagawa in 2015 created the “woman act” committee, under the slogan “women, step by step, take more responsibility”, however this committee both in 2015 and also in 2016 consisted of 11 men – not one single woman leader – here with original photographs archived on the wayback-machine / internet archive
Why not create a committee of 11 women leaders to lead efforts on gender equality in Kanagawa Prefecture? Why not promote women to leadership positions in Kanagawa Prefecture?
Another factor holding women back are the very long working hours common in Japan. As an example, at a recent EU-Japan gender equality conference, the Danish polician Astrid Krag, who was Minister for Health and Prevention at the age of 29 – 32 years, and who has two children, explaned that in the Parliament of Denmark the decision was taken not to take any vote after 4pm, so that Members of Parliament can be back home by 5pm, collect children from daycare centers in time etc. So in the Parliament of Denmark it is guaranteed that Members of Parliament can leave at 4pm. In today’s Japan such action is unthinkable, age 29 – with young children – would be unbelievably young for a Government Minister in Japan. https://en.wikipedia.org/wiki/Astrid_Krag
Late-night or overnight sessions at work, including Parliament, makes life incredibly difficult in Japan for parents with young children, doubtlessly contributing to the small number of women in top positions in Japan.
Who are the role models?
Gerhard Fasol:
Despite these difficulties, there is a substantial number of very strong women in Japan, who have worked their way up into leadership positions.
Examples are the Mayor of Yokohama, Ms Fumiko Hayashi, who succeeded in a very distinguished business career, and the Governor of Tokyo, Ms Yuriko Koike, who won the election on her own as an independent candidate, because she did not receive the backing of her party.
Bill Emmott:
That is great, as I have now interviewed Koike-san and plan to interview Hayashi-san during my next visit. Personally, as well as admiring women who have made it to the top in the tough political world I also admire and am interested in women succeeding as entrepreneurs and as executives in entrepreneurial companies. By starting and building their own companies, women can really create new realities, showing that new organisational cultures are possible in a Japanese context. Do you agree?
Kyushu University has one single full Professor of Medicine Professor Kiyoko Kato, she explains the situation of women in Japanese Obstetrics and Gynecology here https://www.boltzmann.com/2016/05/kiyoko-kato/ while Professor Kyoko Nomura has built a center to support women medical doctors and women medical researchers at Teikyo University. She spoke about the situation facing women in medicine in Japan here: https://www.boltzmann.com/2016/02/kyoko-nomura-2/
Towards the future
Gerhard Fasol:
The tantalizing issue is that the key is to change mindsets, and thats at the same time superficially easy, but at the same time incredibly hard. Thus outstanding strong Japanese women – and there are many of them – have a choice either to work their way up to the top in Japan, start their own company in Japan, or on the other hand to move to Europe, elsewhere in Asia, or to the USA – I know several strong Japanese women, including several Japanese medical doctors, who have moved to Europe or USA. They might of course come back to Japan at a later stage bringing global views and experiences to leadership positions in Japan in the future. I am very optimistic for the future of Japan – sometimes I wish things were moving faster.
Bill Emmott:
I agree entirely. I see Japanese women as both victims of the slow speed of change and as solutions to it. They really could make the Japan of 2030 look quite different, in all sorts of ways. It will be fascinating to watch.
Bill Emmott and Gerhard Fasol met at the restaurant MusMus in Tokyo
left to right: Gerhard Fasol, Ms Atsuko Konta (Manager of the restaurant MusMus), Bill Emmott at the restaurant MusMus in Tokyo.
Copyright (c) 2017 by Bill Emmott and Gerhard Fasol. All Rights Reserved.
Energy costs in Japan: A presentation to diplomats from the 28 EU countries (+ Norway and Switzerland) given at the EU Delegation in Tokyo on Thursday 18 May 2017
How can you reduce your energy bills?
Energy costs in Japan, how to reduce energy costs, and the current energy situation in Japan post-Fukushima are inherently linked and are the topics of this talk given by Gerhard Fasol at the EU Delegation (EU Embassy) in Tokyo on Thursday 19 May 2017.
Electricity prices in Japan compared to EU countries. Electricity charges in Japan are about 40% cheaper than in Germany.
Energy costs in Japan: Even now, post-Fukushima, electricity costs in Japan are not particularly high, if Japan was a EU country, Japan’s electricity costs would be ranked at about 15th or 16th rank.
Japan’s electricity charges are about 40% cheaper than in Germany, and on a similar level as in France or UK.
Ireland c€59.01
Germany c€40.28
Spain c€37.26
Sweden c€36.11
Portugal c€33.41
Denmark c€32.78
Czech Republic c€31.92
Cyprus c€31.79
Austria c€29.88
Finland c€29.20
Italy c€26.61
Slovakia c€26.30
France c€25.09
Luxembourg c€24.29
Croatia c€23.10
Japan c€23
Slovenia c€22.68
UK c€20.19
Poland c€18.80
Hungary c€18.35
….
(source: Eurostat as of July 2013, energy costs in Japan: electricity costs for Japan are typical Tokyo household electricity charges)
Paradigm shift: redesign the electricity grid
We see a paradigm shift: we need to change how we think about energy. Our electricity supply system has been built over the last more than 100 years and many design principles have been decided 100 years and have then been frozen in, although they might not be the best choices any more in today’s world.
Traditional electricity grids are designed top-down, with large centralized power stations at the top, and a distribution system down to the end users.
This traditional hierarchical top->down integrated grid structure is globally in the process of reinvention. The different services:
generation
transport
grid frequency stabilization
distribution
are being split into separate businesses, and each one is being deregulated. In addition, the top-down structure is changed: renewable energy sources, micro-hydropower station and other sources feed electricity into the grid from the bottom-up, requiring changes in the design and management of power grids.
In Japan the traditional electricity grid has three hierarchical layers:
Special high voltage (特別高圧)
500kV, 270kV, 140kV
60kV
20kV
High voltage (高圧) 6kV
Low voltage (低圧) 200V, 100V
These three markets (1) Special high voltage, (2) High Voltage, (3) Low voltage, are approximately of equal size in Japan, and represent each about 1/3 of Japan’s electricity market. The (3) Low voltage market was deregulated on April 1, 2016, and the other two market sectors earlier. Up to March 31, 2016, 10 regional electricity operators had the monopoly in the retail (low voltage) sector of their regions. Since April 1, 2016, all markets are liberated and low voltage segment consumers are free to buy their electricity from a number of suppliers.
50Hz/60Hz
Electricity started in Japan in 1893:
The first generator in Tokyo was from the German firm AEG, and therefore 50Hz
The first generator in Osaka was from the US firm General Electric, and therefore 60Hz
Event today the west of Japan has 60Hz, while the east has 50Hz. Since semiconductor electronics enables frequency conversion, and since long distance transport is frequently DC anyway, this 50Hz/60Hz split is very unlikely to change.
AC/DC
For historic reasons, most electricity is delivered to end customers as AC (alternating current), however most consumption today is increasingly DC (direct current). e.g. LED lighting, computers and most IT equipment including data centers require DC electricity. Solar power plants also produce DC electricity. Battery storage also requires and delivers DC electricity. So we might see an increasing shift to DC electricity supplies.
How to reduce your energy bill
Energy costs in Japan: in the past urban design typically maximized electricity sales:
“All Denka” was a long-term campaign by Japan’s electricity industry to maximize the consumption of electricity
design model:
build the town in order to sell as much electricity/air-conditioners/gas as possible
top-down: huge nuclear power stations far away + top-down distribution system
single windows, save money on insulation
heating in winter, air conditioning in summer
In the future
communities, companies and household take responsibility of energy locally
“positive energy buildings”: buildings generate and sell electricity instead of consuming. Example: MORI-Roppongi Hills
THINK: Marunouchi & MORI Buildings: “we want to be so well prepared for disasters, that people don’t run from our buildings, but that people come to our buildings for safety”
take responsibility!
How to reduce your energy bill > earn money selling electricity
cut consumption
Insulate
buy low-energy equipment, e.g. air-conditioner, washing machine
fuel cells (e.g. Bloom (gas), or Enefarm, Panasonic) > off-grid
negotiate supply contracts, combine gas & electricity & phone/internet to get discounts
e.g. all three major phone companies (KDDI, Docomo, SoftBank) sell electricity, internet access etc + electricity. Combine: phone, internet, electricity to get discounts.
Nature governs energy – nature cannot be fooled
Today’s energy situation in Japan is directly a function of the outcome of the Fukushima-Dai-Ichi disaster.
To understand the reasons for why the Fukushima-Dai-Ichi disaster happened, it is necessary to go back in history, there is not one single reason for this nuclear disaster but many starting at the design decisions taken even before the construction started.
It is instructive to compare the situation of TEPCO’s Fukushima-Dai-Ichi nuclear power plant with Tohoku Electric Power’s Onagawa nuclear power plant:
TEPCO’s Fukushima-Dai-Ichi nuclear power plant: tsunami height = 13 meters, one of the worst nuclear disasters
Tohoku Electric Power’s Onagawa nuclear power plant: tsunami height = 13 meters: successful shut down without damage, served as a refuge for about 300 people from the neighborhood who had lost their homes in the tsunami and earthquake disasters
Why the difference?
TEPCO’s Fukushima-Dai-Ichi nuclear power plant: ground elevation was reduced from 35 meters to 10 meters to save cooling water pumping costs
Tohoku Electric Power’s Onagawa nuclear power plant: Yanosuke Hirai carefully research previous tsunamis, especially the Great Jogan Tsunami of July 13, AD 869, built 13.8 meters above sea level
A few days after the Fukushima-Dai-Ichi disaster, US President Obama sent 150 top nuclear engineers to Japan for 11 months to assist directly the Japanese Prime Minister and the Japanese Government and TEPCO to mitigate the nuclear disaster. The Leader of this team of 150 US nuclear experts was Chuck Casto, who I invited two times to talk at the Ludwig Boltzmann Forum events. Read Chuck Casto’s explanations of the Fukushima Disaster here:
I also invited the Kiyoshi Kurokawa, the former Chairman of Japan’s Parliamentary Commission into the Fukushima Nuclear Disaster, to speak at the Ludwig Boltzmann Forum: Kiyoshi Kurokawa: “Groupthink can kill” (6th Ludwig Boltzmann Forum 20 February 2014)
Summary
Nature governs energy, and nature cannot be fooled (Richard Feynman)
Global trend: reengineering the grid. Localize, democratize, liberalize, deregulate
Renewable energy: wind power can cover all of Japan’s energy needs (in principle)
Energy, electricity and gas market liberalization is going ahead
Gerhard Fasol CEO, Eurotechnology Japan KK, Board Director, GMO Cloud KK. former faculty Cambridge University and past Fellow, Trinity College Cambridge “Entropy, information and Ludwig Boltzmann”
Chuck Casto Licensed Nuclear Power Station Operator. Was NRC regulator responsible for 23 nuclear power stations. Leader of the US Integrated Government and NRC efforts in Japan during the Fukushima nuclear accident in 2011. “Balance of Nuclear Power Policy in Post-Fukushima Japan”
Yayoi Kamimura INTEL, Global Account Executive, previously: NTT Docomo, Director and Head of Business Development & Investment “Innovation – A style in Japan”
Abstract: Changing the way Japanese corporations are managed
The Executive Management Board and the Supervisory Board are normally independent and composed of different people – except in Japan. In Japan traditionally Executive Management Board and the Supervisory Board are one and the same, ie the Executives of traditional Japanese companies supervise themselves – no surprise that the CEO seldom fires himself!
It is obvious that such self-supervision has big disadvantages, and may be one of the major reasons for Japan’s weak economic growth, and several recent corporate scandals. Companies in basically all other countries are managed by an Executive Management Board, which is supervised by a Supervisory Board, which approves or vetoes all major decisions of the company, and evaluates the performance of the Executive Manager, including the Chief Executive/CEO, and if necessary fires executives including the CEO, and selects and approves the new CEO.
To remedy this problem with the governance of Japanese corporations, Japan’s Government, the Tokyo Stock Exchange, and the Financial Services Agency have been changing the rules to improve the supervision of Japanese companies.
Speaker profile
Dr. Gerhard Fasol is one of a microscopic number of foreigners who is an independent Director on the Management and Supervisory Board, and also a Member of the Audit Board of a stock market listed Japanese corporation, and he will talk from several years of first-hand experience of how Japanese companies are supervised, which changes are on the way, and which further improvements are necessary to improve the management and supervision of Japanese corporations.
Date: Thursday October 6th, 2016, 18:30
Place: Alfred Nobel Auditorium, Embassy of Sweden, 10-3-400 Roppongi 1-chome, Minato-ku, Tokyo 106-0032
Gerhard Fasol “Corporate governance reforms in Japan” Embassy of Sweden on 6 October 2016Gerhard Fasol “Corporate governance reforms in Japan” Embassy of Sweden on 6 October 2016Gerhard Fasol “Corporate governance reforms in Japan” Embassy of Sweden on 6 October 2016Gerhard Fasol “Corporate governance reforms in Japan” Embassy of Sweden on 6 October 2016Gerhard Fasol “Corporate governance reforms in Japan” Embassy of Sweden on 6 October 2016
