Energy Infrastructure Business

Business Summary from Group Executive

Expanding energy infrastructure-related business to help realize carbon neutrality

Senior Vice President; Group Executive, Energy Infrastructure Business Group Atsushi Matsuda Senior Vice President;
Group Executive,
Energy Infrastructure Business Group
Atsushi Matsuda

Inaugural resolutions:
Constructing and executing a grand business design

I have worked in the Ceramic Products Business Group from the time I joined NGK up until April of 2021, when I was put in charge of the Energy Infrastructure Business Group. While this means I have no experience in power-related business, it also means I am able to view things from a different perspective to someone who has spent their entire career in it, which will, hopefully, stimulate new ideas and innovation.

In fiscal 2020 our business group was renamed from "Power Business" to "Energy Infrastructure Business." This was done to reflect the fact that, in the 100 years since NGK was founded, we have grown to handle more than just power-related products. My immediate goal is to create a grand design which is focused on the future of energy as a whole. This will be refined into concrete scenarios and action plans to be promptly implemented.

Towards realization of the NGK Group Vision:
Making "comprehensive energy business" our goal for the future

The world is rapidly moving towards the realization of a decarbonized society, and the NGK Group Vision itself puts forward contributing to carbon neutrality as one aspect of "what we want to be." What the Energy Infrastructure Business Group can do right now to ensure the health and habitability of the environment that our grandchildren will inherit is to contribute to carbon neutrality through an expansion of our energy storage systems.

For our storage battery business, we will expand our "product-focused" sales approach to encompass a broader "solutions-focused" approach. One example of this is a new approach to regional power producers and suppliers. What we are aiming at is not simply to sell storage batteries; rather, it is to contribute value to local governments by facilitating business continuity planning, renewable energy decarbonization and other efforts. There are a number of other business models that we are also developing into projects which combine NAS batteries with renewable energy, and we are driving for the transformation of our business portfolio by utilizing these models.

We also have plans for even further into the future. An example is the synthesis of methane gas and "e-fuel" synthetic fuel via our ceramic expertise. It has been estimated that the cost of solar powered energy production in the Middle East, North Africa and other regions which enjoy a lot of sunlight could be around one-third that of Europe and other regions with less sunlight. Thus, we first would use our NAS batteries to store the low-cost, renewable energy produced in those sunny regions. As the next step, we would use our subnano-ceramic membranes to concentrate CO2 in exhaust gases from production sites and in the atmosphere. The renewable energy stored in the NAS batteries can then be used to power our ion-conducting ceramic solid oxide electrolysis cells (SOEC) which efficiently electrolyze water with CO2 to produce hydrogen (H2) and carbon monoxide (CO). When we introduce our honeycomb structural reactors at this point to perform methanation (methane synthesis) of the electrolyzed byproducts, we will have a whole process for creating synthetic methane gas and "e-fuel" synthetic fuel. Finally, by deploying those ceramics products that incorporate our Group's core technology into plant equipment, we can expand our scope into the plant engineering business. Our goal for the future is to provide comprehensive energy services, including producing fuel at a plant we construct ourselves.

Current situation and future outlook:
Putting NGK insulator business into the black and expediting commercialization of zinc rechargeable batteries

The period ended March 2021 saw only limited impact from the COVID-19 pandemic; however, the business group continued to operate in the red due to significant, existing difficulties in the business environment. With regard to insulator business, capital investment by domestic electric power companies remains low, while at the same time adoption of polymer insulators is steadily increasing. Similarly, in the energy storage business, full-scale demand for long-lasting storage batteries has yet to materialize, while NAS battery plant operating rate remains low.

On the other hand, however, one significant positive result is the price revisions for insulators which nearly all customers in Japan and overseas had agreed to as of the preceding fiscal period.

Although no major change in business environment trends is expected for the period ending March 2022, we predict that, thanks to the rebuilding efforts that we have undertaken up to this point, insulator business will be put back into the black for the first time in six years. Also, with regard to our zinc rechargeable batteries, demonstration testing is ongoing. We anticipate these batteries will find uses as backup power supply systems in mobile phone base stations and as emergency power supply systems in buildings thanks to their high degree of safety. Based on performance results from the current fiscal year, we will pursue commercialization and begin sales from next fiscal year for a limited number of customers and applications.

Note: This interview was conducted in May 2021.

Main market

[Global market for large rechargeable batteries]
Storage system market size: 1.882 trillion yen
(Estimate for 2030 by Fuji Keizai Management)

Primary customers

[Stationary rechargeable batteries]
Power utilities, engineering companies, etc.

Sales ratio by business

Sales ratio by business

Core products

NAS batteries

NAS batteries

NGK developed the world's first commercialized battery system capable of storing hours of electricity. These systems, which enable a high output of electric power for long periods of time, have been installed in around 200 locations worldwide.

Zinc rechargeable batteries

Zinc rechargeable batteries

Zinc normally causes short-circuiting during charging when used in rechargeable batteries. However, NGK has solved this problem and developed a zinc rechargeable battery by utilizing its proprietary hydroxide ion conducting ceramics. Featuring high capacity and inherent safety, the zinc rechargeable battery is an optimal storage solution for indoor installations.

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