1

Development of fuel cell at JX

Hiroshi TakamiSenior Manager

System Integration Business Dept.JX Nippon Oil & Energy Corporation

Feb.17, 2011DOE Hydrogen and Fuel Cell Technical Advisory Committee

Arlington, VA

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Agenda

1. JX Holdings company briefing

2. Why residential fuel cells developed

3. Large scale demonstration project in Japan

4. Commercialization of residential fuel cells in Japan

5. Challenges in residential fuel cells

6. Toward future Low Carbon Society

3Copyright © 2010 JX Nippon Oil & Energy Corporation All Rights Reserved.

1．JX holdings company briefing

4Copyright © 2010 JX Nippon Oil & Energy Corporation All Rights Reserved.

Nippon OilCorporation Nippon Mining

& Metals

Japan Energy

Nippon MiningHoldingsJX Holdings

JX Nippon Oil&Energy

JX Nippon Oil&Gas Exploration

JX Nippon Mining&Metals

Unified brand

Annual sales: $97 BillionProfit: $2 Billion

2010FY Financial Performance

18,000Employee

JX Group Establishment, April 2010

5Copyright © 2010 JX Nippon Oil & Energy Corporation All Rights Reserved.

ComprehensiveComprehensiveEnergy CompanyEnergy Company

Integrated Operating SystemIntegrated Operating System

IGCCIGCC

FuelFuel

ElectricityElectricity

LubricantsLubricants

ChemicalsChemicals

BatteryBattery

Solar PVSolar PV

EnergyEnergySystemSystem

ProductsProductsSalesSalesBio FuelBio Fuel

BHDBHD

GTLGTL

ElectricityElectricity

CCSCCSHydrogenHydrogen

OilOil

HSFCCHSFCC

RefiningRefiningManufactureManufacture

CrudeCrudeOilOil

BiomassBiomass

NonNon--ConventionalConventionalOilOil

NaturalNaturalGasGas

SiliconSilicon

NaturalNaturalResourcesResources

CRICRI

HydrogenHydrogen

Fuel CellFuel Cell

BioBio--delivered Ethanoldelivered EthanolETBEETBE

JX’s Comprehensive Energy Strategy

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2．Why residential fuel cells developed ?

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City gas

Input Energy１００％１００％ Transmission Loss

▲５％

Energy Consuming Home

Energy Making Home

ElectricityElectricity４５％４５％

Thermal

Power PlantEnergy

Efficiency４０％４０％

or

LP gas Heat

４５％

Heat Loss▲５５％

Energy

Efficiency８５％８５％

ENEFARM

Conventional Thermal Power Plant

Input Energy１００％１００％

Heat Loss▲15％

ENE FARM

Electricity

４０％

No transmission loss

Higher Energy Efficiency of Fuel Cell

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LED bulbFuel cell for home use

Idling stop 28℃ set forAir Conditioner

CO2 reduction through various kinds of energy saving activities

（Source：The Energy Conservation Center, Japan）-1200㎏/year

1min/day reductionfor shower usage

1hr/day reductionfor TV watching

-58㎏/year

-40kg/year

-10㎏/year

-35kg/year

-30kg/year

CO2 reduction by residential Fuel Cell in Japan

ENEFARM

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3. Large Scale Demonstration project in Japan

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Hokkaido54

Tohoku96

Kanto1,530Chubu

340

Kinki529

Shikoku147

Kyusyu422

Okinawa8

Chugoku181

Source : NEW ENERGY FOUNDATION

Installation number of Fuel Cell Systems< Fukuoka Hydrogen Town >

Large Scale Demonstration Project(2005-8)& Hydrogen Town

Energy Supplier TotalJX(ENEOS) 1,512Tokyo Gas 796Other city gas companies 557Other oil companies 303Others 139Grand total 3,307

Intensive installation of 150 ENE FARMs by JX

World’s first model cityfor hydrogen energy

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25%

30%

35%

40%

45%

50%

55%

20% 22% 24% 26% 28% 30% 32% 34%

Power Generation(HHV)

Heat Recovery(HHV)

※Source : JX data at Large Scale Demo Project

FY2006(２２７ UNITS)

FY2007(２７５ UNITS)

FY2005(１３４ UNITS)

Model Year ［ＬＰＧ fueled］

av.42.1%

av.37.5%

av.45.5%

av.26.6%

av.30.3%

av.30.5%

Key Factors（１） Performance of Fuel Processor （ＦＰＳ）（２） Lowered Power consumption（３） Improved Heat Loss

※Actual data

Improved performance at the Project

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4．Commercialization of residential fuel cells in Japan

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FY2009 Model

Rated Output 750W

Power Generation

Heat Recovery

Size 280L

Fuel Natural Gas, ＬＰＧ

Hot WaterUnit

Tank Capacity 200Ｌ

GenerationUnit

Basic

Features

35%（ＬＨＶ）

50%（ＬＨＶ）

0

200

400

600

800

1,000

1,200

1,400

Sal

es U

nits

(thou

sand

uni

ts/y

ear

LPG NaturalGas

Kerosene HeatPump

Potential market

Domestic boiler sales in 2009 in Japan

$5,000/unit×2.7million=$13.5billion

ENERGY + FARM

Energy farm at home

「ENE・FARM」 and its potential market

14Copyright © 2010 JX Nippon Oil & Energy Corporation All Rights Reserved.

0

100

200

300

400

500

600

700

2009 2010 2011 2012 2013 2014 2015 2020

Year

Ann

ual F

uel C

ell S

ales

Uni

t

(Source: JX’s estimates)

Market Launch

(thousand units)

Market prediction for ENEFARM in Japan

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5．Challenges in residential fuel cells

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Cost reduction

Cost reduction

Current StatusCurrent StatusCurrent Status

１．Price ： ca. $30,000

２．Duration ： 40,000 hr

３．Reliability ： Failure rate <10％/yr

４．Power Generation ： 35％（LHV）

Total Efficiency ： 85％（LHV）

Required Spec. Required Spec. （（FY2015FY2015））

Less parts

１．Price ： < $5,000

２．Duration ： >10 year

３．Reliability ： Failure rate <1％/yr

４．Power Generation ： 35％（LHV）

Total Efficiency ： 85％（LHV）

ImprovementIn Performance

ImprovementIn Performance

Improvement of reliabilityImprovement of reliability

System Flow

Low Temp. Catalyst

Simplification of System

Quality Control

Mass production

Novel Material

20

Technical Challenges at ENEFARM

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5,000

1,000

2006 20092007 20152014201320122011201020082005 2006 20092007 20152014201320122011201020082005

7,700

2,500

5,820

4,810

1,200

500

3,290

Large Scale Demonstration Commercialization

COST

3,200Target PRICE

FY

Source : NEF( New Energy Foundation )

(×1,000 JPY/Unit)

Cost Reduction Target of ENE-FARM

18

PEFC SOFC

Operating Temp. About 80℃ About 750℃

Operation Daily Start up&Shut down Continuous

Size（1kW Class） 280L（09FY Model） 150L（09FY Model）

Power generation efficiency (LHV)

36% 45%

Fuel H2 H2、CO

PEFC SOFC

パワコン

電力

脱硫器

改質器

シフト

CO除去

脱硫器

空気

燃料

Water

セルスタック

加湿器

Power

Conditioner

FPS

Hot water Tank

Power

脱硫器

AirHeatExchanger

FuelFuel CellStack

H2

Humidifier

パワコン

Module

脱硫器

脱硫器

熱交換器

燃料

Air

COCO

改質器

セルスタック

電力脱硫器

Fuel H2・ COCO

FPS

Hot water Tank

HeatExchanger

Fuel Cell

Stack

Reform

er

Power

Conditioner

Power

Desulfurizer

Desulfurizer Heat

Exchanger

Reform

er

Shift

CO

Rem

oval

Hot water Tank

22

Characteristics of Solid Oxide Fuel Cell （SOFC）

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6．Toward future Low Carbon Society

20Copyright © 2010 JX Nippon Oil & Energy Corporation All Rights Reserved.

Nuclear Thermal Power

Battery

Energy Operating System

＜Large-scale Power Generation＞

Grid

Decentralized Power Generation Network Hydrogen

Pipeline

Fuel Cell Solar PV Battery

Electricity

Hospital

Condominium

Shop

Family House

Family House

ＳＳ

Smart Grid＞

EVPHEV FCVNext Generation Vehicle

Charging

Speed Charging Hydrogen

Total HomeEnergy System

Mega-SolarPower Generation

Energy System IntegratorThin film PV

Global Manufacturing and Sales

Refinery

Low-carbon Hydrogen

CCS

CO2

Low-carbon HydrogenTotal Energy Station

DecentralizedEnergy Management

Hydrogen

Low-cost Battery

Energy Operating System with IT Network（Smart Grid）

Electricity

Electricity

Operating

Information

Office Building

Total Energy Station

Energy network of Low carbon society