Speech Transcripts

1. Introduction

1) Her Excellency Thordís Kolbrún R. Gylfadóttir, Minister of Tourism, Industry and Innovation, Distinguished guests, ladies and gentlemen, it is a great pleasure to speak to you at this very important gathering.

2) I would like to first sincerely thank our host country, the government of Iceland, and the city of Reykjavik for your kind hospitality.

3) When I was in elementary school, I immersed myself in the fascinating world of Jules Vernes' novel, A Journey to the Center of the Earth. Ever since, I dreamed of someday visiting Reykjavik. I am delighted to have fulfilled my childhood dream of experiencing firsthand the beauty of this place that so inspired Monseigneur Verne.

4) Iceland and Japan share several similarities. We live at the edges of the Eurasian tectonic plate. We both coexist with volcanoes and earthquakes, and we love taking a dip in hot springs. We also love seafood. And we are both committed to helping our partner countries unlock their geothermal potential. I am happy that Japan's geological sibling has invited me to share my views with all of you here today.

2. Key message

1) Today, we live in an era of unprecedented challenges. Global warming is an imminent threat calling for our immediate attention. The frequency and magnitude of storms and floods increase year by year. Earlier this month, I visited Fiji/Samoa and felt firsthand their governments' urgency to mitigate the effects of global warming.

2) And lack of electricity is also a matter of urgency. Without it, people lose out on the opportunity for quality education, health care, and to earn a livelihood. One billion people, however, still lack access to electricity. The International Energy Agency (IEA) estimates that in 2030, more than 600 million people, mostly in sub-Saharan Africa, will be left without access to electricity.

3) In 2015, the international community realized two significant milestones. One was the Sustainable Development Goals (SDGs). And the other was the Paris Agreement.

4) The SDGs and the Paris Agreement are two very ambitious undertakings. They underscore that business as usual will not get us to where we have to be by 2030.

5) The seventh SDG (to "ensure access to affordable, reliable, sustainable electricity for all") is closely interconnected with other SDGs, such as those for health, education, and productivity. So, failing to achieve SDG7 would mean failing to meet other SDGs as well. By the same logic, failing to reach the objectives of the Paris Agreement would mean leaving behind a hotter planet for our grandchildren. They will have to live in a world with more violent storms, major floods, droughts, and witness a massive number of people being displaced from their homes and even their homelands.

6) Achieving these goals will require utilizing every available option. My organization, the Japan International Cooperation Agency, JICA, is the largest bilateral donor in the world, with an annual portfolio of around 20 billion USD. We have offices in 96 countries, providing assistance ranging from loans and grants to volunteers and emergency relief. Last year, JICA adopted new principles of action for engagement; (1) Commitment,(2) Gemba (dive into the fields), (3) Strategy, (4) Co-Creation, and (5) Innovation. As the head of JICA, I stand ready to fully utilize every option to achieve these goals. So what shall we do as a global community to achieve these goals?

7) First, we must mobilize Renewable Energy and promote energy efficiency at the same time. Second, we need innovation not only in technology, but also in finance and policymaking. Third, it is essential to strengthen partnerships spanning various actors. Let me explain each point in detail.

3. De-carbonization and energy efficiency

1) To drastically reduce carbon emissions from current projected levels, we ought to increase the ratio of Renewables in our energy mix and reduce the amount of energy we actually use.

2) The role of Renewables in powering economies and empowering people has dramatically changed over the past decade. The cost of solar, wind, and batteries has decreased remarkably. Renewables are quickly overtaking coal to become the lowest cost option for some countries.

3) There is a lot we can learn from Iceland about transitioning into a decarbonized economy. According to what I heard, until early 1970s, Iceland depended on coal to generate power. Now, its power sector is almost 100% reliant on Renewable Energy. Not only that, it has taken full advantage of stable and high quality electricity to attract aluminum industries and data processing centers.

4) The secret to Iceland's success is geothermal energy. Geothermal energy has a unique role to play in the Renewables domain. Compared to solar and wind, it is stable and can be used as a baseload energy. It is dispatchable on demand, and is not vulnerable to climate change. The levelized cost of energy is also very competitive. Still, geothermal's large initial cost and upfront risk has prevented many countries from unlocking its vast potential.

5) But we must not be discouraged. There is now a window of opportunity that we can, and should, capitalize on. Currently, capital is migrating away from fossil fuels toward Renewables. And whereas thermal energy projects historically posed less risk than geothermal projects, their relative risk profiles are now becoming more balanced.

6) Mobilizing Renewables will substantially reduce the amount of CO2 we emit. Nonetheless, we must also reduce the total amount of energy we use. According to the IEA, utilizing Renewables and improving Energy Efficiency are the two top ways of reducing CO2 emissions. For our part, JICA assists partner countries in assessing their primary energy usage and identifying where the largest energy efficiency gains can be achieved.

4. Innovation

1) Secondly, we need innovation in technology, finance, and policy.

2) Technological innovation was, and will continue to be, the driving force for a decarbonized society. In the past decade, technological innovation drove down the cost of solar and wind by nearly 80%. Experts have continuously under-estimated the speed and extent of technological innovation. Nowadays, it's not surprising to see tariffs for solar as low as 3 US cents/kWh (kilo-watt hour), and for wind as low as 4 cents/kWh. Who would have expected that just five years ago?

3) Geothermal energy has not enjoyed the same level of attention as other Renewables. But there are promising technological innovations taking place nonetheless. For example, JICA in supporting Japanese universities and their counterparts in Indonesia and El Salvador to jointly develop new models of geothermal exploration using satellite imagery and thermo-luminescence technologies.

4) Iceland continues to be an innovation fore-runner when it comes to harnessing geothermal energy. In particular, the Iceland Deep Drilling Project, IDDP, plans to utilize energy extracted from 5,000 meters beneath the earth's surface. If successful, that could increase the world's geothermal energy potential by ten-fold. Iceland's energy-to-gas project could be another game changer. Hydrogen manufactured from geothermal energy can make the transport sector carbon-free.

5) But as we all know, geothermal energy has its shortfalls. Its large initial risk and upfront investment, plus location specificity are disadvantages compared to other Renewables. That's precisely why innovation in finance and policy is so vital.

6) As for financing, we need to scale up application of guarantees and insurance schemes. Similarly, we should work with funds like the Green Climate Fund to share risks.

7) On the policy side, Feed-in-Tariff (FIT) and PPP policies that enable private sector participation are critical. Moreover, governments need to meet investors' demand for a reliable grid that delivers energy without delay or loss. In Indonesia, JICA is supporting implementation of the government's IPP policy and operation of a test well drilling fund. We also support our partner countries to craft masterplans that focus on establishing reliable electricity grids with room for new power projects.

5. Partnership

1) A global challenge calls for a concerted action among all sectors of society, namely, governments, the private sector, academia, and civil society. Unlocking the full potential of geothermal energy is no exception, requiring a best-fit solution that deftly combines technology, policies, regulation, and finance. I say "deftly" because exploiting geothermal energy is still full of unknowns, as it is located deep under the earth's surface. That's one of the reasons why we have to join forces and mobilize all the collective knowledge we have.

2) On that note, I would like to congratulate the Global Geothermal Alliance (GGA) for coming together to set an ambitious goal of increasing geothermal power output five-fold and doubling geothermal heating by 2030. I truly believe that JICA's efforts will also contribute to this indispensable initiative.

3) I congratulate Iceland for your leading role in bringing geothermal to the forefront of the Renewable Energy debate.

6. Japan

1) I've emphasized the importance of taking a dual approach entailing de-carbonization and energy efficiency, as well as paying heed to innovation and partnerships. Let's see how Japan fares along these lines.

2) As for efficiency, Japan has a positive track record. Given its historical dependence on energy imports, Japan has been vulnerable to external shocks. This vulnerability manifested itself during the two oil shocks of the 1970s. At that time, the Japanese economy was forced to make efficient use of limited resources. That trying experience in turn prompted Japan to become a top performer with respect to energy efficiency.

3) The Great East Japan Earthquake of 2011 was another wake-up call for Japan. After the earthquake struck, power companies idled all nuclear power plants that had provided around 30% of our total electricity output. Nevertheless, we managed through the subsequent hot summer months, a peak electricity demand season. The experience reactivated our shared effort to save energy.

4) On the other hand, Japan lags behind in introducing Renewables domestically. We are now revising our policies to reduce bottlenecks and drastically change the role of Renewables in Japan's energy mix.

Renewables' share in our energy mix was half that of Germany or Spain in 2015. The generation cost for solar and wind in Japan is twice as high as in Europe, and there is limited connection capacity to the grid. Our government is currently debating what should be the energy mix for 2030, with some saying that we are not being ambitious enough.

5) As for geothermal energy, Japan has the third biggest geothermal potential in the world, but only 2% of it has been developed. There has been progress on this front recently, such as with the FIT policy revision and modifications to national park regulations. With such changes, the government plans to triple its geothermal power capacity by 2030.

6) Japan, too, has made good progress in technological innovation. The quality and energy efficiency of Japanese equipment and household appliances, as well as geothermal turbines, is world-class.

We are now developing solar batteries that can be painted onto surfaces, solid-state batteries, and hydrogen storing technologies.

7) As for partnerships, there is much scope for Japan to improve its performance. So far, JICA has financed the development of around 1.2 GW, or one-tenth of existing geothermal capacity worldwide. Over the last decade, we increased our lending to geothermal projects four-fold. But we have fallen short in linking our activities to wider global initiatives.

I promise everyone here today that JICA will ramp up its efforts to spur innovation alongside our partners, and to proactively share relevant lessons from Japan's experiences.

7. Investing in human capital

1) Earlier, I elaborated on the three issues that we need to address in order to achieve our shared goals. This cannot be done without investing in human resources more than anything. Yet it takes years and years of hard work to develop this most precious of resources. Iceland, New Zealand, and Japan started geothermal training courses in the 1970s, and to date thousands of engineers have received training through them. At this time, I would like to congratulate the UN University-Geothermal Training Programme for successfully conducting training courses for forty consecutive years.

2) JICA likewise offers training courses encompassing various roles within the geothermal sector. We have training courses for executives, geothermal engineers, and drilling managers. We also provide scholarships for geothermal professionals to obtain masters and PhD degrees from Japanese universities.

3) I am sure that many of you in the audience today are alumni of these training courses. Believe me when I say I am very honored that you are leading the development of geothermal energy around the globe.

8. Conclusion

1) Unlocking the earth's energy potential is not an easy task. But I assure you that if we join forces, we can achieve our goals. Innovations can break down barriers in technology, finance, and policy. Partnerships can break down institutional barriers. Investing in people can make this all possible.

2) From now on, please count me among those of you who are working diligently to achieve this crucial aspiration. With JICA's new principles: Commitment, Gemba, Strategy, Co-Creation, and Innovation, we stand ready to tackle these issues.

3) In the beginning of my speech, I shared with you my childhood dream. It is heartening to see that Iceland continues leading the world in a journey to the center of the earth. I would like to join hands with all of you to continue on this exciting journey. Thank you very much.