ft g thst t i ffuture growth strategies for the ... · solar power system mega solar power rooftop...

F t G th St t i fFuture Growth Strategies for the Environment and Energy-Related Business

Yuichi NishigorigORIX Corporation

Head of Energy and Eco Services Business Headquarters

September 11, 2014

Copyright © 2014 ORIX Corporation All rights reserved.

Contents

’ d l d ORIX’s Environment and Energy-Related Business

Renewable EnergyRenewable Energy

Power Liberalization Initiatives

Overseas Energy Business

R d R li B i Resource and Recycling Business

Copyright © 2014 ORIX Corporation All rights reserved. 1

ORIX’s Environment and Energy-Related Business


History of ORIX’s Environment and Energy-Related Business

Energy field Expansion of renewable b i

Started environment and energy-related business in 1990sEntry into power b sinessgy

Entry into wind power generation

Expansion of energy-saving services

Start of power generation business

energy business

S l

business

ESCO2000-

Electricity wholesale and retail (trading)

Solar power generation system sales and electric

power usage visualization

Biomass power plant operation

Solar power generation and

storage batteries

2010s2000s1990sLeasing

Waste treatment intermediation

1998-Establishment of

nationwide recycling systems

Waste treatment facility operation Metal resources

business

Environmental field

Network-buildingOperation of waste treatment facilities Launch of metal resources

business


Environmental field

Status of the Environment and Energy-Related Business

Target 1,000 MW in renewable energy

Environment and Energy-Related Business Assets Renewable Energy-Related Power Output

(JPY Bn) （MW）


Environment and Energy-Related Business Policies

In light of institutional reforms that followed the Great East Japan Earthquake including the new basic energy plan and power liberalization, ORIX is aiming to become a Comprehensive Energy Service Provider that contributes to stable supplybecome a Comprehensive Energy Service Provider that contributes to stable supply of energy that meet the needs of various consumers of electricity.

In Japan, ORIX will work to spread the use of renewable energy, an energy which can be produced domestically. ORIX aims to become one of Japan’s largest renewable energy provider in the next five years by developing diverse power sources including solar, geothermal, wind, and biomass power plants, while using h f d i iffthe feed-in tariff program.

In the overseas, ORIX will apply its strong technological capability to its overseas operations in providing services that promotes efficient energy use and contributes p p g p gyto stable supply of energy.

ORIX seeks to lead the industry in relation to the waste/recycle field to promote efficient use of resources such as urban mineefficient use of resources such as urban mine.

ORIX aims to take a leading role as a comprehensive environment and energy service provider by involving in both supply and demand of energy and also


resource cycle.

Energy Business: Core LineupRenewable Energy (Japan)

Mega-solar power generation

Biomass power generationp g gWood chip-fired thermal power plant.

Wind power generationInvestment in wind power

Rooftop solar power generation

pgeneration projects.34 units at 4 sites.

Geothermal power generation Ownership of one of the l t i t th llargest private geothermal power generating facilities in Japan.


Energy Business: Core Lineup

ESCOProvide comprehensive

Energy Services (Japan)

Power Producer and Supplier (PPS)

services related to energy conservation for buildings.

Supplier (PPS)Supply electric power at affordable prices mainly to private businesses in need of high-voltage power within the transmission

f T k El t i P

Demand Response ServiceSupport the reduction of

k l d d d

areas of Tokyo Electric Power, Kansai Electric Power and Chugoku Electric Power.

Bulk Electric Powerpeak electricity demand and electricity use.

Storage Battery

Bulk Electric Power Purchasing ServiceDevelopment of a bulk electric power purchasing service for multi-dwelling housing.Storage Battery

Related BusinessDevelopment of storage battery business

h h d

g g

together with NEC and EPCO. Rental of storage batteries to homes.


Energy Business: Core Lineup

Energy Services (Overseas)Biomass Power Generation

Independent Power Producer (IPP)

Investment in Nature’s Energy Solution (Singapore) (NESS), a biomass power generation company based in Singapore

Investment in South Korean coal-fired cogeneration power company GS E&R (formerly STX Energy)ORIX’s share of capacity: in Singapore.

Power plants in Thailand and Malaysia.ORIX’s share of capacity: 13 MW (Gross capacity: 30MW)

ORIX s share of capacity: 175MW (Gross capacity: 175MW) *In process of building 1190 MW coal-fired power plant (51% t k d b STX 30MW)(51% stake owned by STX Energy)

Investment in power generation company GBPC in the Philippines.ORIX’s share of capacity: 487MW (Gross capacity: 627MW)

Energy Conservation ServicesInvestment in energy conservation services company Enovity.Expansion of energy conservation


tools centered on Asia.

Renewable EnergyRenewable Energy


Solar Power Generation

Record showing top level of involvement in the solar power business

Rooftop solar powerMega solar powerSolar power system Rooftop solar power generation business

Mega-solar power generation business

Solar power system sales business Total

8912

891MW395 MW 424 MW 72 MW MW

Projects with firm deliveries through June 2014

Projects planned or starting construction or operations through June 2014

Projects planned or starting construction or operations through June 2014


Mega-Solar Projects

78 mega-solar projects with total power generation capacity of 424 MW are being constructed or in operation

Pl d d i 800 MW Planned to expand capacity to 800 MW

Development Plan FY14.3 FY18.3FY17.3FY16.3FY15.3

357 MWAccumulated projects

Projects in operation

670 MW 800 MW 800 MW 800 MW

133 MW 494 MW 710 MW 800 MW42 MWp

Construction planned

Under construction

In operation

2 MW class

3 MW to 10 MW

Over 10 MW


MW

Examples of Mega-solar Projects

Mega-solar power plant on a former airport siteMakurazaki CityMakurazaki City8.2 MW

Mega-solar power plant onMega solar power plant on a former golf-course siteMie Prefecture51 MW

Mega-solar in conjunction with

51 MW

motor sports Tokachi Speedway21.9 MW


21.9 MW

Biomass Power Generation

Wood chip-fired thermal power generation

Operation of Agatsuma biomass power plantp p g

Power generation capacity: 13.6 MWAnnual power transmission: 92 million kWhStarted commercial operations in Sep 2011Started commercial operations in Sep. 2011

Hibikinada Coal and Biomass Power PlantMixed coal and wood chip fired power generation

(Construction of two power plants planned)

Mixed coal- and wood chip-fired power generation

Power generation capacity: 110 MW

Soma Coal and Biomass Power PlantMi d l d d hi fi d tiMixed coal- and wood chip-fired power generation

Power generation capacity: 110 MW

Agatsuma Biomass Power Plant


g

Geothermal Power Generation

Operation of private geothermal power generation facilities at the Suginoi Hotel in Beppu City, Oita Prefecture

Effective use of geothermal energy as an operator of both the Japanese hot springs inn andEffective use of geothermal energy as an operator of both the Japanese hot springs inn and geothermal power generation businesses in Japan’s leading hot springs areas

inn

Ancillary facilities using hot springs

hot s

prin

gs

usin

ess

y g p g

”Tanayu” - Large outdoor hot springs bath

”Aqua Garden” - Large outdoor hot springs

”Aqua Beat” - Hot springs pool Expertise in both the

Japanese hot springs inn

Japa

nese

bu Contributing to the promotion of regional hot springs by conducting a hot-water supply business

Japanese hot springs inn and the geothermal power generation businesses

l h b

al p

ower

bu

sine

ss

Power generation capacity: 1,900 kW

Started operations in 1981, with operations

Revitalize the region by maximizing the potential of geothermal energy Result: preserve hot

i

Geot

herm

age

nera

tion

b p , pcontinuing after turbine upgrade in 2006

Surplus steam and hot water are used in the hot-water supply business

springs


Geothermal Power Generation

Target a total capacity of 30 MW in 5 years, primarily through 2 MW facilities

Suginoi Hotel (power generation capacity: 1.9 MW)Kazamaura Village, Shimokita County, Aomori

Prefecture (power generation capacity: 2 MW)Prefecture (power generation capacity: 2 MW)Survey location: the area surrounding Shimofuro hot spring site in Kazamaura Village, Shimokita County, Aomori Prefecture

Survey content: Physical exploration

Survey period: June 2014 to February 2015 (tentative)

Hakodate City, Hokkaido Prefecture (Power generation capacity: 2 MW)(Power generation capacity: 2 MW)Survey location: Minamikayabe Region, Hakodate City, Hokkaido Prefecture (in the vicinity of Mt. Nakitsura)

Survey content: Initial stage survey

Survey period: June 2014 to October 2014(tentative) Suginoi Hotel geothermal power generating facility


Wind Power Generation

Power generation capacity Business partner Investment stake Invested

Target 150 MW in 5 years

Akitaaraya Wind Farm (Akita Prefecture) 6.8 MW EcoPower 19% Feb. 1997

Tachikawa Wind Farm (Yamagata Prefecture) 3.2 MW EcoPower 5% Sep. 1995

Goto-Kishiku Wind Power Plant (Nagasaki Prefecture) 1.2 MW EcoPower 19% Apr. 1997

Nikaho Kogen Wind Power Plant (Akita Prefecture) 24.7 MW J-POWER 20% Apr. 2000

Akitaaraya Wind Farm Tachikawa Wind Farm

Goto-Kishiku Wind Power Pl

Nikaho Kogen Wind Power Plant

Plant


Renewable Energy Business Policies

The current fiscal year will likely be the final year to source mega-solar projects (decrease in optimal sites and grid capacity limitations)

Step up installation of solar power systems on rooftops over the medium to long term (decrease in Step up installation of solar power systems on rooftops over the medium to long term (decrease in unit power generation costs due to technological advancement, and combinations with storage batteries, etc.)

Focus on developing power generation from wind geothermal biomass and other sources

<Solar power generation> mega-solar + rooftop solar power generation

Increase to around 930 MW (Mega-solar: 800 MW; Rooftop solar power generation: 130 MW)

Focus on developing power generation from wind, geothermal, biomass and other sources

( g ; p p g )

Total project cost: ¥250 billion

<Geothermal power generation>

Target 30 MW through small to medium-sized power generation facilities (5 years)

In parallel, prepare large projects with longer development periods

<Wind power generation>p g

Plan to develop mainly offshore wind power system

<Biomass power generation>

l b l


Plan to construct 220 MW biomass power plants

Power Liberalization InitiativesPower Liberalization Initiatives


Business Initiatives Targeting Power Liberalization

2015 Establishment of regional grid operator2015 Establishment of regional grid operator

2016 Full liberalization of electricity retailing market 2016 Full liberalization of electricity retailing market

From 2018Separation of power generation and transmission, real-time

market, gas market liberalization

From 2018Separation of power generation and transmission, real-time

market, gas market liberalization

de: p

ower

io

n an

d em

ent Solar, wind, geothermal and biomass

der

Supp

ly si

dge

nera

tipr

ocur

e

High-efficiency coal-fired thermal power and gas co-generationNo.1 in renewable

energy vice

pro

vid

and

High-voltage power sales

No.1 in PPS profit

ener

gy se

rv

side:

supp

lyst

orag

e

Gas retailing and wholesalingBulk electric purchasing service for condominium

Entry into low-voltage power sales

rehe

nsiv

e e

Dem

and

Storage battery rental: 100,000 units

Bulk electric purchasing service for condominium buildings: 100,000 units

Aggregator Com

p


Electric Power Sales

Target 1 million kW in FY17.3• Started supplying power to ordinary users as a PPS (specified-scale electricity utility) on May 1, 2009

• Electricity is currently supplied inside the service areas of Tokyo, Kansai, and Chugoku Electric Power. ORIXElectricity is currently supplied inside the service areas of Tokyo, Kansai, and Chugoku Electric Power. ORIX has entered into power contracts with around 2,000 companies nationwide (4,000 contracts)

• Commenced sales activities in the Chubu Electric Power service area in April 2014

• Utilize sales network in Japan

• Target 1 million kW in supply of high-voltage power in 2017 and consider entry into low-voltage market in accordance with full liberalization of electricity retailing market

• Secure power sources needed to reach this target through a combination of in-house power generation and procurement from third parties

In-house power generation

procurement from third parties

Operate a wood chip-fired thermal power station (13.6 MW) in Gunma Prefecture

Plan to build 110 MW mixed coal- and biomass-fired power plants in Soma and Kitakyushu City

p g

p p y y

Purchase solar power


Contracted Power by Supply Area

(kW)

Expanded the supply area to commence sales activities in the Chubu Electric Power service area in April 2014(kW)

9%

38%

53%


Overseas Energy BusinessOverseas Energy Business


Overseas Expansion

South Korea: GS E&R (Formerly STX Energy)Provides coal-fired thermal power co-generation services STX

Operations include power generation and energy conservation business

U.S.: EnovityProvides coal fired thermal power co generation services. STX Energy is currently constructing a 1,190 MW ultra supercritical coal-fired thermal power plant.

Provides energy consumption reduction and optimization services. Customers include advanced facilities of federal and state

Hong Kong: ADB

2

advanced facilities of federal and state governments, power and gas utilities, and global corporations.

Established a fund targeting environment-related businesses (renewable energy, energy services (energy conservation business, etc.)) and infrastructure (water business, etc.) in emerging Asian countries.

B d ll f f d b ADB ORIX d

1

Based on a call for fund managers by ADB, ORIX and Robeco jointly applied and were selected as fund managers.

Philippines: Global Business Power

Singapore: Nature’s Energy SolutionA power generation company based in the Visayas region. Owns and operates nine power plants with a total powerSingapore: Nature’s Energy Solution Owns and operates nine power plants with a total power generation capacity of 627 MW.Investment in operating companies of biomass power

plants using palm oil in Thailand (9 MW) and Malaysia (10 MW x 2 plants).


Overseas Expansion (GBPC & Enovity)


Overseas Expansion (ADB Fund)

Asia Climate Partners L.P.Name of fund

1 R bl

Size of fund USD 750 million – 1 billion

1. Renewable energy Wind, solar, hydroelectric, biomass, geothermal, waste heat utilization, etc.

2. Energy servicesESCO i ti i ti ffi i

Investment targets

ESCO service, energy conservation service, co-generation, energy efficiency, energy conservation for public transportation, etc.

3. Renewable energy-related supply chainsWind turbines, solar modules, energy conservation-related parts, electric vehicle

l d bparts, water supply and sewer business, etc.*Excluded: construction, operation and expansion of coal, oil and nuclear power generation facilities; manufacturing of nitrogen and chlorofluorocarbons, etc.

f Investment in funds, direct investment

Target i Developing countries (including China and India) in the ADB operating area (Asia-Pacific

Type of investment

Investment in funds, direct investment*Funding methods include equity investments, mezzanine investments, convertible

bonds, and preferred shares

investment regions

Developing countries (including China and India) in the ADB operating area (Asia Pacific region)

Fund managers ORIX, Robeco, and ADB will jointly manage the fund. A fund management headquarters h b t i H K


g has been set up in Hong Kong

Overseas Expansion (Alliance with Robeco)

Robeco has been expanding its business primarily in Europe and the U.S.

ORIX h lid t k i A i th Middl

Outline of Robeco Established: 1929 Headquarters: Rotterdam, the Netherlands

ORIX has a solid network in Asia, the Middle East and Japan

Further accelerate global business expansion

CEO: Roderick Munsters (Robeco Group) Business: Asset management company Locations: Headquarters; sales offices: 12;

investment and sales offices: 8investment and sales offices: 8


R d R li B iResource and Recycling Business


Resource and Recycling Business

Metal waste processing machinery

Stockyard

Processing volume: 56 000

ORIX Eco Services Corporation, Funabashi Plant

Processing volume: 56,000 tons per year

High-temperature reactor that melts waste

Stockyard ORIX Environmental Resources Management C ti Y ii Pl t

melts waste

Processing volume: 120,000 tons per year


Corporation, Yorii Plant

Disclaimer

These materials have been prepared by ORIX Corporation (“ORIX” or the “Company”) solely for your information and are subject to change without notice. The information contained in these materials has not been independently verified and its accuracy is not guaranteed. No representations, warranties or undertakings, express or implied, are made as to, and no reliance should be placed on, the accuracy, fairness, or completeness, or correctness of the information or the opinions presented or contained in these materials.

These materials contain forward-looking statements that reflect the Company’s intent, belief and current g p y ,expectations about future events and financial results. These statements can be recognized by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects,” “intends,” or words of similar meaning. These forward-looking statements are not guarantees of future performance. They are based on a number of assumptions about the Company’s operations and are subject to risks, uncertainties and other factors beyond the Company’s control. Accordingly, actual results may differ materially from these forward-looking statements. Factors that could cause such differences include, but are not limited to, those described under “Risk Factors” in the Company’s most recent annual report on Form 20-F filed with the U.S. Securities and Exchange Commission and under “Business Risk” of the securities report (yukashouken houkokusho) filed with th Di t f th k t l l Fi Bthe Director of the kanto local Finance Bureau.

Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security, commodity or other instrument, including securities issued by the Company or any affiliate thereof.


Additional InformationFor annual and more historical data please access our website. A list of major disclosure materials is given below.

ORIX W b i URL h // i j / / /ORIX Website: URL: http://www.orix.co.jp/grp/en/IR Website: URL: http://www.orix.co.jp/grp/en/ir/

If ld lik b i l d d il li f j lIf you would like to be included on our e-mail list for major news announcements, please send your request to the address below.

ORIX Corporation Corporate Planning Department

World Trade Center Building., g ,2-4-1, Hamamatsu-cho, Minato-ku,

Tokyo 105-6135, Japan

T l 81 3 3435 3121Tel: +81-3-3435-3121 Fax: +81-3-3435-3154

[email protected]


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