Nippon Oil established a subsidiary, Eneos Celltech Co., with Sanyo Electric Co. (TSE:6764) this past April. Eneos will install new equipment for producing fuel cells at Sanyo's Oizumi site.

It will start off by making 3,000 units a year, with aggregate output expected to reach 150,000 units by the end of fiscal 2015. Fuel cells generate electricity through chemical reactions of oxygen and hydrogen. The heat created through power generation is used to supply hot water. This energy-efficient method is expected to be widely adopted as the next-generation energy system for households.