Japan s Experience on Smart Community

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1 Ministry of Economy, Trade and Industry Japan s Experience on Smart Community May, 2015 Toshihiko Fujii Deputy Commissioner for International Affairs Agency for Natural Resources and Energy Ministry of Economy, Trade and Industry, Japan

2 Japan s New Energy Mix (Preliminary) Direction (1)To improve the self-sufficiency ratio to around 25% surpassing the level before the Earthquake. (2)To reduce the electricity costs lower than today. (3)To set a high-level GHG reduction goal compared with other developed countries to lead the world. GDP growth 1.7%/year Energy conservation 196TWh ( 17%) Energy Conservation +Renewable Energy = about 40% Electricity generation mix (Total Electricity generation ) 1,065TWh Renewable Energy 22~24% Geothermal 1.0~1.1% Bioenergy 3.7~4.6% Wind 1.7% Solar PV 7.9% Electricity Demand 967 TWh Electricity Demand 981 TWh Nuclear 22~20% LNG 27% Hydro 8.8~9.2% Coal 26% 2013 ( actual results) Oil 3%

3 Components of Smart Community Optimization within/beyond community Optimization in individual households, buildings and factories Power CompanyA HEMS Distributed Generation (PV, Cogeneration, FC etc) GE Power CompanyB CEMS BEMS Energy Saving devices FEMS Power CompanyZ Energy Storage (battery, EV, heat storage, etc.) 2

4 Multifaceted Aims of Smart Community/Grid More Renewables / Less diesel usage More distributed power source (reduce blackout risk, transmission loss) Energy saving / Higher energy efficiency Reduced peak demand Higher grid stability Less electricity theft Goals, priorities and solutions depend on the state of each country.

5 Structural Change in Electricity Market Distributed (Renewables, Cogeneration, etc.) Smart Community Centralized & Independent Interaction between Demand and Supply (Smart Meter, HEMS/BEMS/FEMS, Demand Response)

6 Smart Community and Smart Grid geographical Country State Region City Industry Zone District Centralized Power Source Demand Response Smart Grid Distributed Power Source Smart Community Cogeneration Water/Sewage/ Waste Mgt. EV Charging System H2 station Parks Public Transport Road Planning Community Activity Factory Building Home FEMS/BEMS/HEMS Rooftop PV etc Fuel Cell Heat Pump EV/FCV Components Electricity Energy (heat/gas/h2) Utility Transport Living Environment 5

7 Smart Communities Demonstrations in Japan( ) Housing complex 700 households without PV Large Scale Demand Response Test Keihanna Science City Kitakyushu City Independent supply area Separated from EPCOs grid Power supplied by Nippon Steel & Sumitomo Metal Corporation. Real-Time Pricing Wide-area metropolis 34 companies participated 4000 households with HEMS 10 large-scale buildings and BEMS Multiple storage batteries introduced with CEMS Yokohama City Toyota City Separate housing 67 households Tested HEMS to optimize solar panels, household fuel cells, EV and storage batteries. Tested advanced EV car sharing system 6

8 Image of Yokohama City MEMS Isogo Tokyo Gas company housing Solar panel JX Nippon Oil & Energy company housing Fuel cell Fuel cell Integrated BEMS Taisei Technology Center (Higashi-Totsuka/5 buildings) (Taisei Corporation, Toshiba) Housing complex HEMS Condominium HEMS (Tokyo Gas, NTT-F, NTT DoCoMo) (Toshiba, Mitsui Fudosan, JX-E Integrated BEMS (Toshiba) Landmark Tower (Mitsubishi Estate, Toshiba) Ito-Yokado (JGC Corporation) Yokohama Mitsui Building (Mitsubishi Estate, Toshiba) Minato Mirai Grand Central Tower World Porters (Marubeni, Toshiba) Meidensha, NEC MM34 Square (Commercial facilities) (Mitsubishi Estate, Toshiba) CEMS Large-scale demand response demonstration targeting 4,000 households, etc. was initiated in April of Aim to control use of energy and a peak cut of approximately 20%.

9 Toyota City (Smart Houses) Model Home Specifications (Exterior) Exterior Solar panel (3.2 kw) Secondary cell (5kWh) Ene Farm EcoCute (370L) Charging stand (supports V2H)

10 Large-scale Demand Response demonstration in Keihanna \20 20 円 notification stating that the following day is a day on which the hypothetical pricing is applied Hypothetical price 仮想料金 (example) ( 例 ) (Yen/kWh ( 円 /kwh) \100 円 ) Midnight 1:00 P.M. 3:00 P.M. Midnight 0 時 13 時 15 時 24 時 Dynamic Pricing Demonstration in Kitakyushu

11 Demand Response 1. Price-based DR - Demand reduction by flexible rate structure, set by retailers. - Various types of pricing (TOU, CPP Realtime etc.) - 4 demo projects used this type. - Market reform will trigger this pricing scheme. 17:00 In the daytime Let s reduce our use of electricity! 23:00 In the peak time In the night In the daytime 10:00 7:00 Control the power demand smartly by DR Electricity Demand (kw) In the peak time 2. Incentive-based DR (Negawatt trading) - EPCO purchase demand reduction from DR aggregator. - Ensures demand predictability for EPCO - Last March, METI issued the guideline for Negawatt Trading. negawatt inc ent ive Power company Aggregator negawatt inc ent ive Customer of industry and business 10

12 About 20% peak reduction was achieved by Critical Peak Pricing (CPP) Demand Reduction by CPP [Kitakyushu] CPP price FY2012 Summer FY2012 Winter FY2013 Summer 50 yen/kwh -18.1% -19.3% -20.2% 75 yen/kwh -18.7% -19.8% -19.2% 100 yen/kwh -21.7% -18.1% -18.8% 150yen/kwh -22.2% -21.1% -19.2% Demand Reduction by CPP [Keihanna] CPP price FY2012 Summer Basis price:17.55 yen/kwh FY2012 Winter FY2013 Summer +40yen/kWh* -15.0% -20.1% -21.1% +60yen/kWh* -17.2% -18.3% -20.7% +90yen/kWh* -18.4% -20.2% -21.2% *Additional price to the original rate 11

13 Issues and Challenges Policy Measures 1) Electricity Market Reforms (retail liberalization, unbundling T/D sector) 2) Introduction of Smart Meter to all Households by ) Rule-making e.g. Negawatt Trading Guidelines New business opportunities for distributed power generators, ancillary services, demand response aggregators, CEMS service etc. By % by Energy Saving - 22% by Renewables 12

14 Thank you for your kind attention