Distributed Energy System - pooling heat and power -

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1 Distributed Energy System - pooling heat and power - 22nd September, 2004 IPCC Expert Meeting, Tokyo, Japan Hiroshi Ozaki

2 Introduction The 21st Century - the Age of Natural Gas abundant reserves and low environmental impact Japan's Energy Policy and Energy Supply / Demand Prospects shift to natural gas increasing use of distributed energy systems Role of Japanese gas utilities to improve the efficiency & economics of natural gas cogeneration systems to promote distributed energy networks 1

3 Performance Distributed Energy System vs. Centralised power system effective use of exhaust heat and no transmission loss energy savings through combination of energy systems (ie. distributed +distributed or distributed + centralised) Reliability low risk of investment = high probability to materialise additional power source improvement in the stability of power supply for customers Diversity players increase in number and competition brings efficiency improvement 2

4 Natural Gas Combustion Products (Coal = 100) Natural Gas 0 SOx Oil 70 Coal 100 Natural Gas 60 CO2 Oil 80 Coal 100 Natural Gas NOx Oil 70 Coal 100 System Efficiency (Source: The Institute of Energy Economics, Japan) Auxiliary equipment 1.8 High efficiency gas engine ( kW) 34.2 Electricity Large-scale centralised power station 100 Generating efficiency 36% Exhaust heat recovery rate 31.5% Hot water Heat pump water heater COP4 7.9 Efficiency through to end user 36.6% 115 Waste heat 3

5 CO2 Reduction Potential Sector *Installation potential (GW) **Estimated CO2 mitigation (million t-co2) Consumer/ residential 14 9 Consumer/ commercial Industrial Total Equivalent to 6.2% of Japan's greenhouse gas emissions in 1990 * Installation potential : "New Energy Potential and Economy" (METI, January 2000). ** CO2 mitigation : estimated by Japan Gas Association. 4

6 Prospects of Distributed Energy [Prospects for distributed energy systems in a scenario with progress in energy saving ] [Share of natural gas cogeneration in the total generating markets (FY 2000):capacity base ] 3,500 3,000 2,500 2,000 1,500 1, [x 10MW] Others HFO Fuel oil Kerosine Kerosene LPG Natural gas Gas % ( Source: "Prospects for Energy Supply and Demand in 2030" (METI, June 2004) ) Estimated CO2 reduction: 24 million t-co2 (JGA estimates) FY 2010FY 2030FY Netherlands Denmark Germany Italy UK USA Japan (2003) Incentives available in Europe subsidies for installing facilities tax incentives (exemptions from environment tax, etc.) subsidies for development of technology, etc. 5

7 R&D on the Efficiency Electrical efficiency (% LHV) SOFC GE PEFC GT Note: SOFC: solid oxide fuel cells, PEFC: proton-exchange membrane fuel cells, GE: gas engines, GT: gas turbines (Source: Surveys for Formulation of Policy for Energy Technology Strategy (in the Field of New Energies) (MITI, March 2000)) 6

8 Energy Pool Natural gas pipeline network Condominiums Homes Hydrogen stations Next-generation microcogeneration/fuel cells Residential LNG terminals cogeneration/fuel cells Natural gas/fuel cell vehicles Stores Internet Solar power Wind power Eco-stations Next-generation cogeneration/fuel cells Hospitals Electric power networks Factories Fuel cell vehicles Waste treatment plants Trading in electricity Electricity from waste Trade in heat Trading in Hydrogen Hydrogen stations Next-generation cogeneration/fuel cells Hydrogen stations Large-scale centralised power station 7

9 Roppongi Hills : an example Roppngi Hills Mori Tower Cold water Electricity Steam Grand Hyatt Tokyo Keyakizaka Complex Cold water Electricity Steam Hollywood Beauty Plaza Keyakizaka Terrace Roppongi Hills Residence Cold water Electricity Steam TV Asahi Roppongi Hills Gate Tower Cold water Steam Grand Hyatt Tokyo Roppongi Hills Mori Tower Roppongi Hills Residence Keyakizaka Terrace Roppongi Hills Residence Hollywood Beauty Plaza TV Asahi Heat supply piping Keyakizaka Complex Steam Electricity Exhaust gas Exhaust heat boiler Steam boiler City gas Steam Generator Generator City gas Steam absorption Steam injection gas turbine Back-pressure chiller steam facilities Steam Electricity receiving facilities Backup electricity Electricity supply facilities District heating and cooling facilities (Complementary power supply) <Effect of distributed energy system (estimated) > Reduction in primary energy consumption: 20% Reduction in CO2 emissions: 27% 8

10 Agenda for the Future Potential sites for heat and power pooling: More than 1,000 locations identified in Japan (Source: Japan District Heating & Cooling Association) Coordinated action by the national and the local governments with private sectors to make pooling a standard feature of urban development projects to take the initiative in introducing core facilities of pooling to incorporate renewable energies, etc. Easy access method to the power grid 9

11 Business Creation Service Variety Flow of onsite energy service business Diagnosis for energy savings Procedures for system introduction /adjustment Procurement of equipment Installation work Equipment ownership Operation/control Inspection and maintenance Measuring/remote monitoring Areawide load adjustment (Electricity/heat etc.) LNG purchasing Gas supply Financial services ESCO, ESP businesses Entry into new market Business expansion Engineering companies Trading companies Heavy electric manufacturers Energy appliance manufacturers Construction and construction materials companies Building management companies Energy supply companies (Gas, electricity, oil, etc.) Financial institutions (Banks, securities companies, leasing companies, etc.) Users Power supply cogeneration *Solid lines mark core business areas 10

12 Conclusions Connecting distributed energy systems to local area networks to maximise energy efficiency, to provide new business opportunities, to make a variety of services available to customers. Japanese experience and technology will be transferred overseas by ESCO s and ESP s as their business expands, which is the key to achieving energy savings and CO2 reductions on an international basis. 11