Actions for Climate Change: Working to Reduce CO2 Emissions at Customer Sites
- Aspects Determained as Materiality
Principle and Outline
Contributing to realizing a low-carbon or decarbonized society in line with the worldwide trend toward action against climate change requires taking steady steps to reduce CO2 emissions until decarbonization technology is established. The Daigas Group believes that it is important to reduce not only GHG emissions from its own business activities but also CO2 emissions at customers’ sites. We are seeking to assist customers in reducing their CO2 emissions by popularizing the use of natural gas as clean energy and developing and proposing highly energy-efficient equipment. We are also cooperating with our business partners and affiliated companies to reduce CO2 emissions from logistics.
We announced the Daigas Group Carbon Neutral Vision in January 2021 and the Medium-Term Management Plan 2023: Creating Value for a Sustainable Future in March of the same year to further accelerate our efforts toward low-carbon or decarbonized business operations.
Benefits of Energy Saving and Reductions of CO2 Emissions
Third-party verification completed Osaka Gas underwent a third-party review by Bureau Veritas Japan Co., Ltd.
CO2 emissions reduced by approx. 3.63 million tons at customer sites
The Daigas Group has proposed and sold various products that can help reduce CO2 emissions and thereby contribute to the curbing of climate change. Those products include the “Ene-Farm” fuel cell and the “Eco-Jozu” highly energy efficient water heater, both for residential use. Marketed for commercial and industrial use were gas cogeneration systems, gas absorption chiller, gas engine heat pump (GHP) and natural gas vehicle (NGV). CO2 emissions at the end of FY2020 declined by a cumulative total of 3.63 million tons from the base year of FY2009 thanks to the introduction of these products.
Approaches at Customer Sites (Households)
Household cogeneration systems
To help realize a low-carbon society, Osaka Gas is striving to sell and disseminate two types of fuel-cell systems that generates electricity through chemical reactions between the hydrogen extracted from city gas and oxygen in the air, which are polymer electrolyte fuel cells (PEFC) and solid oxide fuel cells (SOFC) sold as “Ene-Farm” and “Ene-Farm type S,” respectively as co-generation systems for household use that help conserve energy and reduce CO2 emissions. These are high-efficiency energy systems that make effective use of the heat generated alongside electricity to supply hot water.
In FY2020, Osaka Gas developed a new product of ENE-FARM Type S*1 in collaboration with Aisin Seiki Co., Ltd., Kyocera Corporation, Noritz Corporation, Purpose Co., Ltd., and Rinnai Corporation. The new product was launched in April 2020.
This product attains the highest power generation efficiency in the world*2 of 55%.*3 Installation has been improved by significantly downsizing the main unit. A convenient switch, which has been added to the remote controller, works with a special smartphone app, enhancing the product’s IoT function.
As of the end of March 2021, a cumulative total of about 140,000 Ene-Farm and Ene-Farm type S units had been sold, helping reduce CO2 emissions by about 257,000 t-CO2*4 annually, which is equivalent to the planting of about 18.49 million sugi cedar trees.*5
- *1 ENE-FARM Type S is an environmentally friendly energy system that generates power through a chemical reaction between hydrogen, which is extracted from clean natural gas, and oxygen in the air. The generated power can be used at home, and hot water generated in the power generation process can also be used effectively. In development, we utilized some of the results obtained from the project commissioned by the New Energy and Industrial Technology Development Organization (NEDO).
- *2 The highest power generation efficiency in the world in terms of fuel cells for household use whose rated output is 1 kW or less (based on a survey conducted by Osaka Gas as of the end of January 2020).
- *3 Power generation efficiency when rated power generation is continued for at least three hours (e.g. under the surplus electricity purchase system). In the cases other than the above, the rated power generation efficiency is 54% (overall efficiency: 87%). The power generation efficiency for LP gas is 53% (overall efficiency: 85%). The values were calculated based on the Lower Heating Value (LHV).
- *4 Our estimate of the annual CO2 emissions reduction achieved by replacing conventional gas water and room heating systems with Ene-Farm and Ene-Farm type S units (on the supposition of the unit of a four-member household living in a single-family house); [Conventional systems] Gas water and room heaters, gas hot water floor heaters (for living and dining rooms), gas hot water bathroom heater-dryers with a mist sauna function, gas stoves, electric air conditioners; [Ene-Farm and Ene-Farm type S] Ene-Farm units, Ene-Farm type S units, gas hot water floor heaters (for living and dining rooms), gas hot water bathroom heater-dryers with a mist sauna function, gas stoves, electric air conditioners; [CO2 emissions factors] Gas: 2.29 kg-CO2/m3 (in-house data), electricity: 0.65 kg-CO2/kWh (average factor for thermal power for FY2014 shown in the Japanese government’s Plan for Global Warming Countermeasures [approved by the Cabinet in May 2016])
- *5 Unit CO2 absorption of one sugi cedar tree = 13.9 kg-CO2/year (on the supposition of a 50-year-old sugi cedar tree with a diameter of 26 cm and a height of 22 m; source: 1997 White Paper on Forestry)
■ Cumulative Sales Total of the Fuel Cell Systems
For more details, click here for the press release “Osaka Gas to Release a New Product of ENE-FARM Type S, Household Fuel Cells Characterized by the Highest Power Generation Efficiency in the World and Improved Installation due to Significant Downsizing”
“Eco-Jozu” high-efficiency water heater
The “Eco-Jozu” high-efficiency water heater is able to recover the exhaust heat produced during combustion that is ordinarily lost and utilize it to heat water or room spaces; this saves considerable energy and helps mitigate global warming by reducing CO2 emissions.
A cumulative total of about 1,042,000 “Eco-Jozu” units had been sold as of the end of March 2021, helping cut CO2 emissions by 251,000 tons per year.
■ “Eco-Jozu” High Efficiency Water Heater
Participation in the Blue & Green Project creating forests through gas
Osaka Gas promotes the use of high-efficiency residential gas equipment, and since June 2006 has joined a group of 23 gas companies and gas equipment manufacturers in the Blue & Green Project, which aims to pass on to future generations an abundantly green planet.
The project is two-fold—selling energy-saving gas equipment and planting trees—both aiming to benefit the environment. Originally, this project was set up around the EcoWill residential gas engine cogeneration system and two models of the Eco-Jozu high-efficiency residential hot-water supply system. In FY2010, the Ene-Farm residential fuel cell cogeneration system was added as a new type of residential gas equipment. The first phase of the project that provided support for tree planting in Vietnam ended in March 2014. With the start of the second phase in April 2014, support was extended to reestablish the Takata-Matsubara pine forest in Rikuzentakata, Iwate Prefecture, completely destroyed in the 2011 Tohoku earthquake and tsunami.
Since project’s launch in June 2006, the number of energy-saving units sold that belong to the project rose from one million cumulatively in 2009, which was the initial target, to two million in October 2011 and on, to the present total of 9.98 million units as of March 31, 2021. This increasingly widespread use contributes to a reduction in CO2 emissions of 2.96 million tons annually, calculated by combining the amount of CO2 absorbed by the trees planted with emissions reductions from the equipment. The number of systems sold by Osaka Gas that are contributing to this reduction is approximately 1.18 million as of March 31, 2021.
Solar power generation
Growing interest in the feed-in tariff for renewable energy and in energy security since the Great East Japan Earthquake has encouraged an expanding number of customers to introduce solar power generation systems. Responding such needs, Osaka Gas prepared a series of equipment for home generation including gas co-generation systems and solar power generation systems for residential use. A cumulative total of about 31,000 units had been sold as of the end of March 2021, helping reduce CO2 emissions by 63,000 tons per year.
We are also recommending “Double Power Generation” that combines a solar power generation system with “ECOWILL” or “Ene-Farm.” We have sold customers a cumulative total of about 47,000 units as of the end of March 2021.
High-efficiency residential gas stoves
Easy-to-use stoves that meet the criteria of the Rational Energy Use Act
Gas cooking stoves with safety devices
(Si Sensor-Equipped Cooking Stove)
The Daigas Group has been working on the basic performance of daily-use gas stoves for consumers—improving the stoves’ cooking performance and making them easier to use and clean —while also working to improve energy efficiency. We have made advances to optimize the burner shape, trivet (pot stand) height, and grill structure, and developed one improved product after another.
At present, the gas stoves sold by the Daigas Group—both countertop and built-in units—fully meet the criteria of the Act Concerning the Rational Use of Energy set in FY2007 for stove burners and in FY2009 for grills (exempting those items not covered by the law).
Supplying information on how to save energy
“Smart Living Illustrated Tips” section
(Osaka Gas website, Japanese language only)
The Daigas Group uses a variety of media to provide information to consumers on energy conservation, including useful tips on how to save energy.
The meter reading slip provided to residential customers lists not only the current month’s usage, but the amount used in the same month of the previous year, making it possible to compare home gas usage. The Osaka Gas website also features a “Smart Living Illustrated Tips” section, which introduces examples of energy-saving actions to take and their effects. The company also produces a “How to Use Gas Safely” booklet and other materials that are distributed to customers when periodic gas checks are conducted to assist in learning how to save energy, how to maintain gas equipment, etc.
Reduction of CO2 Emissions at Customer Sites (Business / Industrial Use)
Technological development and the spread of gas co-generation systems
Distributed energy systems generate power at the site where power is consumed and utilize waste heat from the power generation process for hot water supply and air conditioning. Thus, distributed energy systems are highly economical and environmentally friendly. The Daigas Group is striving to popularize and technically develop gas cogeneration systems that use eco-friendly gas as fuel for business/industrial use in factories, offices, and commercial facilities.
Since releasing the first commercial-use micro-cogeneration system in 1998, we have expanded our lineup of cogeneration systems with power outage response capability. Due to their superior power-saving capabilities, these systems have been widely used in factories, hospitals, public welfare facilities, hotels, spas and restaurants. As of the end of March 2021, there were 4,691 cogeneration systems under operation in the Osaka Gas service area with a combined output capacity of 1,542,000 kW.
In order to meet the diverse needs of customers, we are developing technology to further improve energy efficiency and reliability.
We will continue to step up energy saving efforts in the future and contribute to reducing environmental impacts by expanding sales of cogeneration systems.
■ Commercial and Industrial Cogeneration Systems: Cumulative Total of Installed Capacity and No. of Units
2020 TOPIC) Starting commercial operation of a high-efficiency gas turbine power generation system at Mitsui Chemicals Osaka Plant
—Contributing to reducing CO2 emissions by introducing a distributed power source—
Full shot of the high-efficiency gas turbine power generation system
Daigas Energy Co., Ltd., a wholly owned subsidiary of Osaka Gas, has installed a high-efficiency gas turbine power generation system at the Osaka Plant of Mitsui Chemicals, Inc. The system started commercial operation on December 1, 2020.
This joint project with Mitsui Chemicals has been granted the FY2018 Subsidy to Support the Promotion of Investment in Energy Conservation by the Ministry of Economy, Trade and Industry (under the Program to Support Operators of Energy Use Rationalization Business).*1
The high-efficiency gas turbine power generation system has been introduced at Mitsui Chemicals Osaka Plant under an energy service agreement.*2 The system is fueled by city gas to operate, and it serves as a distributed power source to supply electricity and heat to the plant. The system raises the in-house power generation rate of the plant, contributing to cutting peak power consumption. Moreover, hot exhaust gas from the system is recycled as combustion air at the plant, which contributes to reducing CO2 emissions by 70,000 tons per year.
- *1 This program subsidizes business operators to cover part of their expenses for implementing the following type of projects to rationalize energy use and level electricity demand: projects to provide external private parties with financial support that covers some of their expenses for introducing equipment and facilities that help save much energy and contribute to reducing peak power consumption.
- *2 Under this type of agreement, Daigas Energy brings its energy facilities onto customers’ premises and allows them to use the facilities for service fees, saving them from buying the facilities and helping them achieve zero initial costs.
The development and spread of high-efficiency gas-powered air conditioning systems
Gas-powered air conditioning systems can help in electricity and energy saving. They include natural-refrigerant-based absorption chillers used for central air conditioning and gas heat pump (GHP) air conditioners used for individual spaces, such as offices.
Natural-refrigerant-based absorption chillers are air conditioning systems fueled by city gas. They provide cool water for cooling and hot water for heating and use water as a refrigerant, instead of CFCs. The Daigas Group has designated models of natural-refrigerant-based absorption chillers that are especially effective in reducing environmental impacts as “green models” and actively recommends them to customers.
Equipped with a gas engine driving a compressor, GHP air conditioners collect heat from the outdoor air and send it into indoor spaces for heating while collecting heat from the indoor air and discharging it outdoors for cooling.
Tokyo Gas Co., Ltd., Toho Gas Co., Ltd. and Osaka Gas developed GHP XAIR III, the latest model of a super-efficient, energy- and power-saving GHP air conditioner, in collaboration with Aisin Seiki Co., Ltd., Panasonic Corporation, and Yanmar Energy System Co., Ltd. This product boasts even better energy-saving performance and functionality, as well as being easier to install, than those of the previous model. It was launched for sale in April 2020. For its great energy-saving performance and functionality, GHP XAIR III received the Commissioner of the Agency for Natural Resources and Energy Prize in the 2020 Energy Conservation Grand Prize and the 2021 Japan Gas Association Technology Prize.
In addition, Smart Multi, a hybrid air conditioning system that uses both a GHP and an electric heat pump (EHP) controlled remotely for optimal operation, has been in the market since July 2016. This product is now available in a lineup of six models from four manufacturers. For its great energy-saving performance, Smart Multi received the 2018 Energy Conservation Grand Prize in the product and business model category.
For more details, click here for the press release “Three Gas Companies Develop GHP XAIR Ⅲ, Latest Models of Gas-powered Air Conditioning System that Saves Energy and Power —New Type of Gas Engine-driven Heat Pump (GHP) with Further Improved Performance and Functions.”
Development of energy-saving gas boilers
Simplified once-through boilers are characteristically small and lightweight and, not requiring any qualifications to operate, they are used by a wide range of customers, including dry-cleaning shops and food/textile/chemical plants requiring large volumes of steam.
Osaka Gas is working with a variety of manufacturers and gas companies to develop, propose, and sell new simplified once-through steam / heating medium boilers.
The products achieve combustion with a lower load than earlier models and recover about 15% more heat from the exhaust gas released during combustion, resulting in a higher operation efficiency of the boiler. In addition, the products also feature lower power consumption of the air blower, helping conserve energy.
In FY2018, Osaka Gas developed the SQ-1200ZL, a gas-fired, once-through small-size steam boiler, Japan's first such device compatible with low-pressure gas pipes, which uses venturi suction technology.* In the same year, the Company also undertook joint development of the best-in-class-performance boiler with an evaporation capacity of 1,000 kg/h. By catering to a broader range of customers through the development of these products, we are contributing to energy saving and environmental conservation.
* The employment of a venturi suction technology enabled the development of a product with specifications that are compatible with low-pressure gas pipes.
The technology envisages gas fuel being taken in and supplied to a burner, using negative pressure which is generated when air flows into a venturi installed at the inlet of a blower. The venturi is designed to create a low-pressure area inside the device by narrowing the cross section where the liquid flows, a mechanism that can lead to a higher liquid flow speed. Conventional boilers required medium-pressure gas due to a mechanism in which gas fuel is injected into a high-pressure area at the outlet of the blower for mixing gas and air. The venturi suction technology has specifications that are suitable for low-pressure gas even in large-capacity boilers. Because it does not require medium-pressure gas pipes, the product can be used by a broader range of customers.
Please refer to a press release for further information on joint development of Japan's first low-pressure gas-compatible boiler with an evaporation capacity of 1,200 kg / h that adopts venturi suction technology. (Japanese version only)
Please refer to a press release for further information on joint development of the best-in-class-performance boiler with an evaporation capacity of 1,000 kg / h that achieves an evaporation rate of 98% and a turndown ratio of 1:5. (Japanese version only)
The development of a high-efficiency industrial “regenerative burner” system
High-efficiency industrial “regenerative burner” system
The Daigas Group has developed 1,600 models of industrial burners and heat exchangers, along with high-performance control systems, and has contributed to reductions in CO2 emissions at customers sites in a range of industries and business categories through the pursuit of more energy-efficient burners.
There has been great interest particularly in our regenerative burner system, which is a combustion heating system that allows extremely high-efficiency recovery of exhaust heat in an industrial furnace. A regenerative burner system generally ignites a pair of burners that are integrated with heat reservoirs alternately at intervals of several tens of seconds. While one burner is burning, the exhaust gas passes through and heats the other burner’s heat reservoir to recover the energy of the exhaust gas. Then, when the other burner burns, the air for combustion in turn passes through the preheated heat reservoir to recover the exhaust gas energy, achieving a 35–50% energy savings.
We have so far a wide lineup of these types of burners in terms of form and capacity for use in casting, rolling and heat treatment.
We are also developing a natural gas mono fuel combustion burner for glass-melting furnaces that produce glass for bottles, automotive use, and building materials for customer sites, as well as high-efficiency burners for various uses, aiming to provide customers with ideal solutions to reducing CO2.
Reducing CO2 emissions in logistics
LNG tanker truck fueled by CNG
In Japan, the number of trucks used by the group is less than 20% of the overall number of our automotive vehicles, but distribution accounts for approximately 35% of CO2 emissions. Large trucks generate particularly high emissions, so the introduction of natural gas-powered large trucks can have a significant effect on reducing CO2 emissions. According to a road verification report by the Organization for the Promotion of Low Emission Vehicles (LEVO), large natural gas trucks have 12.9% lower CO2 emissions than large diesel trucks. Osaka Gas is working to expand the use of large natural-gas trucks for long-distance transport between cities, and small and medium-sized natural-gas trucks for transport within municipalities.
We have also started transporting LNG using LNG tanker trucks fueled by compressed natural gas (CNG). These LNG tanker trucks can help reduce CO2 emissions by about 7%, compared with diesel-fueled tanker trucks.
Japan’s first commercial LNG station was opened in Osaka City in June 2018, allowing the start of transport using large LNG trucks. LNG features high-efficiency fuel storage, which lets trucks run for over 1,000 kilometers without refueling for further reductions in CO2 emissions.
Working together with customers to save energy
The Daigas Group is united in supporting customers using gas for industrial and business purposes in their energy saving activities and promoting energy conservation to contribute to global environmental protection.
Experts from Osaka Gas take heat and other measurements at the facilities of customers, such as factories, hospitals, and other commercial establishments, and use the results to recommend appropriate ways customers can save energy.
Our energy-saving activities with our customers help deepen the relationship of mutual trust. We are also holding in-house training and educational sessions on energy saving on a regular basis based on the results of energy-saving efforts. These sessions are designed to accumulate energy-conservation technologies and promote the shared use of these technologies while developing human resources with expertise in the field of energy-saving technologies.
Part of efforts to encourage local companies in the Kansai region to introduce natural gas equipment, Osaka Gas is promoting the “Try! Carbon offset” project, which envisages using the central government's J-Credit system to reduce the amount of CO2 emitted at various events held in Kansai region to effectively zero.
Under the government’s J-Credit system, CO2 emission reductions achieved by customer companies when they introduce high-efficiency gas equipment, such as city-gas-fueled boilers and gas cogeneration systems, are converted into credits, which are acquired by us. We then use the credits as carbon offsets for local sports events, local-government-organized events, and so on, which means that the CO2 emissions from such events are offset to the zero level. As a result of this initiative, we are promoting so-called “local consumption,” whereby credits earned by local companies are used for local events.
In FY2021, CO2 emissions dropped by 502 tons, equal to the sum of CO2 emitted from about 126 ordinary households*
* Calculation of CO2 emission from households
This figure has been calculated on the supposition that each household emits about 4 t-CO2, in reference to the result of Osaka Gas’s tentative calculation based on data available on the website of the Japan Center for Climate Change Actions.
Heat measurement at customer's site for saving-energy.
“Try! Carbon Offset”
■ List of Major Events in which Carbon Emissions are Offset in FY2021
|Event||Host||CO2 emissions (t-CO2)*1|
|Ikoma Environment Festival||Ikoma City||1|
|Cerezo Osaka home games||Cerezo Osaka Co., Ltd.||501|
Provision of various ICT services
The Daigas Group has worked on a large number of energy-saving measures on the software front on top of proposing optimal and highly energy-efficient devices. Various information and communication technology (ICT) services the Group has developed are being used by many customers.
For example, the “Eneflex” energy-saving service is one such ICT service, through which customers can remotely control the operation of a gas engine heat pump (GHP) while being notified of the operational status of the pump and its energy consumption situation via the Internet or e-mail. “Eneflex” is designed to support the ongoing energy-saving efforts of customers by making energy use status available in a visible form.
In addition, we have also developed a service called “Eneflex Premium,” which offers a menu of functions in addition to the previous “Eneflex” functions, including a patrol function for automatic energy-saving in GHPs, an energy-saving control function, a thinning function, and a charge allocation function. “Eneflex Premium” is designed to enable busy customers to engage in energy-saving activities easily.
■ ICT Services Offered in Response to Various Customer Demands.
In fiscal 2016, we launched “ekul,” a real-time data measurement service that uses wireless and batteries and can be installed simply and inexpensively even in small buildings.
In April 2019, we introduced a new service plan for the simplified data measurement system, “ekul lite.” This plan utilizes the IoT network Sigfox,* provided by Kyocera Communication Systems Co., Ltd., which features low cost, low power consumption, and long-distance transmission. In recent years, people have started to look with keen interest at utilizing the Internet of Things (IoT) to counteract various social issues including the aging population and declining birthrate, labor shortages, and environmental/energy issues. To respond to the request of many customers for a simpler and less costly version through the use of IoT, the new service plan was launched for customers wishing to start with the measurement of a few items.
Going forward, we will work hard to improve convenience and lower costs for customers.
Sigfox, from Sigfox S.A. (France), is operated by Kyocera Communication Systems Co., Ltd. (KCCS) on an exclusive basis in Japan. Sigfox has been rolled out mainly in Europe and the United States, covering 60 countries in total, as a leading low-power wide-area (LPWA)* network. In Japan, the construction of Sigfox infrastructure and provision of the network service are carried out by KCCS.
* Low-power wide-area (LPWA): A general term for wireless communications technology that enables transmission over distances of kilometers with low power consumption. Radio waves can be sent to a base station, which collects data, with low consumption of the device’s battery power. LPWA has been receiving attention as a technology particularly useful for the Internet of Things (IoT).
Mid- and Downstream Business Development in Southeast Asia
The group began surveying markets in the region around 2010 to determine the potential for mid- and downstream business development. The focus of the survey was Southeast Asia, because of the promise it holds as a market for economic growth with a high percentage of manufacturing industries, besides having many Japanese companies doing business there.
Gas business in Singapore
Members of CITY-OG
Osaka Gas and Singapore’s City Gas Pte Ltd. (City Gas) agreed to launch joint sales of natural gas in Singapore. Osaka Gas concluded a contract to buy an equity stake in City-OG Gas Energy Services Pte. Ltd. (City-OG), a new company set up by City Gas to sell natural gas for industrial use. Under the agreement, Osaka Gas began selling gas in Singapore in August 2013, marking the company’s first overseas gas sales.
A total of ten staff—five from Osaka Gas Singapore Pte. Ltd. (OGS) and five from City Gas—belong to City-OG as of April 2021. OGS members are strong in proposal-oriented marketing, especially in conversion of boiler fuels, while City Gas members have prowess in approaching potential local customers and in local business procedures. Since the business in Singapore started in August 2013, 39 contracts have been concluded with local customers. A total of more than 50 industrial customers receive gas from us as of April 2021.
In FY2020, Osaka Gas invested, through OGS and together with the Japan Bank for International Cooperation, in AGP International Holdings Pte. Ltd. (hereinafter, “AGP IH”) and signed a strategic collaboration agreement with AGP IH on a natural gas value chain. The AGP Group is a corporate group with a history of more than 100 years in the Philippines, mainly engaged in the construction and engineering businesses. The group has reliable technological expertise in the LNG business and a high level of marketing skills. It is actively exploring demand and expanding its LNG business by participating in floating LNG terminal projects and city gas projects mainly in Southeast Asia and India.
This investment and strategic collaboration agreement will enable both parties to mutually utilize the AGP Group’s ability to explore projects and engineering skills in the LNG business and the knowledge and know-how about LNG and pipelines that Osaka Gas has long developed in Japan. The two parties will thus strive to establish a natural gas value chain in emerging countries in the LNG business, including Southeast Asian countries.
For more details, click here for the press release “Investments and Conclusion of Collaboration Agreement with AGP International Holdings Pte. Ltd. as Development of Natural Gas Infrastructure Proceeds.”
Energy service business in Thailand
Members of OGT and OGPS
Osaka Gas has stepped up its business in Thailand with a focus on the energy service (ES)*1 business, utilizing Osaka Gas's energy service solution know-how, which is based on its engineering prowess regarding the use of natural gas in the Thai industrial market. Specifically, the new company undertakes overall utility-related businesses, including the installation of boilers and industrial furnaces, CNG supply, water and biotechnology.
In October 2013, Osaka Gas (Thailand) Co., Ltd. (OGT) was founded in Thailand. With a total of 28 staff, comprising 14 seconded from Osaka Gas and 14 local staff, OGT has received nine orders for CNG supply, two orders for the ES and over 70 orders for facility installation and consulting services since its start of operation in October 2013 (as of April 2021).
In July 2014, Osaka Gas and Nippon Steel Engineering Co., Ltd. (hereinafter, “NSE”; company name at that time: Nippon Steel & Sumikin Engineering Co., Ltd.) agreed to form a business partnership for on-site business*2 using cogeneration systems built in Thailand. Under the agreement, the two companies established NS-OG Energy Solutions (Thailand) Ltd. (hereinafter, “NSET”).
In 2018, an on-site energy supply system for the Honda Group’s Thai Honda Manufacturing Co., Ltd., which manufactures motorcycles and power products, was completed and started supplying energy. This is the fourth such on-site energy supply project to be implemented in Thailand.
In addition, together with NSE and Toray Textiles Public Company Limited (Thailand) (hereinafter, “TTT”; company name at that time: Luckytex (Thailand) Public Company Limited), Osaka Gas won the Chairman’s Award in the industrial category in the Cogeneration Award*3 2018 organized by the Advanced Cogeneration and Energy Utilization Center Japan, for the project “Introduction of Cogeneration through On-site Energy Supply and Highly efficient, Safe Operation: Case of Introduction to Luckytex (Thailand) Public Company Limited Mill No.2.
In November 2015, we made joint investment with a subsidiary of Thailand-based PTT Public Company Limited in establishing OGP Energy Solutions Co., Ltd., which provides the ES for industrial customers in Thailand. OGP Energy Solutions received over 50 orders for the ES and facility installation (as of April 2021).
- *1 Energy service (ES) business This service enables customers to introduce natural gas and other facilities, without any initial investment, simply by paying fees that correspond to the amount of energy use. The new company is equipped with natural gas-fired facilities, including boilers and combustion furnaces, to supply steam and other forms of energy to customers to meet their energy-saving needs. As an one-stop service for the management of energy use and facility maintenance, the company has promoted energy-saving as well as stable energy supply.
- *2 On-site business Service in which the Daigas Group sets up a cogeneration system on customers' sites or near their sites, and supplies electricity and heat there. The cogeneration system is operated and maintained by staff posted at the facility.
- *3 Cogeneration Award 2018 The Cogeneration Award was founded in 2012 by the Advanced Cogeneration and Energy Utilization Center Japan. It aims to raise social awareness of the usefulness of cogeneration and facilitate the spread of more excellent cogeneration technologies by commending excellent cogeneration systems in terms of innovativeness, the status as a pioneer, new technology, energy conservation and other factors. The 2018 award marked its seventh presentation. The award has Consumer Use, Industrial Use, and Technological Development categories. The Chairman’s Award, the Award for Excellence and Honorable Mention are presented in each category.
Efficiency improvement project at cogeneration facility in Thailand selected for financing program based on joint crediting mechanism
NS-OG Energy Solutions (Thailand) Ltd. (hereinafter, “NSET”), founded by Osaka Gas and Nippon Steel Engineering Co., Ltd. (hereinafter, “NSE”), has been selected for the FY2019 Financing Program for Joint Crediting Mechanism*1 Model Projects for its cogeneration facility efficiency improvement project, which Osaka Gas implement with NSE.
This project involves installing an extra exhaust gas heat exchanger for the on-site energy supply project at Mill No. 2 of Toray Textiles (Thailand) Public Company Limited,*2 which has been implemented by NSET since December 2016, and effectively utilizing the unused waste heat of exhaust gas to achieve higher efficiency at the cogeneration facility.
The existing cogeneration facility operates at a total energy efficiency of 91% and is thus already near the maximum level, but this additional equipment will raise the total energy efficiency to 92% and enable a further annual CO2 reduction of 359 tons.
This is the second time for NSET to be selected by the program after the adoption of a cogeneration facility in an on-site energy supply project for Thai Honda Manufacturing Co., Ltd., which is a group company of the Honda Group and manufactures motorcycles in Thailand.
NSET operates for cogeneration facilities in Thailand and implements detailed management according to changes in the situation by operating cogeneration facilities with its on-site staff at customer plants. This has enabled reduced energy consumption and CO2 emissions via improvements to operation methods and equipment. Program selection was decided upon thanks to the engineering ability and operation management technology of NSET being well-received.
We will continue to contribute to sustainable development in Thailand by assisting in focusing resources on core businesses and supporting the efforts of our customers for achieving a low-carbon society, via the position of optimal energy solutions based on the status of operation, both in the planning stage and after operation has started.
- *1 The joint crediting mechanism (JCM) is a system for providing excellent low-carbon technologies, products, systems, services, and infrastructure from Japan to a developing country in order to contribute to sustainable development that reduces greenhouse gas emissions in that developing country and enable both countries to reap the benefits. The JCM enables Japan’s contribution to greenhouse gas emissions reduction to be quantitatively evaluated and that data to be utilized to achieve the emission reduction target of Japan. Commissioned by the Ministry of the Environment, the Global Environment Center Foundation (GEC) has been put in charge of serving as an implementing organization for the program and accepting proposals for projects from private Japanese companies.
- *2 Established in July 2019 through a business merger between Luckytex (Thailand) Public Company Limited and Thai Toray Textile Mills Public Company Limited
In addition, Osaka Gas Singapore Pte. Ltd. and Energy Pro Corporation Ltd., a solar power generation company in Thailand, agreed on establishing a joint venture, OE Solar Co., Ltd., in July 2019 to launch a solar power supply business in Thailand.
2020 TOPIC) Commencement of an on-site utility services business for Spiber Inc. in Thailand
NS-OG Energy Solutions (Thailand) Ltd. (NSET),*1 a joint subsidiary of Nippon Steel Engineering Co., Ltd. (NSE) and Osaka Gas, began to provide on-site utility services for a structural protein plant constructed in Rayong Province, Thailand, by Spiber Inc.*2 An opening ceremony was held jointly by Spiber and NSET to celebrate the commencement of commercial production at the plant.
In this project, NSET takes on the operation and maintenance of utility facilities built at the plant by Spiber to supply Spiber with power, steam, chilled water and other utilities necessary to run the plant. By supplying utilities efficiently and stably, NSET will play a part in the stable operation of the plant. NSET will also contribute to Spiber’s initiatives to realize a sustainable society by optimizing the energy supply system through various measures, including installing cogeneration systems at the time of plant expansion in the future.
- *1 NS-OG Energy Solutions (Thailand) Ltd. was founded as a joint subsidiary in Thailand by Nippon Steel Engineering Co., Ltd. (Nippon Steel & Sumikin Engineering Co., Ltd. at that time) in July 2014. Osaka Gas invested through Osaka Gas Singapore Pte. Ltd., its wholly owned subsidiary.
- *2 Spiber Inc. is a biotech startup based in Tsuruoka City, Yamagata Prefecture, Japan. It has developed Brewed Protein™, its proprietary structured protein material. Brewed Protein™ is produced mainly with plant-derived sugars through microbial fermentation. Various functions can be added to the product according to the application. Accordingly, it has the potential to play a major role in reducing reliance on oil and animals in various industries, including the apparel and transportation equipment industries. The product is gaining growing attention as a next-generation key material that will contribute to sustainable social development. In 2018, Spiber established Spiber (Thailand) Ltd., a local subsidiary in charge of constructing a plant for the mass production (fermentation and purification) of Brewed Protein™ in Thailand, preparing to put the plant into operation, and running it after it becomes operational.
Mass production plant for the structural protein, established by Spiber
Activities in Indonesia and the Philippines
Osaka Gas Singapore Pte. Ltd. established a representative office in Jakarta, Indonesia in October 2016, and in Manila, the Philippines in March 2017.
The demand for energy is expected to grow in the near future as the Indonesian economy expands. Osaka Gas had been studying the possibility of operating an energy business in the country by utilizing our expertise in providing energy solutions to meet consumer needs for saving energy. PT Osaka Gas Indonesia (“OGIDN”) was established in August 2018, followed by a joint marketing agreement between OGIDN and PT Pertagas Niaga, the gas trading subsidiary of PT Pertamina (Persero), the state-owned oil and natural gas corporation. A business license was obtained in October 2018, and under the agreement Osaka Gas Indonesia began jointly marketing natural gas with Pertagas Niaga. This development marks the third country in Southeast Asia, following Singapore and Thailand, in which we are involved in energy-related business.
Through this project, we will promote a conversion to natural gas from heavy oil and the efficient use of this clean energy, and will contribute to energy-saving efforts and the reduction of environmental impact in Indonesia.
Osaka Gas Indonesia will also develop a financing plan to aid in creating an energy service business that supports the introduction of equipment and facilities, aiming for business development throughout Indonesia in the future. At present, Osaka Gas Indonesia is staffed with 17 people—four employees dispatched from Japan and thirteen local hires (as of April 2021). Meanwhile, the Jakarta representative office is currently staffed by six employees—two employees dispatched from Osaka Gas in Japan and four local hires (as of April 2021). Indonesia has a population of over 250 million. Since the demand for energy is expected to increase as the economy expands, we are now conducting a full-scale survey of energy infrastructure development.
The Manila Representative Office has three staff members—two from Osaka Gas and one local hire (as of April 2021). In the Philippines an increase in demand is expected and there is a plan to introduce LNG in preparation for the depletion of domestic natural gas resources, so we are aiming to participate in energy infrastructure development projects that make the most of our experience and knowledge, especially in LNG-related ventures.
Activities in Vietnam
External appearance of the gas supply facility at the Phu My 3 Specialized Industrial Park
In October 2019, Osaka Gas Singapore Pte. Ltd., a wholly owned subsidiary of Osaka Gas, Sojitz Corporation, and Sojitz Vietnam formed Sojitz Osaka Gas Energy Company Ltd. (hereinafter, "SOGEC"), a joint venture, with the aim of supplying natural gas in Vietnam.
SOGEC works on natural gas supply for the Phu My 3 Specialized Industrial Park in the southern Vietnamese province of Ba Ria-Vung Tau, as well as supplying compressed natural gas via trucking for industrial customers in the country.
The project marks the Daigas Group’s business expansion in a fourth Southeast Asian country, after Singapore, Thailand, and Indonesia. This also marks the Group’s engagement in natural gas supply in a third overseas country, following Singapore and Thailand.
Vietnam has seen growing energy demand as a result of its economic growth. There are multiple industrial zones in the southern region of Vietnam, where this project has been implemented, in a concentrated area of heavy and chemical industries, with the further expectation that the region will also soon be home to new expansion for several manufacturing companies as well.
Through this project, SOGEC not only promotes the efficient use of cleaner natural gas and actively proposes natural gas as an alternative to coal, heavy oil and LPG but also contributes to energy savings in Vietnam as well as decreasing the environmental impact there.
Taking advantage of the unique knowledge and experience both of the Sojitz Group, with its impressive track record for IPP and industrial park operations in Vietnam, and the Daigas Group, as an experienced natural gas supplier, all the parties involved aim to promote this project to achieve a sales amount of 15 billion yen by FY2031.
There are also future plans under discussion to conduct an energy service business, helping introduce new infrastructure using various financial strategies.
2020 TOPIC) Fuel switching business at food plants in Vietnam
—Switching from coal to natural gas to reduce CO2 by approximately 76,300 tons over 10 years—
On March 4, 2021, Sojitz Osaka Gas Energy Company Ltd. (SOGEC)*1 concluded an agreement with Acecook Vietnam Joint Stock Company (ACV), a subsidiary of Acecook Co., Ltd. (ACJ), to provide natural gas to ACV’s food plants.
SOGEC focuses on fuel switching from coal to natural gas, and this project is the first for SOGEC to supply natural gas to an individual business.*2 This project is subsidized under the Japanese government’s joint crediting mechanism (JCM)*3 as a JCM model project by the Ministry of the Environment of Japan (MOEJ),*4 and it is being undertaken through cooperation between the governments of Vietnam and Japan.
This project has been launched after a feasibility study*5 conducted jointly by the municipalities of Osaka and Ho Chi Minh with the participation of ACV and SOGEC to assess the CO2 emissions reduction effects of the project at food plants. The project aims to replace coal-fired steam boilers at the two ACV plants with highly efficient natural gas-fired steam boilers to which SOGEC will provide natural gas in order to improve the work environment and reduce CO2 emissions at the plants.
This project is expected to reduce CO2 emissions by approximately 76,300 tons over a decade. Under the JCM scheme, over half of this CO2 reduction will be delivered as JCM carbon credits to the Japanese government, which will help Japan achieve its CO2 emissions reduction target.
- *1 Equity ownership of Sojitz Osaka Gas Energy Company Ltd.: 51% for the Sojitz Group, 49% for Osaka Gas Singapore Pte. Ltd.
- *2 In April 2020, SOGEC began supplying natural gas to Phu My 3 Specialized Industrial Park in Bà Rịa-Vũng Tàu Province in Southern Vietnam.
- *3 The joint crediting mechanism (JCM) is a system for providing excellent low-carbon technologies, products, systems, services, and infrastructure from Japan to a developing country in order to contribute to the country’s sustainable development, including GHG emissions reduction, and enable both countries to share the benefits. The JCM enables Japan’s contribution to GHG emissions reduction to be quantitatively evaluated and that data to be utilized to achieve the emission reduction target of Japan.
- *4 Projects to be subsidized as JCM model projects by the Ministry of the Environment of Japan (MOEJ) should utilize advanced low-carbon and decarbonization technologies to lower GHG emissions in developing countries through measurable, reportable, and verifiable (MRV) actions. In addition to reducing GHG emissions in developing countries, the JCM projects aim to help Japan and its partner countries achieve their GHG emissions reduction targets. MOEJ’s Financing Programme for JCM Model Projects funds up to half of the cost of initial investment in advanced low-carbon and decarbonization technologies. The Global Environment Center Foundation (GEC) has been commissioned by MOEJ to function as a secretariat to manage JCM-related subsidy programs, which are open to private enterprises in Japan. ACJ, ACV and SOGEC received a notice of MOEJ’s decision to fund this project under the FY2020 Financing Programme for JCM Model Projects on September 28, 2020.
- *5 Under MOEJ’s FY2020 program “City-to-city Collaboration for Low-Carbon Society,” the municipalities of Osaka and Ho Chi Minh were commissioned by MOEJ to conduct this feasibility study, in which ACV and SOGEC participated. This MOEJ program aims to effectively and efficiently support joint initiatives to build a low-carbon or decarbonized society implemented by Japanese municipalities that have experience and expertise in this field and their overseas counterparts.
■ Locations and External Appearances of the Plants
Efforts in Renewable Energy Business
Solar power generation business
Efficient use of biogas
A main component of biogas is methane, as in the case of natural gas. Biogas is a renewable energy source and is seen as an effective tool to combat global warming. Osaka Gas began purchasing biogas in September 2010 on behalf of customers who are to receive the gas from us through our pipelines, in line with our “Biogas Procurement Guidelines” — a set of conditions we apply when we buy biogas for customers.
It is a pilot project Osaka Gas launched jointly with Kobe City and Kobelco Eco-Solutions Co., Ltd., in which biogas produced at the processing plant in Kobe City is provided as our city gas to customers via gas pipelines operated by the Company. The amount of biogas we accept into our pipelines — whose brand name is “Kobe Biogas” — is about 800,000 m³ per year (equal to the gas consumed annually by about 2,000 households). Furthermore, Osaka Gas began operating a digestion gas-based power generation project at the Tamatsu sewage treatment plant in Kobe City, and a similar project at the Iho water purification center in Takasago City, both in April 2018.
Meanwhile, Daigas Energy Co., Ltd., a Daigas Group company, began operating the “Power Generation Business Using Digester Gas at Sewage Plants in Osaka City” in April 2017 in partnership with the Osaka City municipality, Tsukishima Kikai Co., Ltd., and Tsukishima Technology Maintenance Service Co., Ltd. Having combined power generation capacity of about 4,090 kW, the four power plants will generate electricity of about 25.8 million kWh annually, which is equal to the sum used at about 7,100 general household in a year. The project is one of the largest of its kind to be launched in Japan under the feed-in-tariff (FIT) power purchasing system, introduced in line with the Act on Special Measures Concerning the Procurement of Electricity from Renewable Energy Sources by Electricity Utilities.
Furthermore, the Daigas Group has also been working on effective biogas utilization at private-company plants: a total of approximately 6,000 kW of power is generated at eight plants, and steam generated from biogas is supplied to one plant.
■ Trial Project for Supplying Biogas via Gas Pipes
Energy Bank Japan Co., Ltd.
Power generation project based on renewable energy sources launched using unique financing technology
Energy Bank Japan Co., Ltd., a Daigas Group company, has undertaken projects aimed at promoting power facilities based on renewable energy sources across Japan, including solar power facilities, using its unique financing technology called “EcoWave,” known to have been effective in diffusing energy-saving facilities developed by Osaka Gas.
A financing scheme under EcoWave enables customers to install power facilities run using renewable energy sources without any initial investment. The scheme focuses on fund raising exclusively earmarked for developing renewable energy sources. Under the scheme, highly professional services backed by technological expertise are provided to local communities to support their efforts to develop renewable energy sources with the aim of promoting local production and local consumption.
As of the end of March 2021, power generation projects using the EcoWave financing scheme totaled 46 cases with a combined power generation capacity of 54,645 kW, including projects that have yet to start and projects still under construction.
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