Actions for Climate Change: Working to Reduce CO2 Emissions in Business Activities

Aspects Determined as Materiality
  • Energy


  • Emissions


Principle and Outline

In line with the worldwide trend toward action against climate change, the Daigas Group is striving to reduce GHG emissions from its business activities, including CO2 and methane (CH4), to help realize a low-carbon or decarbonized society. Specifically, we devote positive efforts to reduce CO2 emissions from liquefied natural gas (LNG) transportation, city gas production, and power generation. We also implement various energy-saving measures at offices, scale them up Group-wide, and verify their effects in our own buildings.

We announced the Daigas Group Carbon Neutral Vision in January 2021 and the Daigas Group 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.

Reduction of 3.34 million tons of CO2 emissions in Group business activities

The Daigas Group has been introducing cryogenic power generation facilities for city gas processing, high-efficiency thermal power generation, and renewable energy sources (solar, wind, biomass, etc.). These business activities have contributed to a reduction in emissions of approximately 3.34 million tons in FY2022.

GHG Emissions at Daigas Group

Third-party verification completed Osaka Gas underwent a third-party review by Bureau Veritas Japan Co., Ltd.

Initiatives to reduce CO2 emissions from energy consumption and methane (CH4) emission

In the Daigas Group, we work to reduce CO2 emissions from energy consumption and methane (CH4), the main component of natural gas in the gas business and in the thermal supply and power generation businesses, as well as CO2 emissions from energy consumption at affiliates.*

  • * Affiliated Companies
    60 consolidated subsidiaries other than those that are tenants, on which data is hard to obtain and which have a minor environmental impact, or overseas subsidiaries from among the 150 consolidated subsidiaries. An overseas subsidiary (1 company) has been added to the companies for which energy consumption and greenhouse gas (GHG) are calculated.
    The number of companies subject to calculation may vary depending on the year due to corporate mergers and the like.

(as of March 31, 2022)

Group companies No. of companies Company names
Energy Resources & International Business Unit 1 Michigan Power Limited Partnership
LNG Power & Engineering Business Unit 16 Nakayama Joint Power Generation Co., Ltd., Nakayama Nagoya Joint Power Generation Co., Ltd., Hirogawa Myojinyama Wind Farm Co., Hayama Wind Farm, Yura Wind Farm Development, Hizen Wind Farm, Hirao Wind Farm, Inami Wind Power Plant, Shiribetsu Wind Farm, Senboku Natural Gas Power Generation, Daigas Oita Mirai Solar, Osaka Gas Liquid Co., Ltd., Cold Air Products Co. Ltd., Cryo-Air Co. Ltd., Kinki Carbonic Co., Ltd., Gasnet Co. Ltd.
Under the umbrella of the Network Company* 2 Kinpai Co., Ltd., Osaka Gas Renotech Co., Ltd.
Under the umbrella of the Energy Solution Business Unit 19 Living Maintenance Service Hokuto Co., Ltd., Living Maintenance Service Osaka Co., Ltd., Osaka Gas Cooking School Co., Ltd., Create Kansai Co., Ltd., Osaka Gas Customer Relations Co., Ltd., Kansai Business Information Inc., Osaka Gas Housing & Equipment Co., Ltd., Osaka Gas Security Service Co., Ltd., Osaka Gas Finance Co., Ltd., GlobalBase Corporation, RenoBase Design Corporation, Ashiyahama Energy Service Co., Ltd., Rokko Island Energy Service Co., Ltd., Enetec Kyoto Co., Ltd., Enetec Osaka Co., Ltd., Nabari Kintetsu Gas Co., Ltd., Toyooka Energy Co., Ltd., Shingu Gas Co., Ltd., Biwako Blue Energy Co., Ltd.
Group Headquarters 5 OG Sports Co., Ltd., Osaka Gas Autoservice Co., Ltd., Osaka Gas Business Create Co., Ltd., Active Life Inc., KRI Inc.
Core energy business companies 3 Osaka Gas Marketing Co., Ltd., Daigas Energy Co., Ltd., Daigas Gas and Power Solution Co., Ltd.
Osaka Gas Urban Development Group 4 Osaka Gas Urban Development Co., Ltd., Osaka Gas Facilities Corp., Kyoto Research Park Co., Ltd., Prime Estate Co., Ltd.
OGIS Research Institute Group 7 OGIS-RI Co., Ltd., Agnie Consulting Corp., Sakura Information Systems Co., Ltd., SIS Techno-Service Co., Ltd., JOE Corp., Ltd., Ube Information Systems Inc., System Answer Inc.
Osaka Gas Chemicals Group 4 Osaka Gas Chemicals Co., Ltd., Minabe Chemical Industries Ltd., Mizusawa Industrial Chemicals, Ltd., Mizuka Unyu Co., Ltd.
Total 61
  • * Currently Osaka Gas Network Co., Ltd.

■ GHG Emissions* (Unit:1,000 t-CO2e)

FY 2018 2019 2020 2021 2022
Consolidated companies (Osaka Gas and its affiliates) 58 57 59 5 62
Total 5,159 5,350 4,963 5,513 4,860
Osaka Gas 259 209 207 162 174
LNG terminal 84 89 97 105 112
Power plant 124 73 63 18 22
District heating / cooling 10 9 9 9 9
Other 41 38 38 30 31
Affiliates 4,900 5,140 4,756 5,351 4,687
Power plant 4,581 4,805 4,431 5,034 4,357
District heating / cooling 104 97 91 83 83
Other 215 238 234 234 247
  • * GHG emissions
    [CO2 emissions] CO2 emissions calculated using the average emission factor for thermal power source are subject to management in the Daigas Group so that the benefit of reducing the consumption of purchased electricity can be properly evaluated. The results were calculated based on 0.65 t-CO2/1,000 kWh: Plan for Global Warming Countermeasures (Cabinet decision in October 2021). [CH4 emissions] The global warming coefficient is 25 (refer to “UNFCCC reporting guidelines on annual inventories” (in 2012)). Greenhouse gas emissions are defined as the aggregate of CO2 emissions and CO2 equivalent of CH4 emissions.

■ (Reference) GHG Emissions for Comparison* (1,000 t-CO2e)

FY 2018 2019 2020 2021 2022
Total 5,073 5,248 4,853 5,408 4,736
Osaka Gas 239 181 170 125 134
LNG terminal 72 68 68 75 83
Power plant 124 72 62 18 18
District heating / cooling 9 9 8 8 8
Other 34 31 31 25 24
Affiliates 4,834 5,067 4,683 5,282 4,603
Power plant 4,579 4,803 4,428 5,031 4,352
District heating / cooling 94 86 78 73 72
Other 162 178 176 178 178
  • * GHG emissions for comparison
    The results of the CO2emissions were calculated by multiplying the consumption of each electricity utility by the emissions coefficient of such business utility based on the contract status with multiple electricity utilities.

CO2 emissions from the city gas business at Daigas Group
*Not subject to third-party verification.

CO2 emissions in the Daigas Group’s city gas business for FY2022 stood at 143,000 tons, with CO2 emissions per cubic meter of gas production (emissions intensity) of 19.7 g. Compared to 1990, the Kyoto Protocol’s benchmark year, total CO2 emissions were down by 46%, and emissions on a per-unit basis fell by 66%.

Efforts in recent years, such as the use of cogeneration systems and cryogenic power generation at city gas processing plants, energy efficient operations, and efforts to conserve energy in office buildings have succeeded in keeping both emissions and intensity at low levels. In FY2022, CO2 emissions and intensity increased from the previous fiscal year due to the impact of an increase in the electricity purchased from outside at processing facilities.

In 1979, the Daigas Group became the first company in the world to begin operating a cryogenic power generation facility, and in FY2022 it produced approximately 33 million kWh cryogenically.

We will work toward further CO2 emission reductions by aggressively using electricity produced by unused energy such as LNG cryogenics and the gas pressure of gasification, as well as by promoting energy savings in office buildings.

■ CO2 Emissions from the City Gas Business of the Daigas Group (LNG terminals and business locations)

CO2 Emissions from the City Gas Business of the Daigas Group (LNG terminals and business locations)

Methane emissions from the Daigas Group’s city gas business

In the city gas business of the Daigas Group, methane (CH4) gas is emitted during measurement of gas quality and gas fitting work. We therefore strive to reduce emissions by introducing a system that can recollect gas without it being released into the air after the measurement, by employing a no-blow gas shutting-off method and using an Eco Purge vehicle.
In FY2022, Osaka Gas emitted 57 tons of methane, achieving a continuous reduction.

■ Methane emissions from the Daigas Group’s city gas business

FY 2018 2019 2020 2021 2022
Methane emission (t-CH4) 77 88 106 58 57

CO2 emissions from affiliates

CO2 emissions from affiliate companies amounted to about 4.687 million tons in FY2022.
Most of the total comprised CO2 emitted at fossil-based power stations. The Daigas Group is striving to curb CO2 emissions from its business operations and at the same time achieve energy savings by combining the operation of energy-efficient fossil-derived power stations with the use of renewable energy sources.

Efforts by the Daigas Group to Reduce CO2 Emissions from City Gas Business

Efforts to reduce CO2 emissions in LNG transportation

Low fuel consumption LNG carrier chartered

Low fuel consumption LNG carrier chartered

In November 2018, Osaka Gas put the fuel-efficient LNG JUNO into service for the transport of LNG, an essential material for city gas. Osaka Gas adopted the new Sayaringo type of LNG carrier, which was instrumental in increasing LNG capacity without changing the width of the vessel. The carrier also adopted a new hybrid propulsion system, further reducing fuel consumption and lowering CO2 emissions and transport costs.

Efforts to reduce CO2 emissions at city gas processing terminals

We are endeavoring through a variety of energy conservation activities to reduce CO2 emissions at city gas processing terminals.

For example, our initiative to recover cold energy from LNG gasification facilities and use it for power generation has helped reduce our electricity purchasing. This method of producing electricity using LNG cold energy, called cryogenic power generation, neither needs fuels nor emits CO2. Two cryogenic power generation facilities are in operation each at the Senboku LNG Terminal and the Himeji LNG Terminal.

The Group is also putting in place various policies to ensure the efficient operation of LNG cryogenic power generation facilities. Cold energy from LNG is supplied to a chemical plant adjacent to the Senboku Terminal for their cooling processes, also helping other companies in the vicinity to save energy and reduce CO2 emissions.

Reducing CO2 emissions at offices

At offices of each company of the Daigas Group, many small steps are being taken to save energy that will add up for achieving energy consumption and CO2 emissions targets. These include having all employees turn off lights that are not needed, switching off office equipment if not in use, and maintaining air conditioning temperatures at reasonable levels. The effort is based on standards such as ISO 14001, Eco Action 21, developed by the Ministry of Environment, and the Daigas Group Environmental Management System (OGEMS). Under the EMS, each and every employee strives to reduce his or her own energy consumption by turning off lights and office equipment not currently needed or in use, and setting air conditioning to reasonable temperatures in line with set targets.

The Daigas Group has actively been implementing advanced energy-conservation measures and measures to reduce CO2 emissions when its buildings are renewed or renovated.

Measures deemed effective for energy saving are horizontally applied to all office buildings of the Daigas Group under the Green Gas Buildings project, which has so far resulted in nine extensively renovated or newly constructed “Green Gas Buildings” by August 2018.

In addition, the Fukiai office of Osaka Gas, located in Kobe City, Hyogo Prefecture, introduced “BCP-Lite,” *1 an emergency power-supply system that enables even a small-sized building not usually equipped with a backup power generator to continue the minimum level of business operations in the event of a natural disaster. The “BCP-Lite” is a system in which the concept of a Business continuity plan (BCP) was added to our conventional energy-saving equipment. We expect this to help the building of a low-carbon society in the future while supporting our business continuity in the event of a contingency.

The “hu+gMUSEUM,” a showroom of Osaka Gas, is equipped with facilities with high energy efficiency, including cogeneration systems, regional air-conditioning systems, solar power generation systems, and solar-heat systems. Furthermore, the Group has built a Smart Energy Network in Osaka City's Iwasaki District where the showroom is situated. The network has played an important role in promoting the region's overall energy saving by establishing an optimal energy control system to ensure the most efficient use of energy (electricity and heat) generated in buildings and devising a high energy security system that can effectively respond to unscheduled power outage.

  • Fukiaki Office

    Fukiaki Office

  • The “hu+gMUSEUM”

    The “hu+gMUSEUM”

BELS table and plate for hu+gMUSEUM

BELS table and plate for hu+gMUSEUM

The Daigas Group received the “Building Energy-efficiency Labeling System (BELS)” *2 assessment for two of its properties in FY 2017. The most recently constructed buildings of the Fukiai Office and the hu+gMUSEUM received four stars and five stars, respectively, under the five-star BELS system for their excellent energy conservation performance. Their respective energy-conservation rates in the year were a high 33% and 39%.

Osaka Gas received the 2018 technology promotion award from the Society of Heating, Air-Conditioning and Sanitary Engineers of Japan for its contribution to local communities and concretization of an advanced energy system through its hu+gMUSEUM showroom, which was recognized as the utility's new information dissemination base.

  • *1“BCP-Lite”
    ”BCP-Lite” is an emergency power supply system for office buildings in which electricity can be supplied without interruption even if power outage occurs following a natural disaster. A self-driven gas engine heat pump (GHP) is incorporated into the system.
  • *2“BELS”
    BELS stands for “Building Energy-efficiency Labeling System.” The labeling system for buildings and housing is aimed at evaluating the energy-saving ability of nonresidential buildings based on the Act on Improvement of the Energy Consumption Performance of Buildings. The evaluation, certified by third parties, is given on a scale of one to five stars. The evaluation result is represented by a number of stars displayed on a special plate.

Smart Energy Network

Smart Energy Network

Osaka Gas structured a district heating and cooling system at the area surrounding the facilities of the Company in Nishi Ward in Osaka City. The system also functions as the Smart Energy Network, where heat and electricity generated in the area are accommodated in the community. The system can be controlled optimally from the perspective of the entire area, realizing an approach to urban planning that allows energy to be used efficiently.

Efforts to reduce CO2 emissions through district heating and cooling systems

High-efficiency gas-fired absorption chiller in the Iwasakibashi district

High-efficiency gas-fired absorption chiller in the Iwasakibashi district

District heating and cooling systems are designed to enable people and offices in the same district to share air conditioning, heating, and hot-water supplying equipment with each other, produce a large amount of cold and hot water for the entire district, and supply it. The Daigas Group was Japan’s first to begin operating a district heating and cooling system in the Senri Chuo district in Toyonaka City, Osaka Prefecture, on the occasion of Expo ‘70 in Osaka in 1970. Since then, the Group has adopted a variety of optimal energy systems in the respective districts in various urban development projects. Currently, a total of nine districts, including five in Osaka Prefecture, as well as in Kyoto, Nara, and Kobe, use district heating and cooling systems. We were ahead of other companies in introducing gas cogeneration systems within the framework of district cooling and heating systems. We have also proactively launched new businesses, including accepting waste heat from customers’ cogeneration systems and supplying power as a registered Specified Electricity Transmission and Distribution Utility.

The Daigas Group has also been working to secure stable heat supplies, promote the advanced use of energy, increase the efficiency of management work, and cut business costs. The Group has recently built a Smart Energy Network combining a natural gas cogeneration system and renewable energy in the Iwasakibashi district (Nishi-ku, Osaka City) with the aim of conserving energy and strengthening energy security.

Currently, we are introducing high-efficiency equipment on the occasion of equipment renewal in the Iwasakibashi district and the Sanjo district in Nara Prefecture. We aim to further increase the efficiency of our systems.

Efforts to Reduce CO2 Emissions from Electricity Business

Daigas Group engages in the electricity generation business using various power sources it owns, including thermal power generations, gas cogeneration systems and renewable energy sources. The Daigas Group is striving to reduce CO2 emissions not only from its own business operations but also from operations at customers by introducing highly energy-efficient fossil-based power generation systems and actively using renewable energy sources.

■ Power Source Capacity of the Daigas Group (Domestic Facilities for Power Generation)

(projects in operation as of March 31, 2022)

Domestic facilities for power generation (unit: 10,000 kW) 249.0
Thermal power generation 202.1
Renewable energy 46.3
Other (e.g., cryogenic power generation) 0.7

Overview of natural-gas-fired thermal power generation

Senboku Natural Gas Power Plant contributing to the reduction of environmental impacts

Senboku Natural Gas Power Plant

Senboku Natural Gas Power Plant

Natural-gas-fired thermal power generation is fueled by natural gas, which has a smaller environmental impact than other kinds of fossil fuels, including petroleum and coal. Exhaust gas from this method contains neither sulfur oxides (SOx) nor soot and dust. Although natural gas combustion generates nitrogen oxides (NOx), the Daigas Group uses low-NOx combustors to minimize NOx generation and removes as much NOx as possible with exhaust gas denitrifiers. Wastewater from this type of power plant is treated by wastewater treatment equipment that has the functions of chemical precipitation, filtration, activated carbon absorption, and pH control in order to reduce the impact of wastewater on water systems. We also use an highly energy-efficient gas turbine combined cycle power generation system to minimize the environmental impact of our natural gas power plants.

The gas turbine combined cycle power generation system uses gas turbine combustors to combust natural gas and use the combusted gas’s power to turn turbines and generate electricity. Furthermore, the heat of exhaust gas from the gas turbines is used to produce steam in waste heat recovery boilers to turn steam turbines and generate electricity. Reusing the heat of exhaust gas in this way, gas turbine combined cycle power generation is a highly efficient power generation method.

With a 1,300°C-class gas turbine installed, the Senboku Natural Gas Power Plant boasts high power generation efficiency of about 57% (on the basis of the lower heating value [LHV]). We believe that this plant can contribute immensely to energy saving and CO2 emissions reduction.

Himeji Natural Gas Power Generation Co., Ltd., a wholly owned subsidiary of Osaka Gas, is also proceeding with a project to newly build the Himeji Natural Gas Power Plant. This project adopts a highly energy-efficient gas turbine combined-cycle system and has undergone an inspection based on the Environmental Impact Assessment Act. As part of this power generation business plan (about 1.8 million kW), Osaka Gas decided in September 2019 to invest in power generation of about 1.2 million kW.

Fukushima Gas Power Co., Ltd., in which Osaka Gas has a 20% investment, has been working on a natural-gas-fired power generation project at Soma Port, Fukushima Prefecture. This project as well adopts a high-efficiency gas turbine combined-cycle system consisting of two 590,000 kW power generation facilities, one of which started operation in April 2020 and the other in August 2020.

■ Energy Efficiency
of Gas Turbine Combined-Cycle Power Generation

(In the case of the Senboku Natural Gas Power Plant)

 Energy Efficiency of Gas Turbine Combined-Cycle Power Generation

Overview of biomass-coal-cofired power generation

Power generation fueled with a mixture of coal and woody biomass, which contributes to reducing the environmental impact of power generation

Nagoya Power Plant and Second Nagoya Power Plant

Nagoya Power Plant and Second Nagoya Power Plant

Biomass fuel burned together with coal (white pellet)

Biomass fuel burned together with coal (white pellet)

The Nagoya Power Plant (capacity: 149,000 kW) and the Second Nagoya Power Plant (capacity: 110,000 kW) use a mixture of coal and woody biomass as fuel to substantially limit CO2 emissions. They also minimize the generation of hazardous substances and noise by utilizing the most advanced environmental conservation technologies, including low-NOx burners and exhaust gas denitrifiers, which reduce NOx generated in boilers, electric precipitators, which remove soot and dust from exhaust gas, and exhaust gas desulfurizers, which remove sulfur from exhaust gas. The removed sulfur is recovered as gypsum and effectively used as recycled resources.
The fuel used at the Nagoya Power Plant and the Second Nagoya Power Plant contain woody biomass of 5% and 30%, respectively. We also aim to increase the operational efficiency of these plants by leveraging the expertise and know-how we have accumulated through the operation of existing power plants.

Introduction of cogeneration-based electricity sources

Energy-efficient natural gas cogeneration facilities are set up on the premises of a client plant. Electricity and heat (steam) generated using the cogeneration system are provided to client companies. The Daigas Group uses part of the electricity generated as electricity sources for its power business, which helps improve the cogeneration facility utilization rate, promotes efficient energy use and reduces CO2 emissions. Daigas Gas and Power Solution Co., an Osaka Gas Group company, operates this type of facility at two locations one at the Uji Energy Center for Unitika Ltd. and the other at the Settsu Energy Center for Kaneka Corp. Power output capacity is 66,800 kW at the Uji Energy Center and 17,460 kW at the Settsu Energy Center.

International power projects

Hallett 4 wind farm project in the state of South Australia, Australia

Hallett 4 wind farm project in the state of South Australia, Australia

Our international independent power producer (IPP) business includes investment in natural gas, wind, and solar power plant projects in North America, Australia, and other regions. During FY2021, we invested in the Three Rivers Power Plant (under construction) in Illinois, U.S., and SolAmerica Energy, LLC, a U.S.-based distributed solar power generator. In FY2022, we concluded an agreement with Summit Ridge Energy, LLC regarding joint implementation of a distributed solar power generation project in Maine. We also reached an agreement with NOVI Energy, LCC, a power source developer in the U.S., to jointly develop a large-scale centralized solar power plant. In January 2022, the Brighter Future Solar Power Plant in North Carolina (U.S.), in which we took a stake in 2021, began commercial operation.
We will continue to explore opportunities to participate in the renewable energy business, which is expected to grow into the future.

■ Power Source Capacity of the Daigas Group (Overseas Facilities for Power Generation)

(projects in operation as of March 31, 2022)

Overseas facilities for power generation (unit: 10,000 kW) 191.9
Thermal power generation 185.8
Renewable energy 6.1

Initiatives to Increase the Use of Renewable Energy

Facilitating the development and use of renewable energy sources

In Japan, the Daigas Group owns wind, solar, biomass, and other renewable energy sources with a total capacity of approximately 460,000 kW, contributing to CO2 emissions reduction.

On March 29, 2022, Osaka Gas made an investment in Leben Energy NO. 1 GK, which owns and operates 82 small- and medium-sized solar power plants (with a total power production capacity of approximately 35,500 kW) developed by Leben Clean Energy Co., Ltd., which is an associated company of Takara Leben Co., Ltd. and develops commercial solar power plants across Japan. On March 31, 2022, Osaka Gas and Sky Solar Japan Co., Ltd., which develops commercial solar power plants across Japan, came to an agreement that Osaka Gas would invest in domestic solar power plants developed by Sky Solar Japan based on their agreement*1 signed in October 2021 on continuous joint development and ownership of commercial solar power plants, mainly small- and medium-sized ones. The power plants were developed by Sky Solar Japan across Japan. The total power production capacity of the six power plants is approximately 23,000 kW.

Osaka Gas has also been developing renewable energy power sources in various fields. The company participated in the Yokohama Town Wind Power Plant (Kamikita-gun, Aomori Prefecture) and Hyuga Biomass Power Plant (Hyuga City, Miyazaki Prefecture) projects. In terms of wind power generation projects, a consortium in which Osaka Gas participated became Japan’s first selected based on public offering guidelines towards realization of a floating offshore wind power generator in a marine renewable energy power generation facility maintenance promotion area offshore Goto City, Nagasaki Prefecture.

To achieve carbon neutrality by 2050, the Daigas Group will contribute to increasing the power generation capacity of renewable energy sources by 5,000 MW*2 in and outside Japan, including sources developed in-house, owned, or procured from other companies, by FY2031. It also aims to increase the percentage of renewable energy in its electricity business in Japan to about 50%*2.

  • *1Osaka Gas and Sky Solar Japan sign an agreement on the joint development and ownership of photovoltaic power plants (news release dated October 26, 2021)
  • *2 Renewable energy includes power sources to which the feed-in tariff (FIT) program applies, such as solar, wind, and biomass energy.

2021 TOPIC) Joint investment in an onshore wind power project

On July 19, 2021, Osaka Gas acquired the Yokohama Town Wind Power Plant through joint investment with Tokyu Land Corporation and Development Bank of Japan Inc. in GK Yokohama Town Wind Power. This is the second project in which the three companies will jointly invest, following the Noheji Mutsu Bay Wind Power Generation Project (power generation capacity: 39,600 kW) announced in October 2020.

This onshore wind farm with a planned power generation capacity of 43,200 kW is under construction in Yokohama Town, Kamikita-gun, Aomori Prefecture, and is aiming to start operation in April 2023. Japan Wind Development Co. Ltd. Group, which has been developing this project so far, will continue to carry out construction management, operation, and maintenance as a joint venture.

The three companies will continue to jointly promote and expand renewable energy by leveraging the knowledge of the renewable energy business of Osaka Gas and Tokyu Land and the financial knowledge of DBJ.

On September 3, 2021, Shiribetsu Wind Development Co., Ltd., in which Daigas Gas and Power Solution Co., Ltd., a wholly owned subsidiary of Osaka Gas Co., Ltd., has a stake, commenced commercial operation of the Shiribetsu wind farm.

The power plant is an onshore wind farm with a power generation capacity of 27,000 kW located in Suttsu-cho, Suttsu-gun, Hokkaido, and Rankoshi-cho, lsoya-gun, Hokkaido. Construction had been underway to start business after the transfer of shares from Japan Wind Development Co., Ltd. to the Daigas Group in 2018. The Daigas Group entered in the wind power generation business in 2004. With the addition of this power plant, the total number of onshore wind farms which started commercial operation in and outside Japan has increased to nine (total power generation capacity: 190,000 kW). This is the first onshore wind farm that has started commercial operation in the eastern part of Japan.

2021 TOPIC) Osaka Gas decides to build biomass power plant that aims for harmony with the local community in Hyuga City, Miyazaki Prefecture By utilizing domestically grown wooden chips supplied by Green Power Fuel, a subsidiary of Osaka Gas

On April 15, 2021, Osaka Gas decided to build a biomass power plant with a generation capacity of 50,000 kW in Hyuga City, Miyazaki Prefecture, jointly with ITOCHU Corporation, Tokyo Century Corporation, and Tokyo Energy & Systems Inc. The project will be operated in harmony with the local community.

Building and operation of the project will be undertaken by Hyuga Biomass Power Generation Co., Ltd., which is jointly owned by Osaka Gas (35%), Aoyama Solar Co., Ltd., a subsidiary of ITOCHU (35%), Tokyo Century (25%), and Tokyo Energy & Systems (5%). The project aims to start operation in November 2024.

In the project, Green Power Fuel Corporation, a subsidiary of Osaka Gas, will supply domestically grown wood chips over the long term as part of fuel, aiming for harmony with the local community in offering renewable energy. Hakko Transportation Co., Ltd., which is headquartered in Hyuga City, will offer full support in unloading, storing, and transporting fuel, including imported wood pellets.

Osaka Gas has been studying measures to help improve the resilience of the local community by supplying electric power generated by the project to the grid in the local area in the event of an emergency, such as a natural disaster.

In operation of the project, Daigas Gas and Power Solution Co., Ltd., a wholly owned subsidiary of Osaka Gas, will undertake technical support and project management support.

Osaka Gas decides to build a biomass power plant in Tahara City, Aichi Prefecture

On November 5, 2020, Osaka Gas announced that it decided to build a biomass power plant in Tahara City, Aichi Prefecture, jointly with JAG Energy Co., Ltd. and Marubeni Clean Power Corporation.

This project aims to complete a 75,000 kW biomass power plant that will use wood pellets as fuel in October 2024. The percentages of ownership of Aichi Tahara Biomass Power Plant G.K., a limited liability company that will build and operate the plant, will be 37.5% for JAG Energy, 37.5% for Marubeni Clean Power, and 25% for Osaka Gas.

After the start of the plant’s commercial operation, Daigas G&P Solution Co., Ltd., a wholly owned subsidiary of Osaka Gas, will play the role of the owner's engineer* as a contractor by making use of Osaka Gas’s accumulated knowledge of power plant operation.

  • * A provider of technical support to the operator

Commencement of commercial operation
of a biomass power plant in Ichihara City, Chiba Prefecture

On December 17, 2020, Ichihara Biomass Power Co., Ltd., a joint venture established by Osaka Gas, ITOCHU Corporation, and Mitsui E&S Engineering Co., Ltd., started commercial operation.

This power plant is located in the Chiba Works of Mitsui E&S Holdings Co., Ltd. in Ichihara City, Chiba Prefecture. It is a biomass power plant that uses wood pellets and palm kernel shell (PKS) as fuel (power generation capacity: 49.9 MW). Its estimated annual power generation is about 350,000 MWh, which is equivalent to the annual power consumption of about 120,000 households.* The launch of the power plant project was announced in September 2017. The plant was constructed by Mitsui E&S Engineering. The three companies will ensure stable management of the power plant by taking full advantage of their strengths. Specifically, a group company of Mitsui E&S Holdings Co., Ltd. will operate and maintain the plant, ITOCHU will supply the biomass fuel, and Osaka Gas will offer power plant management expertise.

  • * The calculation is based on the following:
    [1] Estimated annual power generation: About 350,000 MWh
    [2] Average monthly power consumption of a household: 248.7 kWh (source: Tokyo Electric Power Company Holdings website)
     [1] ÷ ([2] × 12 months) ≒ about 120,000 households

Investment in Starfire Energy Inc., a U.S.-based startup
in the field of “Green Ammonia”

In March 2021, Osaka Gas USA Corporation, a wholly owned subsidiary of Osaka Gas, invested in Starfire Energy Inc., which is developing systems to economically produce carbon-free, storable fuel known as “Green Ammonia”*1 from renewable energy, air and water. Other investors include AP Ventures,*2 Chevron Technology Ventures,*3 New Energy Technology Pty Ltd,*4 and Mitsubishi Heavy Industries America, Inc.

Ammonia is attracting attention as an alternative to fossil fuel because it does not emit CO2 in combustion and can be stored and transported with existing infrastructure technology. Green Ammonia, in particular, does not emit CO2 in production as well and is likely to serve as an energy source that can immensely help achieve a carbon-free society. Therefore, there are heightened expectations of green ammonia manufacturing and supply being established as a business as early as possible.

Starfire Energy Inc. is a U.S.-based startup founded in 2007 to develop renewable energy solutions, which later evolved into a focus on small-scale distributed ammonia production modules*5 and technology for cracking ammonia into hydrogen to generate electricity. Particularly in the field of ammonia synthesis, Starfire Energy has not only a catalytic technology but also a technology for responding flexibly to the fluctuating output of renewable energy, with lower pressure and higher energy-saving efficiency compared with conventional technologies. The company is currently striving to scale up those technologies toward commercialization.

  • *1 Ammonia produced from renewable-energy-based power, water, and air in a process with no CO2 emissions
  • *2 A UK-based startup investment fund
  • *3 A subsidiary of major U.S. oil producer Chevron Corporation
  • *4 An Australian investment fund
  • *5 Small-scale ammonia production equipment that can be easily transported on a large trailer and installed near places of demand

About Green Power Fuel Corporation

In March 2019, Osaka Gas established Green Power Fuel Corporation, a joint venture company that procures and sells domestically grown woody biomass for biomass power plants, in cooperation with Seishin Shinrin Shigen Co., Ltd. and Nippon Paper Lumber Co., Ltd. The Daigas Group already operates or plans to operate seven biomass plants in Japan, including participating in operating the Matsusaka Woody Biomass Power Plant, which is fueled 100% by locally available biomass. In cooperation with Seishin Shinrin Shigen, which has abundant knowledge about forestry, and Nippon Paper Lumber, which has a long track record in dealing in domestically grown woody biomass, Green Power Fuel Corporation procures and transports unused wood from woodlands in Japan as power generation fuel to ensure stable long-term biomass supply for multiple biomass power plants owned or developed by the Daigas Group.

On December 17, 2021, Green Power Fuel Corporation (hereinafter, “GPF”) signed a cooperation agreement with Shiso City, Hyogo Prefecture, on the utilization of fast growing trees for fuel applications, aiming for local production and consumption of biomass fuels and sustainable growth of domestic forestry. GPF decided to start a demonstration project that aims to build a stable supply system of biomass fuels using fast growing trees, in cooperation with Shiso City, Hyogo Prefecture, which has abundant forest resources (land suitable for project operationalization). The company focuses on fast growing trees,*1 which are expected to have shorter growth and logging cycles than those of general tree species, from the viewpoint of further increasing its biomass procurement volume and reducing cost. As the first step of this project, the company plans to examine the growth of fast growing trees and evaluate their usefulness as biomass fuels through trial planting in the forests owned by Shiso City and on abandoned cultivated land. Through this demonstration project, GPF will work to build a sustainable business model for domestic forestry by utilizing fast growing trees as fuels and by utilizing the output of this project. The company will try to realize the independent operation*2 of biomass power plants after the purchase period under the FIT scheme expires.

  • *1 A general term for trees that grow faster than the commonly planted tree species. Some representative species include Chinaberry and Chinese Fir.
  • *2 Under the feed-in tariff (FIT) scheme, renewable electricity is purchased at fixed prices for 20 years at maximum. After this period, the generated electricity must be sold at market prices. For this reason, GPF aims to substantially reduce mainly transportation costs by using domestically produced fuels, thereby realizing sustainable fuel costs.

Demonstrative experiment for the realization
of solar power forecasting services on the assumption of independence from FIT

Osaka Gas conducted a demonstrative experiment on the forecast of solar power generation output in cooperation with Next Kraftwerke (hereafter, “NXK”), a German virtual power plant (VPP*1) operator. The demonstrative experiment was started on October 1, 2019 at the Yura Solar Power Plant (south) owned by Yura Wind Power Development Co., Ltd., a wholly owned subsidiary of Gas and Power Co., Ltd. (currently Daigas Gas and Power Solution Co., Ltd.), a Daigas Group company. The aim of this experiment was to help achieve a highly accurate forecasting service for solar power generation output. Osaka Gas has been working to improve the accuracy of its short-range weather forecast technology, as seen in its registration as a weather forecast service company authorized by the Japan Meteorological agency in September 2018. The aim is that this experiment will help achieve a high accuracy of solar power forecasting by making forecasts in a timely manner while taking into account weather changes occurring up to one hour before.

In Germany, where renewable energy is now widely used, the feed-in tariff (FIT) scheme was adopted in 2000 so that power generated with renewable energy would be purchased at fixed prices. In 2012, to integrate renewable energy into the electricity market, the country adopted a scheme whereby the power purchase price is determined by adding a premium*2 to the market price. This scheme is known as the feed-in premium (FIP) scheme*3. In step with this, power generation companies have begun to carry out renewable energy generation forecasting. Therefore, many companies have come to seek business opportunities in services such as accurate forecasting of renewable power output, which fluctuates significantly, and marketing transactions on behalf of renewable energy companies. NXK is one of these companies, boasting extensive experience in this field, as seen in its management of solar power generation of 3,100 MW in Germany.

Meanwhile, in Japan, the FIT scheme was applied to promote introduction of renewable energy in 2012. In April 2022, the FIP scheme was introduced in accordance with the Energy Supply Resilience Act. For FIP and non-FIT renewable energy, power generation companies are required to forecast the output. Thus, demand for the forecast of the renewable energy power generation amount is expected to increase. Osaka Gas will continue to work on utilization of the forecast of the power generation amount based on knowledge derived from the above demonstration, etc.

  • *1 Abbreviation for Virtual Power Plant. It is realized by business operators called “aggregators” using, in a bundle, the adjustment power supplied by distributed energy sources.
  • *2 A sum added to the market price when renewable power is purchased
  • *3 Abbreviation for Feed-in Premium. It is a scheme whereby renewable power is purchased at a price calculated by adding a premium to the market price. Under this scheme, renewable energy companies are responsible for forecasting power generation output and covering the cost of the imbalance between the projected output and the actual output.

2021 TOPIC) Investment in JEDLIX B.V., a startup company that conducts electricity balancing services business using EVs in Europe

On November 3, 2021, Osaka Gas concluded a capital alliance agreement with JEDLIX B.V. (hereinafter, “JEDLIX”), which is engaged in the balancing*1 services business in Europe, through Osaka Gas UK, Ltd., a wholly owned subsidiary of Osaka Gas. Osaka Gas will participate in the balancing markets*2 in Europe, which is most advanced in the design of the system in the world.

Recently, the balancing function has become increasingly important to cope with fluctuations in the renewable energy output depending on weather conditions in line with global introduction of renewable energy. Europe was quick to introduce renewable energy. Its system design of the balancing market is the most advanced in the world.

JEDLIX is an aggregator*3 operating in Europe. It performs balancing by remotely controlling batteries of electric vehicles (hereinafter, “EVs”) through its proprietary system. JEDLIX is a startup established in 2016. It operates in seven countries, including the Netherlands and France, and has been expanding its business steadily. JEDLIX aims to expand its business by further promoting partnerships with EV manufacturers, EV charging spot operators, and energy retailers.

■ Business Scheme

Business Scheme
  • *1 Power supply must be constantly matched with demand to avoid outages and damage to equipment. Electricity charging and discharging to balance supply with demand is referred to as “balancing.”
  • *2 Markets where power grid operators procure electricity reserves necessary to match the power supply to demand to ensure supply-and-demand balancing or maintain the grid frequency stabilization. Power generation companies and aggregators perform balancing based on orders given by grid operators and receive fees for the services.
  • *3 Aggregators provide grid balancing by remotely controlling their customers’ electricity generation units based on grid operators’ orders.

Establishing a solar power generation company in Thailand

Osaka Gas Singapore Pte. Ltd., a wholly owned subsidiary of Osaka Gas, and Energy Pro Corporation Ltd., a solar power generation company in Thailand, agreed on establishing a joint venture, OE Solar Co., Ltd. (hereinafter, “OE Solar”) in July 2019 to launch a solar power supply business in Thailand.

In Thailand, the government-approved power development plan for 2018 predicts that renewable energy will account for 20% of all power sources (excluding imported hydropower) by 2037. Public interest in renewable energy is growing in the country. Blessed with abundant sunshine, there is high demand for the introduction of solar power facilities at no initial cost.

To capture this new demand mainly among industrial and commercial customers, OE Solar will install solar power generation equipment on the roofs of buildings or in other spaces owned by such customers mainly in Bangkok. The company will continuously supply thus generated power for the customers for 15 to 20 years. By actively promoting the solar power supply business, we will contribute to reducing the environmental impact in Thailand.

■ Business Scheme

Business Scheme

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