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

Aspects Determained as Materiality
  • Energy

    302-1

  • Emissions

    305-5

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 2.84 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 2.84 million tons in FY2021.

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
    56 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 154 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, 2021)

Group companies No. of companies Company names
Energy Resources & International Business Unit 1 Michigan Power Limited Partnership
LNG Power & Engineering Business Unit 15 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, 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 17 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.; 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 Finance 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 3 Osaka Gas Urban Development Co., Ltd., Osaka Gas Facilities Corp., Kyoto Research Park 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 57

■ GHG Emissions* (1,000 t-CO2e)

(FY) 2017 2018 2019 2020 2021
Consolidated companies (Osaka Gas and its affiliates) 65 58 57 59 58
Total 4,363 5,159 5,350 4,963 5,513
Osaka Gas 259 259 209 207 162
LNG terminal 88 84 89 97 105
Power plant 120 124 73 63 18
District heating / cooling 11 10 9 9 9
Other 40 41 38 38 30
Affiliates 4,104 4,900 5,140 4,756 5,351
Power generation 3,783 4,581 4,805 4,431 5,034
District heating / cooling 108 104 97 91 83
Other 214 215 238 234 234
  • * 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.
    CO2 emissions for FY2017 were calculated using the average emission factor of 0.65 t-CO2 / 1,000 kWh, a figure Decemberided under a government plan to combat global warming, approved by the Cabinet in 2016. CO2 emissions through FY2016 were calculated using the factor of 0.69 t-CO2 / 1,000 kWh, a figure shown in an Interim Summary Report compiled in 2001 by the Target Attainment Scenario Subcommittee under the Global Environmental Committee of the Central Environmental Council.
    [CH4 emissions]
    CH4 emission is calculated using the global warming factor of 25, defined in the UNFCCC reporting guidelines on annual greenhouse gas inventories published 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) 2017 2018 2019 2020 2021
Total 4,283 5,073 5,248 4,853 5,408
Osaka Gas 239 239 181 170 125
LNG terminal 75 72 68 68 75
Power plant 120 124 72 62 18
District heating / cooling 10 9 9 8 8
Other 33 34 31 31 25
Affiliates 4,045 4,834 5,067 4,683 5,282
Power plant 3,781 4,579 4,803 4,428 5,031
District heating / cooling 98 94 86 78 73
Other 167 162 178 176 178
  • * GHG emissions for comparison
    For calculation of the yearly CO2 emissions of purchased electricity, the most recent emission factor of the Kansai Electric Power Co., Inc. is used. (e.g. The CO2 emission factor of FY2015 is calculated based on the emissions during FY2014) CO2 emissions of FY2016 and after are calculated using emission factors of electric companies from which we purchased electricity. The yearly CO2 emissions of purchased electricity is calculated by multiplying the year's electricity consumption by the year's emission factor.

CO2 emissions from Osaka Gas's city gas business
*Not subject to third-party verification.

CO2 emissions in Osaka Gas’s city gas business for FY2021 stood at 135,000 tons, with CO2 emissions per cubic meter of gas production (emissions intensity) of 18.6 g-CO2/m³. Compared to 1990, the Kyoto Protocol’s benchmark year, total CO2 emissions were down by 49%, and emissions on a per-unit basis fell by 68%.

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 FY2021, CO2 emissions and intensity increased from the previous fiscal year due to the impact of partial line stoppages caused by construction work at processing facilities.

In 1979, Osaka Gas became the first company in the world to begin operating a cryogenic power generation facility, and in FY2021 the Senboku LNG Terminal and the Himeji LNG Terminal produced approximately 31 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 Osaka Gas (LNG terminals and business locations)

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

Methane emissions from Osaka Gas's city gas business

In the city gas business of Osaka Gas, 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 FY2021, Osaka Gas emitted 58 tons of methane, achieving a continuous reduction.

■ Methane Emissions at Osaka Gas

(FY) 2017 2018 2019 2020 2021
Methane emission (t-CH4) 75 77 88 106 58

CO2 emissions from affiliates

CO2 emissions from affiliate companies amounted to about 5.351 million tons in FY2021.
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. We are endeavoring to reduce CO2 emissions at city gas processing terminals through a variety of energy conservation activities.

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

The Daigas Group engages in the electricity generation business using various power sources it owns, including fossil-based power generation, 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 Generation Facilities Operated by the Daigas Group (Domestic Facilities for Power Generation)

(As of March 31, 2021)

Name of project Location Power generation
capacity
Power generation
method
When the project
began operating
Natural gas-based power generation
  Senboku Terminal Sakai City,
Osaka Prefecture
20,000 kW GTCC*1and others July 2002
Senboku Natural Gas Power Plant Osaka Prefecture
Unit 1, Unit 2:
Takaishi City
Unit 3, Unit 4:
Sakai City
1,109,000 kW GTCC April 2009 (Unit 2)
May 2009 (Unit 1)
October 2009 (Unit 4)
November 2009 (Unit 3)
Himeji Terminal Himeji City,
Hyogo Prefecture
66,000 kW GTCC and others April 2004
Fukushima Natural Gas Power Plant Soma City,
Fukushima Prefecture
236,000 kW GTCC and others April to August 2020
Funamachi Power Plant Taisho-ku,
Osaka City
149,000 kW GTCC April 1999
Torishima Energy Center Konohana Ward,
Osaka City
141,000 kW GTCC April 2002
Uji Energy Center Uji City,
Kyoto Prefecture
67,000 kW GTCC October 2004
Settsu Energy Center Settsu City,
Osaka Prefecture
17,000 kW Gas engine April 2006
Senri Energy Center Toyonaka City,
Osaka Prefecture
7,000 kW Gas turbine January 2008
Biomass-fired and coal-fired power generation
  Nagoya Power Plant Chita County,
Aichi Prefecture
149,000 kW Coal steam turbine,
Partly biomass-fueled power (5%)
April 2000
Nagoya No. 2 Power Plant Chita County,
Aichi Prefecture
110,000 kW Coal steam turbine,
Partly biomass-fueled power (30%)
September 2017
Biomass power generation
  Matsusaka Woody
Biomass Power Plant
Matsusaka City,
Mie Prefecture
300 kW Exclusively for
biomass burning
January 2018
Ichihara Biomass Power Plant Ichihara City,
Chiba Prefecture
49,900 kW Biomass (100%) December 2020
Wind power
  Hayama Wind Farm Takaoka County,
Kochi Prefecture
20,000 kW Wind power March 2006
Hirogawa Myojinyama Wind Farm Arida County,
Wakayama
Prefecture
Hidaka County,
Wakayama
Prefecture
16,000 kW Wind power November 2008
Yura Wind Power Plant Hidaka County,
Wakayama
Prefecture
10,000 kW Wind power September 2011
Hizen Wind Farm Karatsu City,
Saga Prefecture
12,000 kW Wind power March 2005
Hizen Minami Wind Farm Karatsu City,
Saga Prefecture
18,000 kW Wind power January 2008
Hirao Wind Power Plant Kumage County,
Yamaguchi
Prefecture
9,000 kW Wind power April 2009
Inami Wind Power Station Hidaka County,
Wakayama Prefecture
26,000 kW Wind power June 2018
Solar power generation and others
  Torishima Solar Power Plant Konohana Ward,
Osaka City
1,800 kW*2 Solar power April 2013
Torishima Second Solar Power Plant Konohana Ward,
Osaka City
1,200 kW*2 Solar power January 2014
Shoo Solar Power Plant Katsuta County,
Okayama
Prefecture
900 kW*2 Solar power April 2013
Hirogawa Myojinyama Wind Farm Arida County,
Wakayama
Prefecture
800 kW*2 Solar power April 2013
Yawata Solar Power Plant Nabari City,
Mie Prefecture
700 kW*2 Solar power September 2013
Nissan Green Energy Farm at Oita Power Plant Oita City,
Oita Prefecture
26,500 kW*2 Solar power May 2013
Yura Solar Power Plants
(North and South)
Hidaka County,
Wakayama
Prefecture
1,700 kW*2 Solar power December 2016
Kuwaharajo Mega Solar (No.4) Izumi City,
Kagoshima Prefecture
1,700 kW*2 Solar power April 2020
Isoharacho Tokkou Power Plant Kitaibaraki City,
Ibaraki Prefecture
35,000 kW*2 Solar power January 2021
Daigas Energy Co., Ltd. 9 plants 11,000 kW*2 Solar power and others
Energy Bank Japan Co., Ltd. 27 plants 47,800 kW*2 Solar power and others
Total domestic power generation capacity for electricity
business
2,371,000 kW*3
  • *1 GTCC: Gas turbine combined-cycle power generation method
  • *2 Output capacity for solar power is measured in terms of solar power panels.
  • *3 Calculated based on the power generation capacity of the facilities owned by the Daigas Group

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 thermal, 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 June 2021, we also signed an agreement with Summit Ridge Energy, LLC on implementing a joint project for distributed solar power generation.
We will continue to explore opportunities to participate in the renewable energy business, which is expected to grow in the U.S.

■ Power Generation Facilities Operated by the Daigas Group (International Facilities for Power Generation)

(As of March 31, 2021)

Name of project Location Operating capacity
(Daigas Group
share)
Power generation
method
When the project
began operating
Tenaska Gateway IPP Texas, USA 845,000 kW
(338,000 kW)
Natural gas, GTCC June 2004*1
Osaka Gas Power
America
5 plants in USA 1,200,000 kW
(234,000 kW)
Natural gas December 2005*1
Energy Infrastructure
Investments*2
2 plants in Queensland,
Australia
59,000 kW
(18,000 kW)
Natural gas, Gas engine December 2008*1
Hallett 4 Project South Australia,
Australia
132,000 kW
(53,000 kW)
Wind power
(2,100 kW × 63 units)
June 2011
Shuweihat S2 power
generation and water
desalination project
(IWPP)*3
Abu Dhabi,
United Arab Emirates
1.51 million kW
(151,000 kW)
GTCC October 2011
St. Charles Natural Gas
Power Generation
Project
Maryland, USA 725,000 kW
(181,000 kW)
Natural gas February 2017
Shore Natural Gas
Power Generation
Project
New Jersey, USA 725,000 kW
(145,000 kW)
Natural gas, GTCC March 2017*1
Kleen Energy Natural
Gas Power Generation
Project
Connecticut, USA 620,000 kW
(151,000 kW)
Natural gas May 2018*1
Michigan Power Natural
Gas Power Generation
Project
Michigan, USA 125,000 kW
(125,000 kW)
Natural gas, GTCC July 2018 *1
Towantic Energy Center (natural gas-fired power plant) Connecticut, USA 805,000 kW
(399,000 kW)
Natural gas December 2018*1
Fairview Natural
Gas Power Plant
Pennsylvania, USA 1,050,000 kW
(525,000 kW)
Natural gas December 2019
Total international power generation capacity for
electricity business
7,796,000 kW
(2,319,000 kW)
  • *1 Years and months listed indicate the time when a business license was obtained
  • *2 Four gas pipelines, two gas-refining facilities, two power stations, two power transmission lines
  • *3 Water desalination capacity owned by Shuweihat S2: 10 million gallons / day

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 340,000 kW, contributing to CO2 emissions reduction. In FY2020, Osaka Gas signed a cooperative agreement with Acacia Renewables K.K., a Macquarie Group company, so that both parties can jointly examine the possibilities for offshore wind power generation in Japan. Afterward, in July 2020, the two companies sent an Environmental Impact Assessment Consideration Statement for the Saga Karatsu City Offshore Wind Power Project (tentative name) to the Japanese Minister of the Environment and other relevant parties and submitted the statement for public inspection.
Moreover, in FY2020, Osaka Gas signed a memorandum of basic understanding with West Holdings Corporation on jointly exploring new added-value creation businesses in the field of renewable energy. In June 2020, Osaka Gas began to provide D-Solar, a self-consumption-type photovoltaic power generation service. Afterward, on August 28, 2020 and January 29, 2021, Osaka Gas concluded two bilateral contracts with West Holdings Corporation to procure electricity to be generated by West Holdings’ new small-scale photovoltaic power generation facilities for the long term. The latter contract will enable Osaka Gas to procure 200,000 kW of renewable-energy-based electricity from thousands of small-scale photovoltaic power generation facilities to be developed by the counterpart within FY2022.

In FY2021, Osaka Gas also invested jointly with Development Bank of Japan Inc. in D&D Solar GK, which was established to hold solar power assets. Through D&D Solar, Osaka Gas acquired two solar power plants from German-based BayWa r.e Solar Projects GmbH: Kuwaharajo Mega Solar (No. 4) in Izumi City, Kagoshima Prefecture (capacity: approximately 12,000 kW) and the Isoharacho Tokkou Power Plant in Kitaibaraki City, Ibaraki Prefecture (capacity: approximately 35,000 kW).

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* in and outside Japan, including sources developed in-house, owned, or procured from other companies, by FY2030. It also aims to increase the percentage of renewable energy in its electricity business in Japan to about 50%*.

  • * Renewable energy includes power sources to which the feed-in tariff (FIT) program applies, such as solar, wind, and biomass energy.

■ Major Initiatives to Facilitate the Development and Use of Renewable Energy Sources in FY2021

July 31, 2020 Saga Karatsu City Offshore Wind Power Project (tentative name) Sent an Environmental Impact Assessment Consideration Statement for the project and submitted the statement for public inspection
August 28, 2020 Conclusion of a contract with West Holdings Corporation for renewable energy power procurement Procured electricity to be generated by new small-scale photovoltaic power generation facilities for the long term under a bilateral contract
October 19, 2020 Five-party agreement on a joint study on the FOURE Vision Agreed to carry out a joint study aimed at the development of both renewable energy and local communities
October 28, 2020 Three-party joint investment in an onshore wind power project Made a silent partner investment in GK Aomori Wind Power
November 5, 2020 Three-party joint project to build a biomass power plant Decided to build a biomass power plant in Tahara City, Aichi Prefecture
December 17, 2020 Two-party joint investment in D&D Solar GK and acquisition of a solar power plant through the company Acquired Kuwaharajo Mega Solar in operation in Izumi City, Kagoshima Prefecture
December 17, 2020 Start of the commercial operation of a biomass power plant Commenced the commercial operation of a biomass power plant in Ichihara City, Chiba Prefecture
January 29, 2021 Conclusion of a contract with West Holdings Corporation for solar power procurement Procured electricity worth 200 MW from facilities to be developed in FY2022 and environmental value through a bilateral contract
February 1, 2021 Two-party joint acquisition of a solar power plant through D&D Solar GK Acquired the Isoharacho Tokkou Power Plant in Kitaibaraki City, Ibaraki Prefecture, which was put into operation in January 2021

2020 TOPIC) Joint investment in an onshore wind power project

On October 28, 2020, Osaka Gas signed a memorandum of understanding with Tokyo Land Corporation and Development Bank of Japan Inc. (hereinafter, “DBJ”) for joint investment aimed at contributing to more widespread use of renewable energy. As their first joint project, the three companies made a silent partner investment in GK Aomori Wind Power.
This project aims to construct a 36,000 kW onshore wind farm in Noheji Town, Kamikita District, Aomori Prefecture, and put it into operation in April 2022. Japan Wind Development Co., Ltd., which has developed this project so far, will continue to manage it as a co-operator.

DBJ evaluated this project as an innovative initiative of Tokyu Land Corporation and Osaka Gas for more widespread use of renewable energy in Japan, and it used the system of Special Investment Operations* to provide financial support for the project.

The three companies will continue joint efforts toward more widespread use of renewable energy, including wind power, by utilizing the expertise of Tokyu Land and Osaka Gas in the renewable energy business and DBJ’s financial expertise.

  • * Special Investment Operations are designed to encourage private-sector institutions to provide growth capital intensively and temporarily. These operations are conducted partly based on government funds for industrial investment from the perspective of enhancing Japanese companies’ competitiveness and revitalizing local communities.

2020 TOPIC) Decision 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

2020 TOPIC) Commencement of commercial operation of a biomass power plant in Ichihara City, Chiba Prefecture

Biomass power plant in Ichihara

Biomass power plant in Ichihara

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 35,000 kWh
    [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

2020 TOPIC) 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.

The Daigas Group is also studying the possibility of selling woody biomass to other power generators in the future, aiming to consistently expand the business by utilizing the three companies’ strengths.

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, renewable energy 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 transaction 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 adopted in 2012 to encourage the use of renewable energy. The FIP scheme will also be adopted in Japan in compliance with the Act on Partial Revision of the Electricity Business Act and Other Acts for Establishing Resilient and Sustainable Electricity Supply Systems, which will come into effect in April 2022. It is expected that services similar to those in Germany will become necessary under the FIP scheme.

Osaka Gas has been making various efforts to realize demand response (DR)*4/VPP operation services for the effective use of distributed energy resources, including demonstrative experiments on optimal storage-battery operation and control, which started in August 2018. In the latest demonstrative experiment, Osaka Gas worked toward providing new services for more effective use of renewable energy in anticipation of system changes.

  • *1 A virtual power plant (VPP) is a network of distributed power sources bundled by a business operator called an “aggregator” to ensure a sufficient supply capacity and supply-demand adjustability.
  • *2 A sum added to the market price when renewable power is purchased
  • *3 Feed-in premium (FIP) 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.
  • *4 Demand response (DR) denotes changes made to electricity demand patterns by the owners of distributed energy resources or third parties through the control of the relevant energy resources.

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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