Smart Grid Projects Update: Lessons Learned, Business Models, and Key Emerging Trends

March 3, 2015 | Session 1

3/9/2015 1

Case Study in Japan

Dr. Hiroshi Kuniyoshi

Executive Director

NEDO

2 3/9/2015

About NEDO

2

Ministry of Economy, Trade

and Industry

NEDO is Japan’s largest public organization promoting R&D as well as the dissemination of energy, environmental, and industrial technologies.

Established: October 1, 1980 Employees: 800 Chairman: Mr. Kazuo Furukawa Budget: About 1 billion EUR

New Energy and Industrial Technology Development Organization

Industry Academia

Government

3 3/9/2015

The Smart Community Concept

3

Large-scale solar energy generators

Smart houses Gas engine cogeneration system

Control center that optimizes supply and demand of energy for a region (Community Energy Management System)

Rapid charging stations

Power storage devices

ITS

Wind farm on land

Offshore wind farm

Small-scale hydropower generators

New transport infrastructure integrated with energy network

Power storage devices

Smart buildings (Building Energy Management System)

Electric bicycles

Factory Energy Management System

Heat pump water heater

Energy-saving air conditioner

Washer-dryer

Refrigerator LED

lightning TV

Smart phone

Solar energy generation

Smart meter

HEMS*

Fuel cell cogeneration system

Electric car

*Home Energy Management System

Li-ion battery (replacement type)

Li-ion battery (fixed type)

Inverter Motor

Electric buses (to be converted to streetcars in future)

Source: Adapted from METI

4 3/9/2015

Energy Consumption and Product Trends in Japan

4

Transport sector

Residential and commercial sector

Industrial sector

Oil crisis Oil crisis

LCD-TV

PRIUS LEAF

EcoCute (Heat pump)

ENE-FARM (Fuel cell)

LED

Li-ion battery

Source: Comprehensive Energy Statistics from Preliminary Report for 2012 and Annual Report on National Accounts

5 3/9/2015

Recent Developments in Japan

5

Smart meters (2011-2024)

Smart community

Electricity system reform (2003-2020)

Demonstration projects (2010-…)

Earthquake (2011)

Establishment of JSCA (2010)

Power shortages and outages

(2011)

Feed-in tariff scheme (2012-…)

6 3/9/2015

Smart Meters in Japan

6

Ａ

Ｂ Ｃ

Third parties

Utility

Users

HGW

HEMS

Smart meters Private network

Public network

7 3/9/2015

Electricity Reform in Japan

7

Expanded use of nationwide grid

Full retail competition

Unbundling of T&D sector

Establishment of OCCTO*

Source: METI

2018-2020

2016

2015

* Organization for Cross-regional Coordination of Transmission Operators

8 3/9/2015

Why Do We Need Smart Communities?

8

Great East Japan Earthquake

Regional energy security

Promotion of energy

savings

9 3/9/2015

Expectations for Smart Communities in Japan

9

Energy saving and storage devices

At normal times

Efficient energy supply: Supply and demand controlled by encouraging user awareness

In an emergency

Energy savings: Energy use optimization without sacrificing comfort

Securing energy supply: Renewable energy, cogeneration, etc.

Source: METI

Energy generation devices

Building energy management system

Home energy management system

10 3/9/2015

Energy Management Is One Key Enabler

10 10

1. Energy Management System 2. Communication Interface 3. Infrastructure for Utilizing Big Data 4. Demand Response 5. Life Support Services

Energy generation equipment

Energy Saving & Storage Equipment (HVAC, Lighting, Home Appliance, Batteries)

Community Energy

Management System (CEMS)

Home

Building

Factory

Source: METI

11 3/9/2015

Smart Communities in Japan

11

Single sector (homes)

Multiple sectors (integrated control)

High grid dependence

Housing subdivision Metropolis

Low grid dependence

Detached housing with EVs Local community

Four Categories of Customers

12 3/9/2015

Four Major Demonstration Projects in Japan

12

Kitakyushu City

Keihanna Science City Yokohama City

Toyota City

13 3/9/2015

Results of Four Major Demonstration Projects

13

Region Number of participating households by groups

Peak shaving results

Yokohama Control: 400 CPP*: 800

15.2% in summer 2013

Toyota Control: 80 CPP: 80

15% in winter 2012 11% in summer 2013 10% in winter 2013

Keihanna

Control: 300 CPP: 381

22.4% in summer 2012 21.3% in winter 2012 14.7% in summer 2013 20.1% in winter 2013

Kitakyushu Control: 68 CPP: 120

13.1% in summer 2012 12.0% in winter 2012 10.1% in summer 2013

* Critical Peak Pricing

14 3/9/2015

Challenges in Building a Smart Community

14

0 20 40 60 80

Enforcement of regulations for energy interchange is unclear.

Developing a business model is difficult.

Element technology and equipment are expensive.

Players to implement projects in the region are missing.

Advantages of end users in the development of smart community are

not clear.

Challenges in building a smart community

1) Outreach issue

2) Absence of proactive players

3) Economic efficiency issue

4) Regulatory framework issue

39.4%

47.9%

63.4%

24.4%

45.8%

Source: METI

15 3/9/2015 15

Source: METI

Improvement of energy efficiency

Reduction of energy cost

Promotion of clean energy

Independent supply of energy in preparation for disaster

Increase in self-sufficiency of energy supply

Creation of new services, industry, and employment in area

Promotion of further utilization of local resources

Activation/independence of regional community activities

Creation/cultivation of new markets/customer base

Enhancement of value of the region and real estate

Construction of wide area network

Development /demonstration of new technology/services

Development /demonstration of new business model

Purpose of Participating in Smart Community Project

Purpose of local governments Purpose of private businesses

16 3/9/2015

Lessons Learned

16

1. Social understanding and interest in smart communities have not been sufficiently promoted.

2. Players to implement projects in the region are missing.

3. Element technology and equipment are expensive.

4. Regulatory framework is not clear.

17 3/9/2015

Smart Community Development Needs

17

• Further promotion of technological development, especially for integrating renewable energy

• Involvement of consumers for further savings

• Creation of market environment where new businesses can play roles

• International sharing of best practices needed

18 3/9/2015

Feasibility Study for a Smart Community Project in Haryana

18

Electricity distribution lines

Smart meter

Smart meter

Smart meter Smart meter

Supervisory Control and Data Acquisition monitoring and control system

1. Demonstration of peak load reduction technology 2. Demonstration of grid monitoring and control technology 3. Demonstration of prevention technologies for stealing electricity,

alteration of electricity metering, omission of fee collection

Smart community demonstration

Data

Capacity building

1. Reducing electricity distribution loss 2. reducing failure rate of pole transformers 3. Reducing frequency of power failure

Before After

Sharing Japanese operational know-how of electricity distribution system

Indian company: Uttar Haryana Bijli Vitran Nigam Limited (UHBVNL) Japanese companies: FUJI ELECTRIC CO., LTD., Sumitomo Electric Industries, Ltd., and THE Power Grid Solution Ltd.

19 3/9/2015

Ongoing Collaboration with India

19

Collaboration with Andhra Pradesh since 2014

Collaboration with Confederation of Indian Industry since 2013

India-Japan Energy Forum since 2006

20 3/9/2015

20

20 20

Collaborative Projects in India

Energy management systems in Telecom Towers (62 sites, ongoing)

Coke dry quenching system (2006-2011)

Energy center for a steel plant (preparatory stage)

Capacity building project (2009-2011)

Panipat

New Delhi

Mumbai Pune

Chennai

Angul

Jamshedpur

Vishnupuram

Smart grid project (preparatory stage)

Highly efficient coal preparation system (2008-2014)

Sinter cooler waste heat recovery system (2009-2014)

Waste heat recovery system for a Steel Plant (2008-2014)

Waste heat recovery system for a cement plant (2001-2004)

Cooperation with CII (Confederation of Indian Industry) for Dissemination

Electronic equipment recycling system (ongoing)

Solar power microgrid system (ongoing)

Dual-fuel generation system(2008-2011)

3/9/2015 High-performance industrial furnace

(preparatory stage)

21 3/9/2015

Thank you. Let’s talk!

Dr. Hiroshi Kuniyoshi Executive Director

NEDO

21

22 3/9/2015

Four Major Demonstration Projects in Japan (1)

22

Keihanna Science City

• Demand-side management of load (700 households) • Energy-saving consultations • Kansai Electric Power Company, Mitsubishi Electric Company,

and Mitsubishi Heavy Industries

Housing subdivision

23 3/9/2015

Four Major Demonstration Projects in Japan (2)

23

Kitakyushu City

• Cogeneration plant as base load station • Smart meter used for real time pricing (180 customers) • Fuji Electric Co., Nippon Steel and Sumitomo Metal Corporation

Local community

24 3/9/2015

Four Major Demonstration Projects in Japan (3)

24

Toyota City

• Automatic control of home appliances in 67 homes • Next-generation transportation system with next-generation

vehicles from Toyota Motor Corporation and Chubu Electric Power Company

Detached housing with EVs

25 3/9/2015 25

Four Major Demonstration Projects in Japan (4)

25

Yokohama City

• Energy management system for 4,000 households and 10 large buildings

• VPP through integrated management of large storage batteries using technologies from Toshiba and Tokyo Electric Power Company

Metropolis