Energy Saving Business in Japan

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Randolph Pierce
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1 Energy Saving Business in Japan (Energy Service Company) JICA Study Team

2 Eco-mind of the Company in Japan 1. Obligation to the Energy User in Regulation and Law Energy users are required to report energy usage and to save energy consumption. 2. Corporate Social Responsibility (CSR) As part of their social responsibility, many companies have been actively working on energy saving. 3. Company Competitiveness Some companies make to company competitiveness by cost saving of energy. (measures to energy crisis) The energy users must take measures for saving energy. 2

3 Problem Faced the Company to Saving Energy 1. They don t have the know-how of the energy saving method. Energy Audit Planning and Design 2. They don t have the initial cost for implementation. Installation and Procurement of the Equipment Financing 3. They can not confirm the result of the saving. Monitoring and Measurement Verification 3

4 What is Business? An, or Energy Service Company, is a business that develops, installs, and arranges financing for projects designed to improve the energy efficiency and maintenance costs for facilities over a five to twenty year time period. Typically, offer the following services: > develop, design, and arrange financing for energy efficiency projects; > install and maintain the energy efficient equipment involved; > measure, monitor, and verify the project's energy savings; and > assume the risk that the project will save the amount of energy guaranteed. Finance Arrangement Energy Audit Detail Design Installation of Equipment Measuring, Monitoring and Verifying Maintenance of Equipment Saving the amount of energy guaranteed 4

5 Approach to Owner (End-user) Finance Arrangement Energy Audit Detail Design Installation of Equipment Measuring, Monitoring and Verifying Maintenance of Equipment Contract Basic Agreement for Many companies carry out an energy audit to propose without cost. 5

and Verifying Maintenance of Equipment Contract Basic Agreement

6 Scheme of Business Benefit of Owner Cost of Benefit of Owner Cost of Benefit of Owner Saving of Energy cost Energy Cost Energy Cost Energy Cost Energy Cost Implementation of Performance Guarantee by Termination of Contact Contract for 5-20 years 6

Energy Cost Energy Cost Energy Cost Implementation of

7 Detail of Cost Benefit of Owner Cost of Benefit of Company Other Operation Cost Monitoring Cost Maintenance Cost Service Portion Interest Investment Cost Finance Portion Investment Cost > Energy Audit > Detail Design > Procurement and Installation 7

Portion Interest Investment Cost Finance Portion Investment

8 Market in Japan ( ) (Million JYen) source: JA 50,000 40,000 30,000 35,322 30,322 27,758 40,644 20,000 17,153 17,595 13,988 10,000 10,000 7,407? 3, , (year) JA established Lehman's fall Introduction of on site typed CGS at factory Energy Service Provider for Industry for Industry Energy Service Provider for Commercial (Building) for Commercial (Building) 8

3,553 988 1,925 0 1998 1999 2000 20012002 2003 2004 2005 2006 2007 2008 2009 (year) JA established Lehman's

9 Role of JA JA established in Oct in order to develop business and its training. JA supports industry through development of market, information exchange and support of R&D. Government Recommendation of measures to promote business Number of Member Companies: 124 (as of November 2010) JA Member Companies Independent Company: 4 Engineering and Construction Company: 56 Energy Company (electricity, gas, oil): 23 Manufacturer and Maker: 14 Consulting Company: 8 Financing Company: 7 Others: 12 Promotion of business Market 9

Government Recommendation of measures to promote business Number of Member Companies: 124 (as of November 2010) JA Member Companies

10 Scheme in Japan (1) Customer Owner of Facility Contract Service Fee Engineering Company Pay back Financing Financing Company This scheme is used in many cases for private sector. 10

11 Scheme in Japan (2) Customer Owner of Facility Contract Service Fee SPC Joint Venture/Consortium Financing Company Engineering Company This scheme is used in many cases for public sector. 11

12 Scheme in Japan (3) Customer Owner of Facility Contract Service Fee Financing Company Fee Engineering Engineering Company This scheme is used in rare cases for private sector. 12

13 Prototype Financial Mechanism for Promotion of Energy Efficiency Business [1] Accreditation Governmental Fund Credit lines for low-interest loans Businesses Marketing collaboration Participating Local Banks Loan money Energy survey, advisory, equipment provision, etc. Building Owners/Management Payback Source: JICA Study Team 13 Copyright (C) Mitsubishi Research Institute, Inc.

Participating Local Banks Loan money Energy survey, advisory, equipment provision, etc.

14 Prototype Financial Mechanism for Promotion of Energy Efficiency Business [2] Governmental Fund Entrusting agreement Credit lines Verification Businesses Verification Verification Consultants Participating Local Banks Energy survey, advisory, equipment provision, etc. Verification Building Owners/Management Loan agreement Source: JICA Study Team 14 Copyright (C) Mitsubishi Research Institute, Inc.

Participating Local Banks Energy survey, advisory, equipment provision, etc.

CSR REPORT 2016 Corporate Social Responsibility Report

CSR REPORT 2016 Corporate Social Responsibility Report 01 02 03 07 13 14 15 17 Business 19 20 21 22 Support and Contribution 23 Management System 27 31 with Employee 02 Business 03 1 2 04 18 1 3 4 2 6