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Hitachi

Hitachi Power Solutions Co.,Ltd.

Regional Power Producer and Supplier
Featuring Compact Grid
for the Local Production
for Local Consumption of Renewable Energy

Hioki Regional Energy Co., Ltd.

There has been growing interest in recent years in a new type of regional power producer and supplier (PPS) whereby local government and business jointly participate in the supply of electric power. An early example of this was the commencement of operation in March 2019 of two compact grids intended to facilitate the use of locally generated renewable energy at Hioki City in Kagoshima Prefecture.
This trailblazing initiative is aimed at reducing both energy costs and environmental impacts while also creating new local employment opportunities and promoting economic activity. Hitachi Power Solutions has provided comprehensive support, extending from project planning and assistance with funding applications to equipment installation.
Hitachi Power Solutions also intends to continue working with the power system operator to pursue further progress.

Challenges

  • It is necessary to take advantage of national programs targeting decarbonization and regional revitalization
    to introduce renewable energy and to promote the local production for local consumption of energy.
  • It is necessary to overcome the challenges facing the regions, including depopulation and shrinking
    employment opportunities. In addition, it is necessary to establish ways to keep money flowing in the region
    by changing from paying electricity bills to power generation companies outside the region to power companies inside the region.
  • There is a lack of expertise in how to establish and operate the procedures and systems for the commercial
    operation of this new type of regional PPS.

Project Background

Joint project began with a single consultation

Located not far from Kagoshima City, the prefectural capital, Hioki City is actively pursuing environmentally conscious urban development that includes use of renewable energy. In March 2019, the city commenced operation of its compact grid power distribution network that combines photovoltaic power generation with a co-generation system. The project received support from FY2017 and FY2018 projects of the Agency for Natural Resources and Energy for funding initiatives for the local sourcing of energy that take advantage of the characteristics of the regions in which they are located*1. The system enables the local production for local consumption of energy through the supply of locally generated renewable energy and is made up of an EMS*2 for managing and coordinating energy supply and demand that integrates two compact grids covering the city.

This trailblazing initiative for a new type of regional PPS

What set all this in motion was an inquiry made by local company, Taiyo Gas Co., Ltd., to Hitachi Power Solutions. Mr. Kobira, president of Taiyo Gas Co., Ltd. who is also the representative director of Hioki Regional Energy Co., Ltd., the company set up in 2014 to run the project with funding from Hioki City and other sources, recalls events as follows, “As a local energy company in a city where the population is slowly shrinking, we had a strong desire to establish a new type of regional PPS that could contribute to regional revitalization by cutting energy costs and reducing the load on the environment. However, fearing that we lacked the scale and expertise for such a task, we found when we took our story to Hitachi Power Solutions that they believed in what we wanted to do, initial contact having been made through the wind power company set up in Hioki City.” Through ongoing work encompassing study groups, surveys, and investigations, this led to a business feasibility study and a successful application for funding, culminating in the day when this trailblazing initiative for a new type of regional PPS commenced full operation.

One-stop support

As Mr. Kobira said, “Hitachi Power Solutions became our partners in the true sense of the word, going above and beyond a mere business relationship by, for example, coming all the way from their headquarters in Ibaraki Prefecture to attend monthly meetings.” In this way, Hitachi Power Solutions served as a one-stop source of support for the project, extending from business planning to approvals and other negotiations with local government and companies; engineering, procurement, and construction (EPC contract) of the associated facilities; operation and maintenance; and business management support.

Representative Director Hioki Regional Energy Co., Ltd.  Mr. Ryuhei Kobira
Mr. Ryuhei Kobira
Representative Director
Hioki Regional Energy Co., Ltd.
  • *1 The project was entitled “Construction of a Compact Energy Network for Use of Locally Sourced Energy in Hioki City.”
  • *2 EMS: Energy Management System