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Japan's energy-saving policy and first ESCO Project on private fund undertaken by local government

Panel: Panel 5. Market-based instruments

Author:
Etsuo Shito, Gas and Power Incorporated

Abstract

Initiatives for ESCO projects in Japan started in 1996 with the establishment of the ESCO Review Committee in the Ministry of International Trade and Industry. The ESCO Promotion Council was established in 1999 as a private organization. This ignited each company's full-fledged participation in ESCO projects.

Based on an Osaka Prefectural hospital as an example, which is the first ESCO project on private fund adopted by any local governments in Japan, this report discusses Japan's energy saving policy and legal issues in applying an ESCO project to public buildings. The report also introduces the project scheme, contract terms along with the outline of energy saving technologies and energy-saving effects actually achieved between April and November 2002.

The subject case is hospital had spent approximately 2 620 thousand Euro per year for utility bills. Our energy saving targets were reduction of 598 thousand Euro or 23 % in the utility costs, 25 % reduction in energy consumption, and 31 % reduction in CO2 emission.

Achievement of 75 % of the target reduction in utility costs was guaranteed to the client. The ESCO system came into operation in April 2002. The survey results after eight months showed that the energy-saving effects had exceeded the target values.

Energy-saving technologies were applied to the cogeneration system, the inverter control of the pumps and fans, water-saving equipment, drag reduction technology of surfactant for chilled and hot water pipes, and high-efficiency lighting equipment. Furthermore, the remote control monitoring system using the Internet has been applied in order to save operation costs.

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