With increasing demand for cost-efficient and environment-friendly energy, a growing number of hotels, hospitals and major industrial facilities are adopting cogeneration — a system that makes more efficient use of heat and electricity generated from the same source.
Facilities equipped with cogeneration systems produce their own electricity and use the heat made in the process to warm water and floors or fill other thermal needs on the spot, drastically reducing energy costs.
With interest in the environment rising, power utilities and related industries now hope to bring the benefits of cogeneration to ordinary households.
Existing thermal power plants produce copious amounts of heat to produce electricity. But since they are usually built far away from the end user, that heat goes wasted into rivers, oceans or the atmosphere.
In the case of cogeneration, however, the heat is recycled for other uses, effectively raising the energy efficiency of the systems to as high as 80 percent — nearly twice that of conventional power plants.
“Cogeneration is a favorable system for businesses and facilities that require a sufficient amount of constant heat for their operations,” said Hideo Kuroda, a spokesman of Japan Cogeneration Center.
Demand for cogeneration has been rising.
According to a report from the Ministry of Economy, Trade and Industry, the total amount of electricity generated from natural gas cogeneration systems in fiscal 1999 was 1.52 million kw, up 50 percent from fiscal 1996.
A cogeneration system usually consists of an engine, a generator and a heat exchanger that recovers heat from the engine to warm water. The water is also used to cool the engine. Most run on natural gas, but others can be driven by fuel cells.
The government aims to achieve some 4.64 million kw of electricity generated by cogeneration in fiscal 2010, or triple the figure for 1999.
Experts say government support is one of the many reasons behind the alternative energy system’s growing popularity.
The state gives subsidies to companies and organizations that use cogeneration, depending on the size of the system.
But deregulation in the electricity industry has also contributed, mainly by reducing electricity costs and giving customers more energy options, said Tomohiko Iwasaki, senior researcher at The Japan Research Institute Ltd.
“The Japanese have been paying fixed utility charges as if they were paying taxes,” Iwasaki said. “But liberalization made them realize that utilities are the things that they can choose like other products.”
For 31 years, the nation’s power market had been dominated by 10 regional electric utilities. In 1995, however, the law was revised to let other companies into the market for electric generators. And last year, further deregulation partially opened the market for retail electricity — mainly to large-scale corporate consumers.
Another reason behind cogeneration’s growing popularity is interest in the environment. Most of the systems use natural gas, which generates less carbon dioxide and nitrogen oxide compared with other fossil fuels.
Iwasaki said the Kyoto Protocol, adopted at the Third Conference of the Parties (COP3) to the U.N. Framework Convention on Climate Change in 1997, which set legally binding targets for industrialized countries to slash their emissions of carbon dioxide and other greenhouse gases, spurred companies to cut emissions, making cogeneration a favorable option.
Gas companies and other industries are developing compact cogeneration systems that rate at about 1 kw, hoping they can be sold to regular households in the near future.
“There is strong demand for saving energy, and we believe there is high potential for cogeneration to spread into households,” said Yoshitaka Kayahara, manager of the residential cogeneration development department at Osaka Gas Co. “Considering the need to reduce the amount of carbon dioxide emissions to prevent the greenhouse effect from escalating, there is a necessity to introduce cogeneration.”
In October, Osaka Gas began testing the market for home-use cogeneration systems by adopting Honda Motor Co.’s 1-kw gas engine.
Kayahara said the system is capable of providing most of the heat as well as 40 percent of the total electricity that an average household needs. He also said the system can save 30,000 yen to 40,000 yen a year in lighting and heating costs.
After testing the new system at 100 households in fiscal 2002, the company will put the compact generator on the market for 700,000 yen. It will be the first in the industry to sell a compact gas engine cogeneration system, it said.
IBF Co., a small firm in Chuo Ward, Tokyo, has introduced a residential cogeneration system that uses a Stirling engine, which operates on external combustion. The engine is run by a piston powered by a heated gas contained in its cylinder that expands and contracts in cycles.
IBF utilizes the Stirling engine manufacturered by Whisper Tech Ltd. of New Zealand, which uses fuels such as kerosene, light oil, liquefied petrolium gas and liquefied natural gas. But an IBF official said that a Stirling engine, in theory, can run on any type of fuel, as external combustion engines only require a sufficient amount of heat to operate.
“Because it can use anything as the fuel to run the system, we think Stirling engine cogeneration has huge potential,” the official said. The system, which can generate 0.75 kw, went on sale in March for 3.5 million yen. Despite the price, IBF has sold 14 units to households and dormitories, he said.
Riding automakers’ interest in electric vehicles, however, most companies engaged in creating home-use cogeneration systems today are focusing on fuel cells as their generators.
A fuel cell converts hydrogen into electricity through a chemical reaction that produces heat and water as its only byproduct. It is currently considered the ultimate option for clean energy. A fuel-cell-based residential cogeneration system will depend on natural gas as its source of hydrogen, the companies said.
Home appliance makers, including Matsushita Electric Industrial Co., Toshiba Corp. and Sanyo Electric Co., as well as Toyota Motor Corp. are developing fuel-cell cogeneration systems for households. Many aim to have a 1-kw cogeneration system on the market by around 2004 or 2005.
Kayahara of Osaka Gas, which is also developing a fuel-cell cogeneration system, explained that gas cogeneration systems provide more heat than electricity, while fuel-cell cogeneration systems are just the opposite.
“We believe that there will be demands for both gas and fuel-cell engines, because the use of energy will vary depending on customers’ lifestyles, as well as where they live,” he said.
Osaka Gas aims to release its residential fuel-cell cogeneration system in 2005, at a price of around 600,000 yen.
Though lowering the initial cost of the system is probably a common concern for all competitors, they also share a common belief that once the residential cogeneration system becomes accepted, mass production will allow costs to be reduced.
While technology will continue to advance and consumers will receive more options and services for electricity procurement, Iwasaki of The Japan Research Institute noted that people must also recognize that they will inevitably be held responsibility for their choices.
“Being able to receive a variety of services will mean there will be risks that quality may decline in some services, although the price may become more consumer-friendly,” he said. “But being able to hold responsibility for choices and decisions is an important move.”