Natural Gas Technologies and Markets: Japanese Experience

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For Presentation at APEC Clean Fossil Energy Technical and Policy SeminarFriday, 28 January 2005, Cebu City Marriott Hotel, Cebu, PhilippinesRecent concern with the global environmental problem prompted energy savingfrom the view point of not only energy cost reduction but also global environmentalprotection. On-site co-generation with natural gas is a very effective way to improveenergy use efficiency at industrial sites and thus has been promoted in Japan.Japanese gas utility companies have made significant effort to introduceco-generation systems to Japanese energy markets through demonstration of itseffectiveness in the early stage, and by negotiating deregulation of connections ofco-generation systems with the power grid.Industrial sector demand accounts for 40% of annual city gas sales in Japan in2002 and has shown highest ratio of demand increase.2.2. Example of Industrial Natural Gas Technologies2.2.1. FFR burnerFFR (Fulltime FDI Regenerative burner) is an industrial burner system applicableto industrial furnaces such as forging furnaces or heat rolling furnaces. FFR is acombination of an ultra low NOx (nitrogen oxides) burner (FDI burner) originallydeveloped by Tokyo Gas and a compact regenerator and has realized a very lowNOx combustion and very high combustion efficiency at the same time. In a FFRsystem, more than 80% of exhaust heat is recovered and it produces very low NOx(90ppm, O2=11%) up to 1400 deg. C.2.2.2. Co-generationCo-generation systems are available both with gas turbines and gas engines.Tokyo Gas offers its customers co-generation systems from 0.5MW up to 10.3MW generation capacities with gas turbines. All the exhaust heat from gas turbinescan be recovered in the form of steam, and thus gas turbine cogeneration systemsare suitable for customers who require a large amount of process steam.In recent years, large capacity gas engines have been used where highgeneration efficiency is demanded. Exhaust heat can be recovered in the form ofeither hot water or steam.Natural gas co-generation is also well accepted in factories where power supplyinterruption can have a significant impact on production process, such assemi-conductor manufacturing.By the end of March 2004, more than 2,200MW capacity of natural gas drivenco-generation systems have been installed in over 600 factories in Japan.3. Natural Gas Technology in Japanese Commercial Energy Market3.1. Air-conditioning with Natural GasNatural gas use in commercial market started with hot water boilers and restaurantcooking stoves. Japanese gas utilities have been making significant effort to captureair-conditioning demand for natural gas, because cooling demand in buildings in hotand humid Japanese summer can create a significant natural gas load whendomestic water heating demand is low.Absorption chillers driven by natural gas have taken up a large share ofPage 3 of 5
For Presentation at APEC Clean Fossil Energy Technical and Policy SeminarFriday, 28 January 2005, Cebu City Marriott Hotel, Cebu, Philippinesair-conditioning units installed in large buildings in urban areas in Japan. Also, tocapture air-conditioning demand in smaller buildings, Japanese city gas utilitiesinitiated development of GHP’s (Gas Engine Heat-pumps) with the aid ofgovernment funding and successfully introduced them to the market.In recent years, to achieve energy savings, office buildings, hotels and hospitalshave started to introduce co-generation systems. Electricity is generated with gasturbines or gas engines and the exhaust heat is recovered as either hot water orsteam and used to drive absorption chillers for air-conditioning.With air-conditioning, demand in commercial sector accounts for 16% of city gassale volume in Japan in 2002.3.2. Example of Commercial Market Natural Gas Technologies3.2.1. GHP (Gas Engine Heat-pump)A GHP is an air-conditioning unit for cooling and heating. In GHP, a refrigerantcompressor is driven with a gas engine. The capacity ranges from 8 to 56 kW.Typically multiple units are installed to cover up to 30,000m² of floor space. Early in2005, units with improved COP (Coefficient of performance) of 1.5 will beintroduced to the market.Approximately 1,000MW or 26,000 units of natural gas driven GHP’s are annuallyinstalled in recent years in Japan.3.2.2. Absorption ChillerAbsorption chillers use water as the refrigerant and are driven by heat fromnatural gas combustion, steam or even hot water. They are particularly suitable forlarge scale buildings of over 30,000m² of floor space. As mentioned above, theycan be used to recover heat in gas engine or gas turbine co-generation systems.More than 24GW of absorption chillers have been installed and running in Japan.4. Natural Gas Technology in Japanese Residential Energy Market4.1. Competition with electricityKitchen and hot water demand in residential market have long been the majormarket for Japan’s city gas utilities. But in recent years, competition with electricutility companies has been intensifying because electric utilities are making inroadsinto residential market with electric kitchen stoves and heat-pump water heaters. Insome areas in Japan, more than 10% of new residences are so-called “all electric”houses.Japanese gas utilities are trying to counter the competition by introducing energyefficient natural gas appliances and thus by offering more comforts at less cost forthe consumers.One of these technologies is an instantaneous hot water heater with latent heatrecovery (”Eco Jouzu”). Another offering is Polymer Electrolyte Fuel Cell (PEFC)which will be introduced to the Japanese market for the first time in the world early inFebruary. PEFC will not only create substantial demand for natural gas in residentialmarket but also open up the way for city gas utilities to enter into electricity businessPage 4 of 5
Page 3 and 4: Composition of Primary Energy Suppl
Page 5 and 6: Efficiency Improvement of Gas Engin
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Page 9 and 10: Types of Fuel CellPhosphoricAcid Fu
Page 11 and 12: Conclusion• Natural gas: Japan’
Page 13: For Presentation at APEC Clean Foss
Page 17: Profile of Hisao WatanabeJanuary 10

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