Kitakyushu Smart Community Creation Project

By smartgrider In DEMAND SIDE MANAGEMENT Posted 2015-05-14 12


Project ownershipKitakyushu Smart Community Council
Overview of Yahata Higashida district ● Area: 1.2 k㎡
● Employment: About 6,000
● Residents: About 900
● Corporations and organizations: About 210
● General households: 230
Power supply ● Supply source: : Yawata Steel Works, Nippon Steel & Sumitomo Metal Corporation
● Power generation facility: Natural gas engine cogeneration [33MW]
● On-premise distribution: Supplied through private line
Objective ● 50% CO2 reduction [as compared with general districts in city in 2005]
● 20% energy conservation
● Peak shaving: 15%
Project scale 38 subjects, 16.3 billion yen
ContactsSmart Community Policy Office, Energy Conservation and Renewable Energy Department, Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry
Smart Community Grand Design Department, Power & Social Infrastructure Business Group, Fuji Electric Co., Ltd.
AMI Roll outYes
Time of Use Tariff Time of Use is mandatory for about 24 million household customers and about 5 million


Kitakyushu Smart Community Creation Project

The Kitakyushu Smart Community Creation Project was selected by the Ministry of Economy, Trade and Industry of Japan in April 2010 as a project in one of four areas where the Next Generation Energy and Social System Demonstration Program, which aims at creating a Japanese-style Smart Grid and its overseas deployment, is to be implemented.

This project was launched by “Kitakyushu Smart Community Council”that comprises more than 73 firms and organizations, including City of Kitakyushu, Nippon Steel & Sumitomo Metal Corporation,IBM Japan, Ltd., YASKAWA Electric Corporation, and Fuji Electric Co., Ltd.

Master Plan (1) was formulated to cover the project scale of a total of 16.3 billion yen and 38 subjects including regional energy management and installation of solar PV equipment in five years from 2010 to promote this project.

  • This year is the fourth year of the 5-year demonstration period (fiscal 2010 to 2014) in which the demonstration tests of demand response etc. are being conducted.

Higashida cogeneration power plant of Higashida Cogeneration Corporation is wholly owned by Nippon Steel & Sumitomo Metal Corporation and is supplying power throughout Higashida district. Higashida Cogneration possesses a power generation facility (33 MW) consisting of a natural gas engine cogeneration system in the premises of Yawata Steel Works of Nippon Steel & Sumitomo Metal Corporation, which is in charge of selling electricity. In addition, Higashida Cogeneration Corporation also has a private electric power transmission line in the HIgashida district to supply power to the households, factories, offices, etc.

“Kitakyushu Hydrogen Town Project” aims at effectively using hydrogen extracted from byproduct gas generated in the course of steelmaking process at the steelworks. This hydrogen is supplied as fuel through hydrogen pipeline running through the town to pure hydrogen fuel batteries installed at hydrogen stations in Kitakyushu and the housing complexes, commercial facilities, and public facilities in the Higashida district, so that electric power and heat generated by the fuel cells can be used as energy.


Objectives & Benefits

The objectives of this demonstration project are as follows:

  • Effective use of energy (electric power, heat, hydrogen) in the entire district
  • Proposal on how distributed energy system should be used
  • Realization of energy conservation and peak shaving of demand for electricity

To achieve the above objectives, the following will be implemented: Establishment of new energy system centered in a community energy conservation site and in coordination with Building Energy Management System (BEMS) and Home Energy Management System (HEMS)

  • Demand side management of customer participation type such as “dynamic pricing” and “incentive program”

The effect of the above implementation, including the total effect of the measures taken so far, is expected to be “50% of reduction of CO2 from that of the ordinary blocks in Kitakyushu City”.

Figure 1 Field demonstration of community energy management

Project Design

Community Energy Management System (CEMS) is the core of the field demonstration project, and is installed in the Smart Community Center. It communicates with Home Energy Management System (HEMS), Building Energy Management System (BEMS), Factory Energy Management System (FEMS) and Retail Energy Management System (REMS) via AMI (Advanced Metering Infrastructure) including smart meters. These systems and meters make it possible to implement the demand response. Furthermore, the CEMS communicates with distributed power such as solar power, wind power, and fuel cells in the area and controls charging and discharging of a Community-installed Storage Battery System according to power demand and the amount of power generation. At the same time, it induces peak shift and energy conservation by consumers with dynamic pricing that varies the electricity rate according to time of day. BEMS and HEMS control the load such as building equipment, EV charging stations and home appliances on the basis of the dynamic pricing information.

Figure 1 shows an overall configuration of the field demonstration. The field demonstration system is composed of demand side EMS (HEMS/BEMS/ FEMS/REMS), which optimally operates energy from the demand side (home, companies and factory), distributed generations and community-installed battery storage system, which supplies energy to the area, and the CEMS which optimally and comprehensively controls the demand and supply.

Furthermore, an in-home display shows energy information from the CEMS and smart meters are installed for each consumer.


Community energy management system (CEMS)

Table 2 lists the functional items of a community energy management system. CEMS forecasts energy demand and supply for the entire community, formulates a plan to operate cogeneration and electricity storage systems, and delivers dynamic pricing information to smart meters and consumer energy saving systems. Picture below shows the CEMS.

Figure 2. CEMS


Figure 3 Smart meter system configuration

Control of power generation and storage based on energy supply and demand
The stabilization by coordination of large-scale power grid
Understanding of energy usage of each consumers
Demand side management such as consumers’ load control and dynamic pricing, etc.
Connection with energy management systems of consumers and variety of energy equipment in standard procedures
Creation of new services by the visualization of energy usage and the data of CO2

Table2. Community management system functional items


Smart meter system

Figure 3 shows the smart meter system configuration. A smart meter bilaterally communicates with a community energy management system via a concentrator. Communication between the smart meter and the concentrator is established by a wireless mesh. Dynamic pricing information from the CEMS is displayed on anin-home display by a WiFi system through a smart meter to show the effects of energy conservation and load leveling.

Storage batteries installed in the community

Figure 4 shows connection of a community electricity storage system. This system consists of a secondary battery and a smart power conditioning system (PCS). The electricity storage system bilaterally transfers information with the CEMS to level out the load of the community grid and to supply emergency power, maintaining the power quality of the grid with functions such as the instant frequency fluctuation control and voltage control by reactive power.

In concert with solar cells and fuel cells installed in the community, it also autonomously operates to sustain electric power supply to important loads in case of an emergency.



A Building Energy Management System (BEMS) is installed in the office buildings, multi-tenant buildings, commercial facilities, and the hospital. It contributes to the conservation of energy and electric power, manages the effective use of energy in the facility, stabilizes the demand and supply and the quality of electric power by using a heat storage system in a facility that demands a lot of hot water.



Installed in a factory and coordinating with a CEMS, a Factory Energy Management System (FEMS) contributes to conservation of energy and electric power, and effective use of energy in facilities. It stabilizes demand and supply and improves the quality of electric power, by controlling air conditioning, lighting, and batteries in accordance with the demand and supply forecast and price information sent from the CEMS. The FEMS optimizes energy use and operational costs based on the expected amount of energy that can be generated by renewable energy sources, and the fluctuation of the electric power load in the factory, which may stem from the production plan.



A home energy management system (HEMS) is installed in an ordinary household. Coordinating with the CEMS, it realizes the conservation of electric power and leveling out of the load by controlling the air conditioners, electric appliances, and batteries in the household, in response to the request from the CEMS.


Demand side management (design of demand response system)

Demand response in this demonstration project is implemented by using two methods in combination: dynamic pricing (DP) and an incentive program (IP). DP is a method to get responses from consumers by changing the unit price of electric power during peak hours and thus using the unit price as a trigger. There are 3 types of DP systems, as described below:

DP for 2012 was designed based on a system called Critical Peak Pricing (CPP).

  1.  Basic pricing: This pricing system is set at the beginning of a year and feeds into a seasonal hourly unit price pattern, which serves as a basis of the year, based on the past result of demand for and supply of electric power.
  2. Real-time pricing: This pricing system sets the unit price of electric power for the next day by multiplying the unit price of the basic pricing system by a predetermined multiplier which is derived from weather forecasting and other forecasted events such as the amount of energy that will be generatedby renewable energy sources and demand and supply expected on the following day.
  3. Critical peak pricing: This system sets the unit price based on an emergency unit price pattern that is decided in advance for a change in situation that could not be predicted on the day before (such as a significant change in the amount of electric power generated by renewable energy sources or a substantial fluctuation in demand for electric power).

A CEMS forecast of electric power demand and supply is issued a day ahead, along with a table of prices for the next day to consumers’ EMS and smart meters. Based on this price table, the consumers’ EMS formulates and sends an operation plan for the next day to the CEMS, which, in turn, determines the price table for the next day. Figure 4 shows an example of DP demonstration.


Current Status & Results

The following figure shows the 5-year demonstration schedule. At the time of writing this case book, the demonstration project is in its fourth year.

Figure 5 Overall schedule


Design of social demonstration with the Dynamic Pricing

In the summer of 2012, a DP demonstration project was implemented for the first time in Japan. The result of the activities aimed at general consumers is described below. Social demonstration of DP was started with participants in the project divided into several groups, including a group for which the price was changed (treatment group) and a group for which the price was kept unchanged (control group), under the guidance of experts, so that the data gathered could be used for international standards development.

In the first year of the social DP demonstration project, a new, variable critical peak pricing (V-CPP) scheme that set five levels of peak price was devised. The goal was to have residents participating in the project respond to peak prices and to ascertain what price level, if any, is effective, depending on how urgent the demand-supply situation of electric power may be.

In summer, the price for 1 kWh of electricity during peak hours of 13:00 to 17:00 in June through September was set at 15 yen for level 1, 50 yen for level 2, 75 yen for level 3, 100 yen for level 4, and 150 yen for level 5. Consumers were randomly charged between levels 2 (50 yen) and 5 (150 yen) on weekdays when demand for electric power was expected to be high due to temperatures forecasted to rise above 30°C. Residents were notified a day ahead of time as to what the peak price would be.

Figure 6 shows the 5-level pricing table. Note that the basic pricing table shown in Figure 6 was the regular price applied to the control group. In designing this pricing scheme, revenue neutrality was taken into account under the guidance of experts so that the participant residents would not incur any net loss, by limiting the number of days per year when the higher price of level 2 to 5 was charged to a total of 96 days, or 24 days at each level, with the lowest level 1 being charged on the remaining 270 days.


Figure 6 fee table (summer)

Results of social demonstration of dynamic pricing

Levels 2 to 5 were charged 10 days each, a total of 40 days, in the summer of 2012, when the highest temperature exceeded 30°C. The result was within the range of initial planning which predicted that the number of days for the levels 2 to 5 would be maximum 12 days each, totaling 48 days..

Figure 7 shows the load curves at each pricing level of the treatment and control groups. The vertical axis indicates the average electric power consumption (logarithmic value) and the horizontal axis shows the time (from 10:00 to 20:00). As is evident from Figure 7, the power consumption among the treatment group substantially declined during peak hours of 13:00 to 17:00 because level 2 to 5 was applied.

Statistically estimating the result shown in Figure 7 by using a technique of econometric analysis, the electric power consumed by the treatment group during the peak hours decreased as follows:

  • About 9.0% at level 2 (50 yen)
  • About 9.6% at level 3 (75 yen)
  • About 12.6% at level 4 (100 yen)
  • About 13.1% at level 5 (150 yen)

This is a statistically significant decrease.

The peak shaving effect of the treatment group ranged from about 9 to 13%, indicating that the higher the pricing level is, the greater the effect.

The residents who participated in this demonstration project were under TOU (time of use) rates that set a difference in price between the peak time and off-peak time. A field experiment of an hourly rate system conducted in 2011 by the Ministry of Economy, Trade and Industry (METI) of Japan resulted in peak shaving effects of 9.1%. By combining the peak shaving effect of V-CPP in this demonstration project with that of the METI field experiment, the value of the peak shaving effect could increase to about 18 to 22%.

Figure 7. Dynamic pricing demonstration results (summer)


The demonstration planning and results are outlined in the following Figure 8.


DP activation condition: random activation of level 2 to 5 at the highest temperature exceeding 30°C

  • Operation period: June – September
  • Time zone to apply DP: 13:00 ~ 17:00
  • Number of DP activations: maximum 48 times
  • DP notification to the demand side: after 14:00 on the previous day


Lessons Learned & Best Practices

Many residents and companies participated in this program. About 85% of 230 general households and almost 100% of the companies, or 50 companies, in the Higashida district participated in this demonstration project.

The high participation rates were attributed to multiple outreach efforts by city hall explaining the project to business owners and general residents and requesting their participation in the project. City hall efforts went so far as to visit all the offices in the district, thereby making this social system demonstration project, the Kitakyushu Smart Community Creaton Project, significant. It also helped that the project was designed so that the residents and offices did not have to pay any expenses in participating the project, as all expenses were shouldered by the operators of the project (such as companies).

In these experiments, the targeted households have been randomly divided into two groups; “treatment group” (dynamic pricing is applied) and “control group” (dynamic pricing is not applied). This method, which called RCT (Randomized Control Trial), is based on the guideline of DOE (Department of Energy U. S.). Comparing these two groups, it is possible to verify the effect of the demand response with the dynamic pricing.


Method of DP notification

As a demonstration, the price was randomly changed by the DP system but this pricing system needs to be reviewed to implement an actual demand-supply balancing operation for a community as a sustainable business.

In addition, the timing and frequency of price notifications and a method of distributing information, taking easiness to understand into consideration, must also be studied, aside from the review of this pricing system. For example, consumers and general households where an EMS was not installed only had anin-home display (visualization terminal) installed. The display of information such as the frequency, time band, and the method of notification was an important element for these consumers.


Developing the business of EMS

For the demonstration project to grow and expand to an actual business, it is necessary to find economic advantages of the installation of an EMS and batteries, using various economic indexes and taking into account of the consumer burden of paying for the installation. To this end, various market incentives must be studied by the operators of the demonstration project and potential political assistance measures must be studied by the government. That effort will lead to the wider use of the equipment and related systems, as well as the expansion of their markets.


Role of CEMS and further study

A CEMS, which can play a pivotal role in community energy supply business, is regarded as an interface between a large-scale power generation facility and consumers, playing a role of adjusting demand and supply of energy in the community. It monitors the electric power generation and transmission in the community, and consumption by consumers, and stabilizes demand and supply in the community in concert with the large-scale power generation facility.

To adjust demand and supply, the demand side should be controlled by using DR techniques such as DP and IP and, at the same time, inexpensive and stable electric power should be supplied to the community by effectively using the renewable energy source in the community and purchasing electric power from the market in negawatt transactions. In addition to controlling the demand and supply of electric power, CEMS also provides and accumulates information on the energy use by the consumers. That can create added values for the demand side, because such information should be helpful in exploring the possibility of new business development.

Further detailed study is considered necessary, based on the result of the demonstration, to fully deploy this approach over a wide area.


Key Regulations, Legislation & Guidelines

Government subsidy support: The smart community trial project was considered as one of the energy policies of the Japanese government and as such two-thirds of the expenses for the project were covered by a subsidy from the government from the Next Generation Energy and Social System Demonstration fund. In addition, the government agreed to provide assistance for up to five years.

The total subsidiary from the Ministry of Economy, Trade and Industry in 2013 for Kitakyushu and other regions was about 8.6 billion yen.

This alleviated the financial burden of businesses participating in the trial project and contributed to accelerate the smooth dissemination of these relevant technologies. In this context, this government assistance was quite useful.

For the trial project in Kitakyushu, the “Kitakyushu Smart Community Council” was established by mainly the city of Kitakyushu, which played the central role in deliberating the basic policy and the content of the project and in implementing it.

It is considered that a cooperative system was created because many companies and organizations participated in the project and because the city government played the central role, acting as a go-between for the local residents and companies.


Next Steps

Expanding the result of the Kitakyushu Smart Community Project at home and abroad is being promoted. In particular, expansion to foreign countries requires establishment of close relation between the government, municipalities, and public organizations in those countries.

It is considered important to proceed with expansion in cooperation with not only Japanese companies but also the Japanese government and related organizations.

A CEMS adjusts energy supply and demand in a region and involves negawatt transaction. It is hoped that the domestic transaction market is further vitalized by an increase in the amount of electric power supplied and consumed.

It is expected that the above is supported by electricity liberalization promoted by a report of the Expert Committee on the Electricity System Reform that was commissioned by the government, advent of PPS (Power producer and supplier)operators, and increases in negawatt transactions.


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