Mitsubishi Heavy Industries Technical Review Vol. 60 No. 3 (September 2023)
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Carbon Neutral Solutions to Increase the Value of
Independent Power Generation Facility

RYO IKEDA*1

TETSUYA TANAKA*2

YUJI NAMEKI*2

HIRONORI SUGAWARA*3

RYO NISHIDA*3

YUYA YAMAMOTO*4

In recent years, as the efforts toward becoming carbon neutrality made by various industries
in Japan and other countries are getting more active, there is a growing need for carbon neutrality
in privately owned and operated power generation systems as well. Having domestically supplied
many independent power generation facilities, Mitsubishi Heavy Industries, Ltd. (MHI) offers
carbon neutral solutions for these facilities by making full use of our related technologies,
products and services. In this report, we propose two carbon neutral approaches for independent
power generation facilities: (1) energy balance diagnosis and improvement from a facility point ofview, and (2) finding a solution to the needs (pain points) pertaining to the independent power
generation facilities, for example, in relation to operators or work processes. Specific examples ofthese two approaches are also presented. Depending on the medium- and long-term business goals
and needs of our customers, we will provide valuable carbon neutral solutions that are tailored toeach independent power generation facility.

|1. Introduction
In Japan, many of the factories in industries such as petrochemicals, papermaking, iron andsteel-making, and cement are equipped with an independent power generation facility whereinboilers, steam turbines and gas turbines function as the major units. Such facility supplies, as acogeneration system, electricity and heat (e.g., steam) to the production facility side. Over theyears, we, the manufacturer, together with our customers (that is, the user), have worked on
reducing the generation of CO2 through improving efficiency and energy conservation byeffectively utilizing waste heat, by-product fuel and such like. With recent acceleration andincrease of the social demand for carbon neutrality, further reduction of CO2 generation is required.
When supplying heat to the production facility side, a large quantity of high-temperature andhigh-pressure heat (e.g., steam) is required in many cases. However, the means of supply are often
limited to fossil fuel-fired boilers, which is the major bottleneck in the reduction of CO2 emissions.
On the other hand, from the viewpoint of the recent energy crunch and energy security awareness,
people are becoming aware once again of the necessity and importance of independent power
generation facilities. The importance of effectively using these facilities and achievement of carbon
neutrality is thus increasing.
MHI has not only an installation record of many independent power generation facilities inJapan, but also the latest technologies, products and services, and extensive expertise in power
generation and heat supply, for achievement of carbon neutrality. By making use of suchtechnologies and expertise, we provide “Carbon neutral solutions” that help customers to achievecarbon neutrality of their independent power generation facilities.
*1

Project Engineering Department, Steam Power Maintenance Innovation Business Division, Energy Systems, Mitsubishi*2

Senior Engineer, Project Engineering Department, Steam Power Maintenance Innovation Business Division, Energy Systems,*3

Chief Staff Engineer, Energy Transition Department, Energy Systems, Mitsubishi Heavy Industries, Ltd.

*4

Energy Transition Department, Energy Systems, Mitsubishi Heavy Industries, Ltd.

Heavy Industries, Ltd.
Mitsubishi Heavy Industries, Ltd.

Mitsubishi Heavy Industries Technical Review Vol. 60 No. 3 (September 2023)
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In this report, we propose two approaches as carbon neutral solutions. The first is “energybalance diagnosis and improvement”, which focuses on the facility itself. In an independent power
generation facility, the major input factors are the fuel used and the electricity purchased, while theoutput is the amount of electricity generated (which is self-consumed or sold) and the amount ofheat supplied (the amount of steam sent). The energy balance of this first approach refers to theoverall picture indicators of a plant (charts and numerical data) including the efficiency, economy
and environmental performance，and the supply ratio of electricity to heat (i.e. thermoelectric ratio)
in an independent power generation facility with the aforementioned input/output factors. The
second approach is to “find a solution to the needs (pain points) pertaining to the independent
power generation facilities”, which focuses on the issues related to the facility operation such as theoperators (manpower and passing of technical skills), work processes, and improvement of
profitability (Figure 1).

Figure 1 Overall picture of carbon neutral solutions|2. Energy balance diagnosis and improvement
As the global market environment, market needs change and the passage of years from theinstallation of an independent power generation facility, changes also take place in theelectricity/heat demand on the facility, the operating load, required CO2 reduction, and theapplicable technologies that enable meeting these requirements. Facing such challenges, we
propose the approach of “energy balance diagnosis and improvement”. This will proceed byrepeatedly holding meetings with customers to understand the situation and extract the problems,
followed by creating short-, medium- and long-term achievement of carbon neutrality road maps,
estimating the operating cost, initial cost and the amount of CO2 generation, and eventually making
a proposal for achievement of future carbon neutrality (Figure 2).

Figure 2

Flow chart of solution proposal and example of road map

Mitsubishi Heavy Industries Technical Review Vol. 60 No. 3 (September 2023)
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2.1
(1)

Adjust the energy balance

Energy balance adjustment by small-scale investment
Toward achievement of carbon neutrality of an independent power generation facility, inorder to obtain the outcomes in a stable manner within a relatively short period of time with aminimum initial investment (that is, resulting in the improved efficiency and the optimized
purchase/sale of electricity), the options to consider are upgrading (revamping) of equipment,
and small-scale introduction of new units. Specifically, the former includes recovering
performance deterioration, by aging, reviewing to suit current electricity/heat demand anduprating by means of partially applying the latest technologies. For the latter option, therecommended units to introduce are high-efficiency equipment such as a gas engine, ORC(Organic Rankine Cycle) and heat pump (Figure 3). The use of such equipment can be
expected to contribute to ramping up the power output and energy conservation by a range ofseveral hundred kW to several MW (for the characteristics and development status of eachpiece of equipment, see the relevant reports in this energy system special edition(1)). These
proposals have, in contrast to those described later, the advantage of being relatively unaffectedby the restrictions such as the availability of fuel or site and causing less impact on the overall
thermoelectric ratio. However, there is also a possibility that these measures may only beeffective for a short while. It is therefore critical to formulate measures and road maps from acomprehensive perspective with a medium-to-long time span, in order to make the investment
continue to be effective with a vision toward the goal (achievement of carbon neutrality). We
help customers study and plan the steps toward achievement of carbon neutrality from both
short and medium-to-long perspectives.
(2) Improvement of operational efficiency and CO2 reduction: energy management
The energy-saving measures implemented in each unit of the independent power
generation facility are already at advanced levels in Japan. However, we consider that there is
still room for further energy conservation, because the individual units to supply energy such as
electricity and steam are handled separately. That is to say, in other words, with the overall
optimization including multiple energy supply units being considered, the energy demandrequired for the production processes in a factory can be fulfilled in such a way as to be
optimized over the course of time according to the daily fluctuations of energy demand. Thereis a growing need for energy management at the production site in which complicated processes
are executed against a dynamically changing external environment. The use of the energy
management guidance provided us makes it possible to maximize the economic effect, because
it enables, for example, the load distribution among the energy supply units to be determinedbased on the factory’s electricity or steam demand that fluctuates daily, as well as fuelprocurement and the prices for buying/selling electricity.
Let us suppose an independent power generation facility in which the units such as theboiler, gas turbine, condensing extraction turbine, and back pressure turbine are incorporated.
Their rated outputs, minimum loads, and efficiencies are all different, with each using a
different type of fuel such as heavy oil, coal and by-product fuel. Based on the production planvariable on a daily basis, this independent power generation facility is to supply electricity andlow-, medium- and high-pressure steam to production processes that are in need of it, and, if
electricity shortage occurs, electricity is purchased from the spot market. To examine which
unit should be operated at what load in order to achieve the best economy, it is required toconsider not only the amount of by-product fuel to be fed, and the prices for fuels orbuying/selling electricity, but also the applicable range of load on each unit, and how the unit
efficiency can be changed by the load applied. Finding the right answer to these questions must
be difficult, unless you are an engineer with years of experience. With our energy management
guidance, however, these questions can be handled in the form of mathematical expressions
such as objective functions and constraint conditions for mathematical optimization algorithms,
leading to the optimal solution. The obtained result is presented as the “optimal operating
conditions”. The optimal load distribution is simulated considering the changing demand, fuelprices and such as the variable factors. This enables the achievement of further energy
conservation and operation optimization, while minimizing the losses caused by supply andMitsubishi Heavy Industries Technical Review Vol. 60 No. 3 (September 2023)
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demand mismatch including the loss by steam released into the air, and the procurement cost tocompensate for the shortfall of electricity.
Other actively ongoing projects in recent years are the introduction of solar power
generation facilities and battery storage systems, and wheeling of electricity in which power
generated by an independent power generation facility is transmitted to multiple geographically
remote sites through existing distribution or transmission networks. In this case, the factors toconsider for energy management become more complicated because of the additional
conditions such as weather and power demand at remote sites. To handle such needs, we areaccelerating our efforts to make it possible to offer the Energy Management System (EMS)
enabling optimal load distribution among the independent power generation facility units in atimely manner by connecting our proprietary intelligent solution TOMONI®.

Figure 3

2.2

Example of adjusting the energy balance

Rearrange the energy balance

In order for large-scale effects (such as efficiency improvement and CO2 reduction) tocontinue over a medium and long period of time (say, until 2040 or 2050) in the process of the
independent power generation facility achieving carbon neutrality, the options to consider are
converting the fuel type for use in the units, or addition/replacing of the main unit. For example, inthe case of boilers, a coal or heavy oil-fired unit can convert its fuel to other types such as natural
gas and town gas. If it is a coal-fired unit, biomass can in part or fully replace coal. If the
independent power generation facility is mainly comprised of boiler units, replacing some of themby gas turbine cogeneration units is also effective. In this case, however, it is worthy of note thatthe resulting thermoelectric ratio of the gas turbine unit may differ considerably from the previous
unit consisting of boiler and steam turbine. As the independent power generation system isbasically operated to meet the heat demand (steam demand is given priority), the introduction of agas turbine often allows more electricity to be generated than the pre-introduction level. Although
the surplus can be sold, this sometimes works unfavorably from the viewpoint of system constraint
or economic effect. Therefore, it is important to optimize the combination of units by considering
the overall energy balance. Figure 4 shows a successful example in terms of the following two
outcomes: the CO2 reducing effect by converting the fuel type in use for the boiler and introducing
a gas turbine cogeneration unit, and the thermoelectric ratio remaining the same at a low cost byremodeling the condensing steam turbine into the back-pressure type (old foundation structures andcasing are used as they are). Furthermore, the reduction in the heat loss due to condensation
enhances the overall efficiency, thereby improving the economy as well as realizing further CO2
reduction.

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Figure 4

2.3

Example of rearranging the energy balance

Toward achievement of carbon neutrality in 2050

Toward realizing achievement of carbon neutrality, MHI is diligently developing
technologies that enable achievement of carbon neutrality of the equipment such as the boiler, gas
turbine and gas engine (which means to make it possible to switch to carbon neutral fuel in the
future). Although there are some issues in terms of the availability of carbon neutral fuel such ashydrogen and ammonia (procurable quantity, security, price, etc.), our proposals are tailored toeach of the independent power generation facilities of our customers based on their medium- andlong-term goals, future fuel procurement preference (affinity with their main businesses) and such
(Figure 5).
Given the uncertainty regarding future trends in the development of carbon neutral fuelinfrastructure and energy policies among others, it is necessary to make facility investment while
keeping the options open. We are therefore developing a gas turbine that will be adaptable to firingof either hydrogen or ammonia. Another possibility is the addition of MHI Group’s CO2 capture
equipment to the independent power generation facility, with the expectation that CO2 capture andstorage and its application technologies will become more common. In addition to achievingcarbon neutral fuel for independent power generation facility, the CO2 capture equipment is added,
the facility itself becomes carbon negative. This can be an effective measure toward achievingcarbon neutrality by 2050, extensively including the customer’s process side (main business). (Forthe development status of each piece of equipment, see the relevant reports in this energy system
special edition(1)).

Figure 5

Example measures to achieve carbon neutrality

Mitsubishi Heavy Industries Technical Review Vol. 60 No. 3 (September 2023)
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power generation facilities
In achieving the optimization or carbon neutrality of independent power generation facilities,
there are also various challenges in addition to the aforementioned facility improvement.
For example, some customers need to start with the “visualization” of current operation
status, because the balance between supply and demand for energy (electricity or heat/steam) as autility is not clear. In others, the project has been brought to a standstill because of the shortage of
project personnel and financial resources, despite the need to examine and find a solution to the
problem. To solve these pain points, we believe that the key lies in our ability to find a fine-tuned
solution for customers by putting ourselves in their shoes. Presented below are the examples ofsuch solutions including independent power generation facility asset management, digital tools andutilization of surplus electricity through the capacity market.

3.1

Asset management for independent power generation facility (an ESCO
approach)

The term ESCO originally stands for Energy Service Company. It is a business operator thathelps customers to reduce energy consumption or lighting/heating/water utility expenses, andshares the benefits with customers. Specifically, the services are a combination of the following(according to the website of the Japan Association of Energy Service Companies):(1) Energy-saving proposals based on the energy-saving diagnosis(2) Energy-saving design and construction for the implementation of proposals(3) Operation and maintenance management of energy-saving equipment(4) Energy supply-related services(5) Arrangement of business funds(6) Guarantee for energy-saving effect(7) Measurement and verification of energy-saving effects(8) Proposals for improvement based on measurement and verification
While these services are mainly directed at commercial or industrial equipment, it is very
difficult and takes time to provide these services for the entire independent power generation
facility for industrial purposes whose system configuration is large-scale and complicated.
However, we believe that an ESCO approach is vital in terms of setting out a proposal from astandpoint much closer to customers, instead of following the protocol as a system supplier. That is
to say, we must stand by customers and, together with them, create a solution proposal and offer
services for it.
As an example, our asset management service is described below.
In the above list of services, this service of ours is primarily related to some part of (3)Operation and maintenance management of energy-saving equipment. Until now, when something
went wrong in the facilities of customers, they consulted us after they became aware of the
problem. This is just like our visiting a primary care doctor every time we feel sick or come downwith a disease. Depending on the conditions, immediate hospitalization or emergency surgery may
be required. This means that the customers’ facilities may also be subjected to long-termsuspension of operation for large-scale repair. On the other hand, our new service aims to realize
the stable execution of production processes by monitoring the system conditions of the
independent power generation facility together with customers and proposing necessary measuresin a timely manner to avoid the occurrence of failure or address a problem when it is still minor. As
shown in Figure 6, instead of being a “primary care doctor,” we want to be and will be a “escort
runner” who accompanies the runner (that is, the customer) all the way toward their goal.

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Figure 6

3.2

From primary care doctor to escort runner

Digital tools: Basic Package (TOMONI facility maintenance support)

In order to address the challenges in business management facing the on-site workers who
perform system maintenance, such as labor shortages, aging facilities and declining on-site
capabilities, many sites are exploring how DX (Digital Transformation) or smartification can bepromoted. The Japanese Ministry of Economy, Trade and Industry is strongly backing up theirefforts to overcome these challenges by introducing new digital technologies such as IoT (Internetof Things), AI (Artificial Intelligence) and drones, and the adoption of “smart industrial safety” forthe simultaneous realization of maintenance/improvement of industrial safety and productivity inthe future. Furthermore, toward achieving carbon neutrality, digital capabilities will become moreindispensable than ever for coping with the shift to carbon neutral fuel such as hydrogen andammonia, introducing new equipment and enabling a control system to manage such new
equipment in a complex and organic manner.
MHI has launched the “Smart Maintenance” initiative, which aims to bring about arevolution in maintenance by digitalization. Specifically, our goal is to improve the efficiency andquality of maintenance by means of digitizing, accumulating and visualizing useful maintenancedata and performing advanced analysis. The tasks to be made smart include daily maintenanceroutines, regular inspection procedures, facility maintenance (i.e., detection of abnormal signs andperformance monitoring) and digital support tools for individual sites. As one of the digital tools toprovide such smart maintenance, we offer the following “TOMONI Basic Package” (Figure 7).
<TOMONI Basic Package>(1) Maintenance planner: to support a wide range of maintenance processes including
management of maintenance history and work planning(2) Smart search: to easily search technical materials and documents(3) TOMONI bulletin board: a communication tool with the manufacturer’s engineers(4) TOMONI blog: brief explanations about technical term, technical information, industry
news, etc.
This package was designed under the concept of “hassle-free and ready-to-use”. Whencustomers receive this system product, the necessary data related to the documents that we haveprovided (e.g., drawings and technological correspondence) and the maintenance/technicalinformation have already been input in the system (i.e., provided as built-in system data).
Therefore, customers can start using the product on the very day of the receipt without requiring thework and time for data entry. We have received favorable comments from TOMONI user
customers, especially from the viewpoint of training, labor saving and communication. Given theissue of labor shortages in recent years, we also offer maintenance tools that cover a wider range ofservices by combining the digital solutions with the asset management service described in Section
3.1.

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Figure 7

3.3

Maintenance revolution with digitization: Smart MaintenanceUtilization of surplus electricity through the capacity market

As described so far, we have strived to contribute to customers’ businesses through provisionof safe and high-efficiency power generation facilities and their maintenance, placing importanceon (1) stability, (2) economy and (3) environmental performance. On the other hand, the challenges
in electric power business are changing considerably because of the electricity system reform.
Especially the capacity market, which has been created to secure the electricity supply capacity, isclosely related to independent power generation facilities. This market requires to utilize surplus
electricity from independent power generation systems and unused facilities.
Recognizing the importance of the solicitation of balancing capacity (Generator I’), which isthe precursor of the capacity market, MHI took part as an aggregator and, at the same time, as aconsumer for our factories. Thus, utilizing this experience of a dual role as an aggregator and a
consumer, we have also participated in the capacity market (demand resource) as anaggregate-cum-consumer.
Figure 8 shows the scheme of the capacity market and the flow chart of requesting thedemand response. The Demand Response Aggregation System (DRAS) is a system tocommunicate with electric power companies (electricity transmission and distribution). Whenbalancing power is called for, DRAS receives the request from the Organization for Cross-regional
Coordination of Transmission Operators, Japan (OCCTO) through the power grid, thereby
connecting directly to customers (consumers). This enables the response to be made in a timely
manner.
In the case of participating in the capacity market, it is important to set the optimal power
supply capacity. The more electricity you can supply on request for balancing power, the more
reward you will receive and the more you can contribute to easing the power crunch. However, if
you fail to supply as much electricity as you have set, the reward may be reduced. Based on the
know-how and experience as a facility manufacturer, we can assess and propose the optimal power
supply capacity by analyzing the data such as the operating conditions of the independent power
generation facility and the factory’s electricity/heat (steam) demand and estimating the probabilityof success/failure. In the process of achieving carbon neutrality, the environment surrounding
independent power generation facilities is also expected to change considerably. We will cope withsuch change in a timely manner and contribute to the businesses of our customers, power
supply/demand stabilization and resilience.

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Figure 8 Capacity market scheme and flow chart requesting balancing power|4. Conclusion
This report presents our carbon neutral solutions from two approaches: “energy balance
diagnosis and improvement” and “finding a solution to the needs (pain points) pertaining to
independent power generation facilities”. Based on the medium- and long-term business goals andneeds of our customers, we will continue to propose a customized and valuable carbon neutral
solution tailored to each independent power generation facility by putting ourselves in their shoes,
consequently looking to succeed in making these facilities operable over a long period of time in asustainable manner.
TOMONI® is a registered trademark of Mitsubishi Heavy Industries, Ltd. in Japan and othercountries.

References
(1)

(2)
(3)

Technical Review Special Edition: Energy System, Mitsubishi Heavy Industries Technical Review Vol.60
No.3 (2023)
https://www.mhi.co.jp/technology/review/jp/indexj-60-3.html
Yusuke Isobe et. al, Technology Development of Energy Management System, Beneficial for Carbon
Neutral Era, Mitsubishi Heavy Industries Technical Review Vol. 59 No. 4 (2022)
Yukiko Agata et, al, Intelligent Solution TOMONI® for Advanced Maintenance and Operation of Critical
Infrastructure，Mitsubishi Heavy Industries Technical Review Vol. 59 No. 3 (2022)