**6.4. Project cost calculations and investigation of the business plan**

Various quantities, such as expenses and revenues related to the commercialization of this system, were included in the calculations. Because most of the initial costs were covered by a subsidy, the investigation focused on the operational costs. The two scenarios that were considered in the calculation of business income and expenditures are as shown in **Figure 13**.


We have performed a detailed cost evaluation to support the local government. However, as an energy company is now going to be established, the business income and expenditure are not openly available as official information from the local government. Therefore, the quantitative

**Figure 11.** Results of the energy simulation (operation status in the summer season for each standard scenario).

**] Electricity Cooling Heating Hot water**

http://dx.doi.org/10.5772/intechopen.75129

115

**[MWh/year] [GJ/year]**

Introduction of Low-Carbon Community Energy Systems by Combining Information Networks…

Sports facility 3000 80 — — — Hotel 4770 873 1746 954 2003 Hot bath facility 1400 168 325 333 893 Community center 1800 113 693 468 — Incubation square 610 70 180 34 — Total 11,580 1304 2944 1789 2896

**Facility Total floor area [m<sup>2</sup>**

**Table 6.** Annual energy demand (early phase 2).

Agricultural plant Tourist farm

**Table 5.** Annual energy demand (early phase 1).

Introduction of Low-Carbon Community Energy Systems by Combining Information Networks… http://dx.doi.org/10.5772/intechopen.75129 115


**Table 6.** Annual energy demand (early phase 2).

The calculated results are shown in **Figure 11**.

**Facility Total floor area [m<sup>2</sup>**

114 Sustainable Air Conditioning Systems

conditions after all facilities are operational. For comparison, CO2

**6.4. Project cost calculations and investigation of the business plan**

emissions were calculated based on the simulated energy consumption under standard

reduction of about 20% can be expected by introducing the commu-

**] Electricity Cooling Heating Hot water**

**[MWh/year] [GJ/year]**

**] Electricity Cooling Heating Hot water**

**[MWh/year] [GJ/year]**

for a case in which conventional systems were introduced in the individual buildings. The

Agricultural plant 9000 81 — 2880 — Tourist farm 1200 138 354 67 — Sports facility 3000 80 — — — Hotel 4770 873 1746 954 2003 Hot bath facility 1400 168 325 333 893 Community center 1800 113 693 468 — Incubation square 610 70 180 34 — Total 21,780 1523 3298 4737 2896

Various quantities, such as expenses and revenues related to the commercialization of this system, were included in the calculations. Because most of the initial costs were covered by a subsidy, the investigation focused on the operational costs. The two scenarios that were considered in the calculation of business income and expenditures are as shown in **Figure 13**.

Hotel 4770 873 1746 954 2003 Hot bath facility 1400 168 325 333 893

Total 6170 1041 2071 1287 2896

emissions were calculated

CO2

results show that a CO2

Agricultural plant Tourist farm Sports facility

Community center Incubation square

nity energy system (**Figure 12**).

**Facility Total floor area [m<sup>2</sup>**

**Table 5.** Annual energy demand (early phase 1).

**Table 4.** Annual energy demand (standard).

**Figure 11.** Results of the energy simulation (operation status in the summer season for each standard scenario).

We have performed a detailed cost evaluation to support the local government. However, as an energy company is now going to be established, the business income and expenditure are not openly available as official information from the local government. Therefore, the quantitative evaluation result shown here is not official information but is our individual research result. In this evaluation, although the costs are set realistically, the introduction scenario is given hypothetically. The costs of sales, such as electricity costs, natural gas costs, water and sewage

costs, CGS/heat source maintenance costs, consumable part costs, equipment repair costs, CEMS/home energy management system (HEMS) operation costs, personnel costs, and busi-

Introduction of Low-Carbon Community Energy Systems by Combining Information Networks…

http://dx.doi.org/10.5772/intechopen.75129

117

The result of the evaluation is shown in **Figure 14**. Based on the above scenarios, it can be concluded that the viability of this business depends on whether the opening of the agricultural production facility/tourist farm is delayed or not. In addition, since around 60% of the sales revenue comes from the hotel/bath facilities, it can be deduced that stable operation of these facilities is crucial. At this stage, it is essential to hold meetings with the managers of the hotel and bath facilities to examine their demands and obtain appropriate estimates of future

As shown by the results, in the standard scenario (Scenario 1), the business is expected to yield an operating profit after the second year, and the business is stable and performing well. In the scenario in which the opening of the agricultural production facility and tourist farm is delayed (Scenario 2), the business will post a loss for the first several years but will yield a profit after the agricultural production facilities open. The business is expected to recover the losses in the seventh year, in 2024. Therefore, it is necessary to obtain additional information from the city regarding the opening of the agricultural facility and tourist farm, including business details and the energy demand of the hotel and bath facility. The impact of such information on

ness operation costs, were calculated based on the scenarios.

**Figure 14.** Estimation of business earnings and expenses.

requirements.

**Figure 12.** Estimation of the CO2 emissions for each system.


**Figure 13.** Investigated scenario settings and considerations regarding estimations of operation periods.

costs, CGS/heat source maintenance costs, consumable part costs, equipment repair costs, CEMS/home energy management system (HEMS) operation costs, personnel costs, and business operation costs, were calculated based on the scenarios.

evaluation result shown here is not official information but is our individual research result. In this evaluation, although the costs are set realistically, the introduction scenario is given hypothetically. The costs of sales, such as electricity costs, natural gas costs, water and sewage

**Figure 12.** Estimation of the CO2

116 Sustainable Air Conditioning Systems

emissions for each system.

**Figure 13.** Investigated scenario settings and considerations regarding estimations of operation periods.

The result of the evaluation is shown in **Figure 14**. Based on the above scenarios, it can be concluded that the viability of this business depends on whether the opening of the agricultural production facility/tourist farm is delayed or not. In addition, since around 60% of the sales revenue comes from the hotel/bath facilities, it can be deduced that stable operation of these facilities is crucial. At this stage, it is essential to hold meetings with the managers of the hotel and bath facilities to examine their demands and obtain appropriate estimates of future requirements.

As shown by the results, in the standard scenario (Scenario 1), the business is expected to yield an operating profit after the second year, and the business is stable and performing well. In the scenario in which the opening of the agricultural production facility and tourist farm is delayed (Scenario 2), the business will post a loss for the first several years but will yield a profit after the agricultural production facilities open. The business is expected to recover the losses in the seventh year, in 2024. Therefore, it is necessary to obtain additional information from the city regarding the opening of the agricultural facility and tourist farm, including business details and the energy demand of the hotel and bath facility. The impact of such information on

**Figure 14.** Estimation of business earnings and expenses.

businesses, which is the subject of the city's call for submissions, will have to be investigated. It is also necessary to consider adjusting the heating and electricity charges as needed.

**Author details**

Makoto Ooba

**References**

2017]

2017]

Yujiro Hirano\*, Shogo Nakamura, Kei Gomi, Takuya Togawa, Tsuyoshi Fujita and

[1] National Institute for Environmental Studies. 2050 Low-Carbon Society Scenario [Internet]. Available from: http://2050.nies.go.jp/LCS/eng/japan.html [Accessed: July 30,

Introduction of Low-Carbon Community Energy Systems by Combining Information Networks…

http://dx.doi.org/10.5772/intechopen.75129

119

[2] "2050 Japan Low-Carbon Society" scenario team. Japan Scenarios and Actions towards Low-Carbon Societies (LCSs) [Internet]. Available from: http://2050.nies.go.jp/report/ file/lcs\_japan/2050\_LCS\_Scenarios\_Actions\_English\_080715.pdf [Accessed: August 12,

[3] "2050 Japan Low-Carbon Society" Scenario Team. Japan Roadmaps towards Low-Carbon Societies (LCSs) [Internet]. Available from: http://2050.nies.go.jp/report/file/lcs\_japan/

[4] Murakami S, Levine M D, Yoshino H, Inoue T, Ikaga T, Shimoda Y, Miura Y, Sera T, Nishio M. Sakamoto Y, Fujisaki W. Energy Consumption, Efficiency, Conservation, and Greenhouse Gas Mitigation in Japan's Building Sector. Institute for Building Environment

[5] Murakami S, Levine MD, Yoshino H, Inoue T, Ikaga T, Shimoda Y, Miura S, Sera T, Nishio M, Sakamoto Y, Fujisaki W. Overview of energy consumption and GHG mitigation technologies in the building sector of Japan. Energy Efficiency. 2009;**2**:179-194 [6] Hirano Y, Fujita T, Bunya S, Inoue T. Examination of how various measures in urban districts affect the development of low carbon cities - a case study of cooling energy savings in the city of Kawasaki. Environmental Science (in Japanese). 2011;**24**(4):255-268 [7] Hirano Y, Gomi K, Nakamura S, Yoshida Y, Narumi D, Fujita T. Analysis of the impact of regional temperature pattern on the energy consumption in the commercial sector in Japan. Energy and Buildings. 2017;**149**:160-170. DOI: 10.1016/j.enbuild.2017.05.054 [8] Hirano Y, Fujita T.Analysis of effects of climatic conditions on energy consumption in office buildings. Journal of Japan Society of Civil Engineers, Ser.G(Environmental Research)

ing load in an urban area. Energy and Buildings. 2016;**114**:87-95. DOI: 10.1016/j.enbuild.

[10] Komiyama R, Fujii Y. Analysis of Japan's long-term energy outlook considering massive deployment of variable renewable energy under nuclear energy scenario. Electrical

reduction caused by decreasing the air condition-

\*Address all correspondence to: yhirano@nies.go.jp

National Institute for Environmental Studies, Tsukuba, Japan

20090814\_japanroadmap\_e.pdf [Accessed: August 12, 2017]

and Energy Conservation (IBEC); 2006. 84 p

(in Japanese). 2011;**67**(5):I\_103-I\_111 [9] Hirano Y, Fujita T. Simulating the CO<sup>2</sup>

Engineering in Japan. 2012;**132-B**(9):780-792

2015.06.033
