Solar Power Plant Welcomed as New City Landmark
Aim to build close ties with local community by setting up visitor facility
Sanyo-Onoda City, Yamaguchi Prefecture, is the place where Japan's first cement manufacturer, Onoda Cement (present Taiheiyo Cement), originated. Still now, a number of firms related to heavy chemical industries such as ceramics, chemicals and oil, including the Taiheiyo Cement Group, operate in the city. However, some sites have been left idle by their owner companies as they could not be developed amid the drastic changes in the economy.
Adjoining soccer pitch
There is such an area along the coast, about a 30-minute walk from the city center. It is a 16ha industrial site owned by Taiheiyo Cement. At present, the site is covered with photovoltaic (PV) panels, some still being constructed. A mega solar (large-scale PV power plant) project to output approximately 13MW is slated to launch at the end of November 2013. The mega solar area will be part of an industrial site called "Higashioki Factory Park." Planted on the green space on the park's inland side are evergreen broadleaf oak trees.
The park is also provided with recreation facilities including tennis courts and a soccer pitch as well as a shopping center across the street. Walking around in the woods, which gradually get higher, in the green space, you can glimpse the solar panels spread across the site from between the trees. Most mega solar projects are usually away from the public eye. The mega solar project in Higashioki Factory Park, however, is characterized by its location accessible to citizens.
Leasing the land from Taiheiyo Cement and running the mega solar project is Mitsui Fudosan. Consulting with Taiheiyo Cement, which was looking for effective ways to use its idle land in Sanyo-Onoda City, Mitsui Fudosan proposed the mega solar project.
Formulating effective use of corporate real estate (CRE) is dubbed "CRE strategy," which, these days, is considered a major challenge in corporate management. Supporting enterprises' CRE strategy as developers, leading real estate companies are offering various solutions in accordance with the locations. Mega solar is one of the solutions.
"We are not intending to develop our business across Japan only for the mega solar business itself," said Kei Yamauchi, Business Planning Group leader, Office Building Project Planning Dept., Mitsui Fudosan. "We consider mega solar projects as one of the new CRE strategy solutions like 'LaLaPort Project' to manage retail facilities."
With these circumstances in mind, Mitsui Fudosan decided to get directly involved in the mega solar project without establishing a separate project company. As for investment costs, Mitsui Fudosan did not employ the "project finance" method, which requires financial institutions to finance the project itself.
"Mitsui Fudosan aimed to make the landowner company feel safe by taking responsibility for both human and financial aspects and approaching the mega solar project from the perspective of the landowner," Yamauchi said.
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Donating visitor facility to adjoining park
By not deploying the project finance method, the significance of minimizing the long-term risk of the mega solar project and securing solid project revenue for 20 years has not changed. From that viewpoint, Toko Electrical Construction, an experienced mega solar constructor, was chosen as the EPC contractor to handle engineering, procurement and construction.
With the focus on past results, Japanese manufacturers' products were adopted for major components. The solar panels, power conditioning subsystem (PCS) and mounts are manufactured by Toshiba, Toshiba Mitsubishi-Electric Industrial Systems (TMEIC) and Nisso Pronity, respectively.
To monitor and maintain the operation after launch, Mitsui Fudosan signed a maintenance contract with the Toko Electrical Construction Group while building up a monitoring system in one of its Tokyo offices. They are considering securing maintenance staff with easy access to the site if a malfunction is detected.
Mitsui Fudosan bought insurance policies from insurance companies against disaster risks.
"There was no insurance company that agreed to cover earthquake, tsunami and high tide risks," Yamauchi said. "Although we believe these risks are not high at Higashioki Factory Park, we might give up on the mega solar option if we have to support effective use of CRE in regions likely to be seriously damaged by a major earthquake in the Tokai region, for example."
One of the features of the mega solar power plant being constructed in Higashioki Factory Park is its easy-to-see open location adjoining a green park where people can rest and play. To make use of this feature, since the project was first introduced, Sanyo-Onoda City has requested that Mitsui Fudosan develop a visitor facility where people can study mega solar on a daily basis, with a view to helping environmental education.
However, mega solar facilities, which are power plants housing high-voltage electric reception and substation equipment, have to be fenced off as a rule so people cannot easily get inside the facility. And the visitor facility cannot be used on a daily basis even if it is built inside the site. So, Mitsui Fudosan proposed building an observation deck in the adjoining green park and donating it to Sanyo-Onoda City. Because the panels are about 1.5m high after being inclined at an angle of 10 degrees when mounted, the overall mega solar power plant can only be viewed from a certain height.
"We are very grateful for the offer to donate a barrier-free visitor facility," said Nobuyuki Kido, head of the Corporate Construction Promotion Office, Industrial Construction Department, Sanyo-Onoda City. "We would like to advertise the facility so the mega solar plant can be visited by a lot of people. We do not have a municipal subsidy for mega solar construction but promised to help the project by, among other measures, trimming the trees in the park so they would not shade the solar panels with their branches and leaves."
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Project included in an "industrial sightseeing tour"
In fact, the construction of a mega solar power plant in the industrial site is a mixed blessing for the local municipal government. At the moment, increasing employment opportunities is one of the most important challenges for municipal governments. Developing industrial sites and inviting companies to the sites can be a key factor to meet this challenge. Although mega solar projects generate little new employment, no additional plants can be constructed for 20 years while the power generation business is ongoing. If the sites continue to be idle, however, the mega solar construction would benefit the government due to the fixed asset tax.
Sanyo-Onoda Municipal Government is not expecting large-scale new employment thanks to the mega solar project but is planning to turn it into a new attraction by making the most of its location close to an urban area and the donation of the visitor facility.
Given the few tourist resources near the city, Sanyo-Onoda has long been promoting the existence of diverse industrial facilities including nearby cement-related facilities and other industrial heritage sites. Joining hands with the adjoining municipalities of Ube and Mine, Sanyo-Onoda Industry Tourism Promotional Association has planned and offered "Industry Tourism Bus Tours" since fiscal 2008. One of the tours is called "Energy Sanyo-Onoda – the Energy Industry's Current State and Environmental Approach." In this tour, visitors are taken to coal- and oil-related facilities at local companies, the Chugoku Electric Power's thermal power plant and the solar panel factory of Choshu Industry, which has its headquarters and factory in Sanyo-Onoda City. The association is planning to add the mega solar plant in Higashioki Factory Park to this tour when the plant is completed.
Mr. Kido of the Sanyo-Onoda Municipal Government expressed his expectations, saying, "As there are only a few areas that allow visitors to see oil-, power- and new energy-related facilities in one day, our energy-related tours will grow more attractive when this mega solar plant is added to the list."