Regional Heat Supply : DHC (District Heat and Cooling)
- The Situation Around the World and the Issues Facing Japan -

No.57
July 1999
Research Fellow Reiji Takeishi

1. The diffusion of an effective regional heat supply system is necessary as a countermeasure to prevent global warming. In Japan, where two-thirds of all one-dimensional energy is lost as heat, efficient regional heat supply is necessary. In urban areas especially, where the density of heat consumption is high, the promotion of efficient energy use is crucial.
2. By the end of 1997, there were only 129 instances of district heat and cooling (DHC) implementation in Japan; compared with the U.S. and Europe, the level of diffusion is extremely lagging. For Japanese DHC providers, there is a strong trend toward holding heat, steam, and cooling costs low in order to maintain competitiveness. As seen in American businesses, the creation of infrastructure as the central pillar of urban planning should be aimed for in the years to come, and an industry that incorporates both technological innovation and management capability should be pursued.
3. The introduction of DHC began more than a hundred years ago in North America, and within the fierce competition for electricity, gas, and other forms of energy, DHC providers grew through repeated buyouts, mergers, cross-industry participation, and other corporate developments. In order to increase profitability, these providers have conducted fuel and machine selection in combination with a diverse menu of offerings with the aim of rationalizing customers' energy use.
4. The establishment of DHC is progressing in Europe, specifically in the countries of Denmark, Finland, Germany (especially the northern region), France (especially the Paris metropolitan region), and Sweden. Presently, the rapid introduction of DHC is also progressing in England as well. Fuel and heating system choices that are adapted for the circumstances of each country can be seen, and water power-reliant Norway, gas-dependent Holland, and coal-dependent Denmark and Finland each offer a rich variety of energy choices.
5. In order for the diffusion and sophistication of DHC systems to succeed, the profitability of electric power sales and consignment must first be increased through liberalization of the electricity sector. Following this, DHC providers must work toward the networking of disparate power generation and supply plants as one complex system industry. Furthermore, operational optimization between various DHC systems must be pursued Lastly, the adoption of a highly efficient system that contributes to the prevention of accidents, a high level of regional energy independence, and energy security is critical.

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