Recently, “utility costs” have skyrocketed. Many people may have been surprised by the high bills. With further price hikes expected in the future, it is important to reduce the amount of energy used in stores and kitchens in order to reduce the burden. Promoting “energy saving” by restaurants is an important initiative that will not only reduce costs, but will also reduce the amount of greenhouse gases emitted daily and contribute to the realization of carbon neutrality.
According to “the Intergovernmental Panel on Climate Change (IPCC)“, greenhouse gases generated by the food system account for up to 37% of total anthropogenic greenhouse gas emissions, and cooperation from restaurants is essential to improve this situation. Therefore, in this column, we will introduce the factors behind the price hikes, future prospects, and useful tools for energy-saving efforts.
Table of Contents
Why are utility costs rising?
Japan has a low energy self-sufficiency rate and relies on imports for energy supply. According to the “Comprehensive Energy Statistics” released by the Agency for Natural Resources and Energy, Japan’s energy self-sufficiency rate in 2019 is 12.1%. Among the member countries of the “OECD (Organization for Economic Cooperation and Development)”, an international organization of 38 developed countries, Japan ranks 35th, a very low level compared to other countries.
For Japan, which has low energy self-sufficiency, the soaring fossil fuel import prices resulting from Russia’s invasion of Ukraine and the rapid depreciation of the yen in the foreign exchange market have had a significant impact, and nine of the ten major electric power companies that generate electricity from fossil fuels are expected to report losses in their March 2023 financial results, excluding Chubu Electric Power Company,Incorporated.
Government bailouts and future prospects
In response to this situation, the Japanese government approved the “Comprehensive Economic Measures to Overcome High Prices and Achieve Economic Revival” by the Cabinet, which includes “projects to mitigate drastic changes in electricity and gas prices” that will offer discounts based on the amount used from January to September 2023 through electricity and city gas retailers and others. As a result, electricity rates will be discounted by 7 yen per kWh for low-voltage contracts and 3.5 yen per kWh for high-voltage contracts.
While temporary relief measures have been taken, seven major electric power companies have applied to raise their “low-voltage regulatory rates,” which require government approval. Five of them (Tohoku Electric Power Co.,Inc., Hokuriku Electric Power Company, Chugoku Electric Power Co.,Inc., Shikoku Electric Power Co.,Inc., and Okinawa Electric Power Co.,Inc.) aim to raise their rates from April, while two (Hokkaido Electric Power Co.,Inc. and Tokyo Electric Company Holdings, Inc.) aim to raise theirs from June. The average rate of increase for each company is substantial, ranging from 28.08% for Shikoku Electric Power Co.,Inc. at the lowest to 45.84% for Hokuriku Electric Power Company at the highest. With no end in sight to the price hikes, it is imperative to make daily energy-saving efforts.
Energy-saving” actions that restaurants would like to take
01. Work on “easy energy-saving techniques”
Why not start by reviewing your daily activities and working on energy-saving techniques that can be easily implemented? The “Power Saving Check Sheet for Restaurants (Family Restaurants, Izakaya (Japanese style pubs), Fast Food Restaurants, etc.)” published by Hokkaido Electric Power Company introduces various devices essential for restaurants to save power in summer and winter.
- Hokkaido Electric Power Network Inc.: Power Saving Check Sheet for Restaurants (Family Restaurants, Izakaya, Fast Food Restaurants, etc.) (Summer) (visit external site)
- Hokkaido Electric Power Network Inc.: Power Saving Check Sheet for Restaurants (Family Restaurants, Izakaya, Fast Food Restaurants, etc.) (Winter) (visit external site)
In addition, the “Energy Saving Portal Site” published by the Ministry of Economy, Trade and Industry and the “Ultra Energy Saving Book” published by Tokyo Gas summarize how to use energy-consuming equipment in a power-saving manner, the annual CO2 reduction that can be achieved through such efforts, and the annual cost savings.
- Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry: Energy Conservation Portal Site (external website)
- Tokyo Gas Group: Ultra Energy Saving Book (external website)
Using these sites to review how equipment is used is the easiest and least expensive way to conserve energy.
02. Utilize subsidies and prepare energy-saving equipment
Replacing kitchen equipment and other essential equipment for hotels and restaurants with more energy-efficient ones is one of the means. According to the ” Energy Conservation Implementation Guidelines for General Restaurants” released by the Ministry of Agriculture, Forestry, and Fisheries in March 2019, the largest percentage of CO2 emissions in the example of general restaurants (izakaya) was from the use of electricity at about 80%, followed by gas at 17% and water at 2%. In addition, the breakdown of where electricity was consumed was approximately 40% for kitchen equipment, 30% for lighting, and 20% for air conditioning.
[Source]: Ministry of Agriculture, Forestry and Fisheries: Energy Conservation Implementation Guidelines for General Restaurants
According to the Ministry of Agriculture, Forestry and Fisheries, in the case of a household refrigerator with a content of 401 to 450 liters, comparing a 10-year-old product with the latest model, power consumption can be reduced by about 37 to 43% and electricity bills by about 4,740 yen to 6,090 yen per year. Comparing annual power consumption of a household refrigerator and a commercial refrigerator of the same capacity, the commercial refrigerator consumes about three times more power, and therefore, its electricity bill and CO2 emissions are proportionally higher.
In addition, the Agency for Natural Resources and Energy of the Ministry of Economy, Trade and Industry provides ” subsidies to support the promotion of investment in energy conservation” to encourage businesses to introduce energy-saving equipment. Support is available for the introduction of energy-saving equipment such as commercial refrigerators and freezers, air conditioning equipment, and LED lighting fixtures with control functions. Such support programs are also offered by other local governments, so you may want to check them out.
03. Receive professional support
On the “Energy Conservation Help Team” website operated by “the Initiative for Environmental Co-creation”, you can find community-based support groups that have been selected by the Agency for Natural Resources and Energy of the Ministry of Economy, Trade and Industry for a regional platform building project.
The site allows users to search for an organization from a list of energy conservation help desk offices throughout Japan divided by prefecture and apply to receive advice on how to start saving energy, surveys of energy use, and other support. The cost is 10% of the cost of the diagnosis and support.
For those who do not know where to start when it comes to “working on energy conservation,” it may be a good idea to take advantage of these sites and get support from experts.
- Energy Conservation Helpers (go to external site)
How was it? In this column, we introduced the factors behind the price hikes, future prospects, and tools that can be utilized in energy conservation efforts. Energy conservation efforts will not only reduce costs, but will also lead to the creation of environmentally friendly stores. It is important to start with what you can do.
[Reference Site] ICPP: Climate Change and Land
[Reference site] Intensifying LNG competition Stable supply of natural gas that has collapsed
[Reference Site] NHK electricity rates for 10 major electric power companies will be at the highest level for next January’s billing
[Reference site] Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry: Measures to reduce the burden of electricity and city gas rates have begun.
[Reference site] “Regional Disparity” in Electricity Rates Widens as TEPCO Raises Prices by 30%, with “nuclear power” and “renewable energy” as keywords
[Reference site] “Ultra Energy Saving Book” website renewal open [Tokyo Gas Urban Living Institute]
[Reference Site] Ministry of Economy, Trade and Industry, Agency for Natural Resources and Energy: Energy Conservation Portal Site Energy conservation-related information Various support systems