Promoting energy conservation and decarbonization of small to medium-sized buildings by leveraging advanced expertise in facilities management
We spoke with Mitsui & Co. Foresight Ltd, about its "Energy Service Business," which contributes to the promotion of decarbonization as well as optimal energy-saving facility renovations by leveraging its many years of experience in the comprehensive management of office buildings and other facilities, and the operation and maintenance of energy-related facilities.
Mitsui & Co. Foresight is engaged in comprehensive facility management of office buildings, sports, and amusement facilities, as well as operation and maintenance management of energy-related facilities such as solar and biomass power plants. Currently, we are focusing on the "energy service business. We are contributing to a decarbonized society by realizing energy conservation through the management and operation of facilities. We spoke with Mitsui Bussan Foresight about its "energy service business.
New business to realize energy savings in building facilities by leveraging our expertise in operation and maintenance of energy-related facilities
─── Please tell us how building management, which is the mainstay business of Mitsui & Co. Foresight, is connected to the energy service business.
H. Takahashi: Generally, it is said that the lifetime cost of a building is 1/3 of the construction cost, 1/3 of the building maintenance and management cost, and 1/3 of utility and other costs. We have been providing maintenance and management services for facilities such as electricity, gas, and water supply for "building upkeep and management." We have further expanded our services to "facility renewal, operation, and maintenance" and support energy saving of buildings through our energy service business. While some electric power and gas companies provide energy conservation services to large facilities, it is rare for a building management and facility management company to provide such services to medium-sized or smaller facilities.
Hidenori Takahashi, General Manager, New Sales Development Department, Solution Sales Division, Mitsui & Co. Foresight. He joined Marubeni Facility Corporation in April 1997 and was engaged in construction management of sanitary and air-conditioning works for new buildings. In December 2002, He joined Biken Techno Corporation. He was engaged in construction management of equipment renovation work for newly constructed buildings, as well as general building management work (cleaning, equipment management, security, repair work). In August 2015, he joined Mitsui & Co. Facilities (now Mitsui & Co. Foresight Ltd). Mitsui & Co. Foresight). After joining the company, he was engaged in sales of facility repair work for managed properties in the Construction Promotion Department, and then in sales of energy-related business in the Energy Solution Department of the Energy Management Business Division from April 2019. Since 2020, he worked in the new business development department, selling general building management and launching and selling energy service businesses.
Renewable energy can also be introduced
─── You are saying that the knowledge you have accumulated through the operation and maintenance of conventional energy-related facilities is useful in proposing energy-saving measures.
Maekawa: Yes. Mitsui & Co. Foresight operates and maintains facilities that require a high level of technology and expertise, such as solar power plants and biomass power plants. By utilizing the knowledge, we have gained through these activities, we can propose the installation of solar panels on the site to reduce electricity rates and CO2 emissions through solar power generation.
Tetsuya Maekawa, Executive Advisor, Mitsui & Co. Foresight, joined TEPCO in April 1979, joined Mitsui & Co. in July 2019, joined Mitsui & Co. Foresight in July 2022. He has long been engaged in corporate sales related to air conditioning and heat source in the electricity business before deregulation, and mainly focused on launching and promoting energy service business after the deregulation in 2000. Since joining Mitsui & Co., he has been engaged in supporting the enhancement of Mitsui & Co. Foresight's energy business.
─── Was there a reason why you decided to focus on the energy service business?
Maekawa: In addition to building management like ours, the office utility business of the Mitsui & Co. group provides comprehensive services for office needs, including cleaning, uniform provision, and management of company cafeterias. In this context, there was a discussion about the significance and potential of our company, a building management company, providing services to meet the energy-saving needs of offices, which had been persistent for some time, and we decided to start full-scale efforts in 2019.
H. Takahashi: We have been proposing energy conservation through facility renewal for some time, but it wasn't until 2018 that we began to focus on it in earnest as an asset-owning energy service.
Smooth completion of construction work by leveraging building management expertise
─── Do you have any specific examples of energy service projects you would like to introduce?
K. Takahashi: A medical care facility in Tokyo has reduced energy costs by 20% to 30% by replacing aging air conditioning equipment and installing LED lighting. Medical care facilities operate 24 hours a day, 365 days a year, so electricity costs for air conditioning are high. The installation of the LED lighting system reduced the energy costs by 20% to 30%. In addition, by completing the installation in a short period of time, we were able to keep construction costs low, which was also highly appreciated.
Kazuo Takahashi, Senior Manager of New Sales Development Department, Solution Sales Division, Mitsui & Co. Foresight. He joined Mitsui & Co. Facility Service (now Mitsui & Co. Foresight) in 2011. As a sales representative focusing on facility management services, he was engaged in the management of managed properties and sales of temporary construction and spot work. He has also been involved in the medical and energy fields, and currently focuses on sales of energy service business and development of new clients as a member of the New Sales Development Department.
─── What was the secret behind the short and cost-effective construction?
K. Takahashi: When major facility construction is required, it is usually done without allowing facility staff or users to enter the facility. In the case of medical care facilities, temporary facilities may be required to provide the same services to facility users during the construction period, resulting in high incidental costs.
In the case of our company, we are familiar with the flow lines of facility staff and users at different times of the day, since we are involved in building and facility management on a daily basis. In addition, as a building manager, we are in constant communication with facility operators, so we are able to provide detailed guidance to people. With this knowledge, we were able to complete the construction work while maintaining normal facility operations, greatly reducing the construction period and costs.
No initial investment and no repair costs by subscription
─── In addition, are there any other strengths unique to Mitsui & Co. Foresight?
H. Takahashi: When you use our service, you do not need to pay the initial cost associated with equipment renewal. We hold the newly installed facilities and equipment as assets, and our customers pay a monthly fee for the use of the facilities. We apply this system to air conditioning equipment, power receiving equipment, water tanks, and water supply pumps. It is a so-called subscription-type service and can be considered a type of ESCO business.
In any facility, the time for equipment renewal comes after 10 years. In some cases, especially for facilities of medium size or smaller, there may not be sufficient funds available for equipment renewal, and a decision must be made whether to continue using the aging equipment or to invest funds to renew the equipment. In such cases, by using our services, in addition to eliminating the initial costs, you will benefit from reduced utility costs and CO2 emissions through the energy-saving effects of installing the latest equipment, as well as improved ROA (return on assets) by not having to own the assets.
Reducing CO2 emissions through energy conservation
─── I know that the size of the building and the condition of the equipment used varies, but can energy bills be lowered by renewing the equipment?
H. Takahashi: As you mentioned, it is difficult to make a blanket statement, but there have been cases where electricity bills were cut in half after replacing a 10-year-old refrigerator, or where electricity usage was improved by 38% after replacing air conditioning equipment that was about 30 years old with the latest equipment. We properly simulate the initial cost of updating equipment as well as the operating costs, including utility costs, and make a contract with a commitment to reduce utility costs. In addition, in recent years, many customers are interested in CO2 emission reduction effects, and we are able to present those as well. This is something that is difficult for general facility management companies to do, and is one of our unique characteristics.
─── I understand that you are mainly targeting mid-size and smaller facilities, but can you also handle large facilities?
H. Takahashi: Of course. Based on our awareness of the problem that energy-saving services are not being provided to mid-size and smaller facilities, we mainly target mid-size and smaller facilities, but we also manage and operate buildings such as large office buildings, amusement facilities, nursing care facilities, and hospitals.
─── What hurdles, if any, have you encountered in advancing Mitsui Foresight's energy service business?
K. Takahashi: It is rare for a "building and facility management company" to provide asset-owning energy-saving services to "medium-sized or smaller facilities. Therefore, even if we present the cost reduction and CO2 reduction effects through energy conservation to customers, they do not immediately trust us, and even if they try to obtain quotes from other companies, there are no companies that can provide similar services. It may sound cliché, but the first step is to increase name recognition and awareness.
Contribute to decarbonization by introducing the latest equipment optimized for customers
─── I am sure that there is a growing need among customers for such projects to reduce CO2 emissions and energy costs.
H. Takahashi: Since the collapse of the bubble economy, all companies have made continuous efforts to reduce costs. In addition, in recent years, there has been a growing need to reduce environmental impact from a CSR perspective . On the other hand, because reducing environmental impact is costly, many customers are unable to take the first step toward energy-saving measures due to lack of investment capacity. We believe that our role in the energy service business is to push such customers forward.
Maekawa: Recently, we were asked to meet four requirements for the renewal of a building facility: "save energy costs," "reduce energy consumption," "reduce CO2 emissions," and "keep construction costs low. The inclusion of "reduction of CO2 emissions" in the requirements suggests that foreign companies and investors are particularly environmentally conscious.
K. Takahashi: in addition to the renewal of facilities at the medical care facilities I mentioned earlier, discussions have begun on replacing the vehicles used for transportation with electric vehicles, and reviewing the use of fossil fuel-derived materials such as paper, clothing, and diapers at the facilities. We hope to be there for our customers and encourage them to decarbonize their buildings.
H. Takahashi: The majority of facility management contracts are generally short-term, lasting from one to three years. However, we value the relationship of trust with our customers, and we believe that we can help them operate their facilities with peace of mind over a long-term relationship of 10 to 15 years in our new energy service business, respond to diverse needs, including not only facility management but also cleaning and owner operations on their behalf, and support decarbonization. Mitsui's comprehensive strengths and support for the decarbonization of society. We hope that our energy service business will be one of the opportunities to do so.
