PV System-equipped Logistics Facility Contributes to Local Community, Environment

A street called “Rikadai-dori” can be found as you turn left on prefectural road No 151 after driving about 2.5km from Kuki Station on the JR Tohoku Line and the Tobu Isezaki Line. However, Tokyo University of Science (TUS; Rikadai) is no longer there.

TUS School of Management’s Kuki Campus opened in Kuki City, Saitama Prefecture, in April 1993. At the time, the city tried to attract universities through such efforts as establishing roads around the campus. Being unable to attract as many students as it expected amid the decline in the 18-year-old population, however, TUS relocated its School of Management to Kagurazaka, Shinjuku-ku, Tokyo, and shut down Kuki Campus at the end of March 2016.

On September 30, 2018, two and a half years after TUS withdrew from the city, a huge building with four stories above ground and a gross floor area of 151,501m2 was completed on the former campus site. The next day, October 1, a mega- (large-scale) solar power plant with Kuki City’s largest-class output of 2.39MW began operation within the same site. However, there are no visible solar panels on the ground.

The completed building is “ESR Kuki Distribution Center (DC),” a logistics facility, and the mega-solar plant was set up on its rooftop.

ESR Ltd (Minato-ku, Tokyo) developed, owns and manages this logistics facility. The ESR Group was established by the US investment company Warburg Pincus LLC joining the entity after the business integration of e-Shang Cayman Ltd (e-Shang), which developed logistics and other facilities primarily in China and Korea, and the Redwood Group, which developed logistics facilities primarily in Asia and Japan in 2016. The group has its headquarters in Hong Kong and develops, owns and manages logistics facilities, in particular, in Asian metropolitan areas.

The ESR Group has constructed and runs about 150 logistics buildings with a gross floor area of over 11,000,000m2 in six countries, namely China, South Korea, Japan, Singapore, India and Australia. In Japan, the group has completed nine facilities in the Tokyo metropolitan area including Kuki City, two in the Nagoya area and three in the Osaka area, and is constructing facilities in other sites.

ESR purchased about 60% of the 136,500m2 former TUS Kuki Campus site and constructed ESR Kuki DC there. The building is equipped with 54 truck berths from the first to third floors, cargo elevators and a vertical conveyer system, while a lounge, stores and a nursery room are also provided as amenity facilities.

Located 2.5km from the Kuki Exit of the Tohoku Expressway and 5km from the Shiraoka-Shobu Exit of the Ken-o Expressway, the building is convenient as a logistics center for cargo trucks. Partly because it was previously used as a university campus, the site is also convenient for commuting by public transportation, being about 3km from JR Kuki Station and a two-minute-walk from the nearest stop on the bus route from the station.

Logistics facilities near exits of expressways used to give the impression of being “concrete boxes” to temporarily store truck cargo, but their form has drastically changed. Their function as a logistics facility has greatly advanced, and their work environment and amenities have been enhanced as “offices where people work” while efforts to harmonize with the local community and the global environment are being made as well.

ESR has also been leading such a new orientation of logistics facilities, seeking “human-centric design” as its basic philosophy. As you enter “ESR Kuki DC”, which has recently been completed, you will find a sophisticated lounge, a shop area in which a convenience store is planned to be located and a room that will be a nursery where pictures are painted on the wall. The area looks like a shopping mall.

ESR basically sets up solar panels on the roofs of such logistics facilities and runs power generation business. Rooftop solar power generators have been set up on all of its 21 facilities in Japan including those being developed, and their outputs extend from 250kW to 6.5MW. Combining the solar projects in operation and under construction with fixed capacities (17 facilities in total), the PV inverter capacity totals about 26MW.

“The roofs of logistics facilities are well-suited for solar power generation, and setting up solar panels there to run power generation business is very significant,” said Bryan Gould, director of Renewable Energy Program, ESR. “It is a shame to run a logistics facility without a solar power system.”

The ESR Group establishes and runs a different special purpose company (SPC) for each logistics facility operation and rooftop solar power generation project, so the risk of profit fluctuation unique to each business would not affect the others. For the SPC that operates the logistics facility, renting the rooftop to the SPC that runs the solar power generation project is a stable source of revenue.

ESR has adopted power selling business based on the feed-in tariff (FIT) scheme for the rooftop solar power generation business. As the unit price is highly likely to decline to 14 yen/kWh or lower in fiscal 2019 when the unit price begins to be determined by the posting system at plants with an output of 500kW or more, for example, ESR is reportedly considering self-consumption of generated power for new projects from now.

At ESR Kuki DC with a rooftop solar panel capacity of 2.39MW and a PV inverter rated capacity of 1.89MW, power generation is expected to amount to 2,700,000kWh per year. All generated power is sold at 21 yen/kWh using the FIT scheme.

Solar panels (315W/unit) manufactured by LG Electronics Inc of South Korea and PV inverters (1MW/unit) made by Toshiba Mitsubishi-Electric Industrial Systems Corp (TMEIC) were adopted.

Kinden Corp provided engineering, procurement and construction (EPC) services while Cool Earth Co Ltd (Chiyoda-ku, Tokyo) of the Advantec Co Ltd (Chiyoda-ku, Tokyo) Group operates and maintains the plant.

According to ESR, setting up solar panels on the roof of this logistics facility was not a problem in terms of load resistance. What ESR aimed for while designing the power plant was “to keep the wiring route and incidental equipment from entering the tenant space and to enable the solar plant to start operation as soon as the building is completed by finishing assembling the solar power generation facility within the construction period of the building itself,” said Satoshi Takeda, senior director and head of construction at ESR.

In fact, these goals set at the beginning of the design phase were successfully achieved.

Solar panels were attached to the corrugated roof by clasps, while PV inverters and the grid-connection facility were set up on the ground space between the building and the parking lot. Cables between the rooftop and the ground were housed in racks built in the space between the outer walls and emergency stairs.

Small-capacity PV inverters are set up at separate spots in some mega-solar system designs. But Gould said, “Taking into consideration wiring and running costs after the operation begins, we reached the conclusion that using large-capacity PV inverters would result in lower costs.”.

Power generation has been favorable in the approximately six months since the plant began operation, outperforming the estimate by more than 10%.