Energy and Environment Case Studies

Case Study #1 - Yanmar

Originally founded in Osaka, Yanmar has been developing and manufacturing diesel engines for almost 100 years. The company is now a global success and supplies engines, parts and equipment to a selection of industries from construction to agriculture.

Yanmar's aim is to become an international leader in its field through innovations which harness environmental and sustainable technology.

Like all the most respected global companies, Yanmar has invested a lot of resource in developing a range of environmentally-friendly products. The company has become the Japanese market-leader in Micro-CHP (Combined Heat and Power), which is commonly used in larger domestic and commercial buildings such as hospitals, nursing homes, hotels and schools.

Yanmar is the leading manufacturer in Japan for commercial-use cogeneration package systems, with the highest efficiency ratings in its class. Packaged CHP systems of less than 1MW are the most versatile and widely adopted combined heat and power system used already in the UK, being installed in residential, commercial and retail buildings around the UK. The UK Government has set targets for installed CHP capacity to reach 10,000 MWe by 2010. The latest energy projections for the UK anticipate that by the end of 2010, 10% of the total electricity supply will come from CHP.

In their home market, commercial conditions make natural gas the most common fuel for Micro-CHP. Makoto Yasuda, from Yanmar's environmental business development department, explains more: "Initially, we were looking at developing a Micro-CHP unit that would be fuelled by natural gas, but we realised quite early on that we should put our focus into biofuels, because environmentally-considerate biofuels can make a significant contribution to lowering carbon dioxide emissions, particularly when they combine both heat and power."

"Europe is the biggest global market for bio-diesel fuel," explains Yasuda. "And within Europe, the UK market is the most liberalised, and it's also the most environmentally-conscious. The UK government has set itself the most ambitious target in the European Union for reducing carbon emissions by 60 per cent by 2050. We also felt that UK citizens were more conscious about the effects of carbon emissions, and more familiar with the concepts of environmental footprints and carbon offsetting." Yanmar chose the North East of England as the base for their operations. "We decided to pilot our first Micro-CHP unit in the North East because there are a lot of bio-fuel industries located there, which was an important factor in terms of procuring the bio-diesel required. Also, One NorthEast offered us a great deal of support - more than any other Regional Development Agency."

In July 2006, One NorthEast and NaREC proactively proposed a demonstration/development project to Yanmar. One NorthEast then engaged with UKT&I in order to add the UK wide dimension the project required. The company had been supported to establish a regional base and as a team One NorthEast and UKT&I then created a national network for YANMAR. In addition, One NorthEast was able to support meetings between Yanmar and key regional academics who specialise in engine development and testing. One of Yanmar's key goals was to develop a diesel engine which has a very high level of reliability when fuelled with 100% biofuel, not a mix of conventional fuel and biofuel.

Andrew Mill, CEO at the New and Renewable Energy Centre (NaREC) in Blyth, Northumberland, "The North east has an excellent supply chain for bio-fuels, and this combined with our own expertise for new energy technology application will assist Yanmar in developing bio-fuel micro CHP further for the European market. The aim of this new research and development project with Yanmar is to further explore ways of diversifying existing proven energy technology which uses conventional fuel sources, and adapt it for renewables."

Researchers at Newcastle University were keen to develop a relationship and committed to house one of Yanmar's engines on-site and conduct a series of high-stress tests using 100% biodiesel.

In November 2007, the Minister for the North, Nick Brown, unveiled the Yanmar testing facility at the New and Renewable Energy Centre (NaREC), a world-class facility situated in the North East. On show was Yanmar's 9.9kw Micro-CHP unit which is capable of running on 100% biodiesel. Yanmar hopes to start selling the units after the testing phase is completed in 2012 - when the company is celebrating its centenary.

Paul Mclean, Bioenergy Advisor at NaREC added, "Endurance tests on the systems at NaREC's laboratories in Hebburn are progressing well. Using a small scale bio-fuelled combined heat and power system to heat our 40m high laboratory is demonstrating the cost and energy savings that can be made from using alternative energy systems - especially for organisations with the readily available bio-diesel supply chain that we enjoy in the North East. This flourishing partnership bringing together both academic and industrial representatives from the region, with such advanced technology developers from Japan is signaling a new era for energy in the North East, with our heritage, expertise and experience demonstrating that we have much to offer the evolving energy industry."

"The factors which tipped the balance for us were the research available in North East England together with the excellent support offered by UK Trade & Investment and ONE North East", says Yasuda. "Without their assistance and support, it would have definitely taken us longer to make a decision to invest in the UK - and we may even have ended up going to a different country".