We recently developed a novel computational methodology, referred to as QM/MM-ER, to compute free energy change associated with a chemical reaction in a condensed phase by combining the quantum mechanical / molecular mechanical (QM/MM) method with a theory of solutions. In the present review article we illustrate an outline of the QM/MM-ER method. We also present an extension of the QM/MM-ER method to compute reduction free energy of cofactor FAD (Flavin Adenine Dinucleotide) in water as well as in apoprotein by introducing a novel approach. The key of the approach is that only the excess charge involved in the reduction process is identified as a solute. The adequacy of the method is examined for the reaction in aqueous solution by comparing the result with that obtained by a conventional approach. The reduction free energy of cofactor FAD embedded in a cholesterol oxidase (PDB id = 1B4V) is computed as -163.1 kcal/mol by the QM/MM-ER approach, while it is obtained as -80.1 kcal/mol for the cofactor in water solution.