[Japan] The Japanese Cabinet Approved a Business Split by Nine Utilities

Japan’s Ministry of Economy, Trade and Industry on March 13, 2020, announced that it has approved the application for a business split submitted by nine utilities. Each of the utilities’ transmission and distribution businesses will be legally separated starting on April 1, 2020. The utility split aims to secure the neutrality of the power transmission and distribution sector, in accordance with the Electricity Business Law Amendment Bill enacted in June 2015 (Act No. 47 of 2015). 

The nine utilities include the following[1];

·       Hokkaido Electric Power (HEPCO, Headquarters: Sapporo City, Hokkaido)

·       Tohoku Electric Power (Tohoku, Headquarters: Sendai City, Miyagi Prefecture)

·       Chubu Electric Power (Chuden, Headquarters: Nagoya City, Aichi Prefecture)

·       Hokuriku Electric Power (Rikuden, Headquarters: Toyama City, Toyama Prefecture)

·       Kansai Electric Power (KEPCO, Headquarters: Osaka City, Osaka Prefecture)

·       Chugoku Electric Power (‎EnerGia, Headquarters: Hiroshima City, Hiroshima Prefecture)

·       Shikoku Electric Power (Yonden, Headquarters: Takamatsu City, Kagawa Prefecture)

·       Kyushu Electric Power (Kyuden, Headquarters: Fukuoka City, Fukuoka Prefecture)

·       Electric Power Development (J-POWER, Headquarters: Tokyo).

There are two forms of splits that will be implemented: (1) implementing a holding company structure or (2) establishing the power generation/retail division as a parent company. The image below shows the post-split business structure for each company.

[1] https://www.meti.go.jp/press/2019/03/20200313008/20200313008.html

[Japan] Chugoku Electric Power Issued Chugoku Electric Power Network Management Vision 2030

On March 13, 2020, Chugoku Electric Power (‎EnerGia, Headquarters: Hiroshima City, Hiroshima Prefecture) issued the Chugoku Electric Power Network Management Vision 2030. The Management Vision 2030 addresses three key pillars: strengthening the power transmission and distribution business, developing new businesses, and contributing to regional revitalization by collaborating with the local community. In April 2020, Chugoku Electric Power Network will take over the power transmission and distribution business from EnerGia.

Chugoku Electric Power Network aims to achieve sustainable growth in the power transmission and distribution business by providing services that meet customer expectations, and by reforming its business structure in response to changes in the business environment, such as declining population, digitalization, the need for resiliency, and the introduction of renewable energy. Chugoku Electric Power Network will invest in advanced systems for operations and maintenance, cybersecurity, and monitoring to improve efficiency while maintaining a stable energy supply.

In order to develop new businesses, the company plans to collaborate with other companies in various fields such as IT, finance, and transportation. It will also explore the utilization of Artificial Intelligence (AI), Internet of Things (IoT), blockchain, Electric Vehicles (EV), and battery storage. Chugoku Electric Power Network will also focus on strengthening its two-way communication with the local community that it serves to better understand their needs and to support safe and resilient community development.[1] [2]

[1] http://www.energia.co.jp/press/2020/12365.html

[2] http://www.energia.co.jp/assets/press/2020/P200313-1a.pdf

[Japan] Chubu Electric Power, Hokuriku Electric Power, and Kansai Electric Power Began Operation of Wide-Area Supply and Demand Adjustment

Chubu Electric Power (Chuden, Headquarters: Nagoya City, Aichi Prefecture), Hokuriku Electric Power (Rikuden, Headquarters: Toyama City, Toyama Prefecture), and Kansai Electric Power (KEPCO, Headquarters: Osaka City, Osaka Prefecture) announced on March 12, 2020, that they had begun a joint wide-area supply and demand adjustment in order to improve the efficiency of their power transmission and distribution.

In order to supply electricity, the supply and demand for electricity needs to be balanced. However, power generation and demand may not always be balanced due to power supply loss or errors in demand forecasting. In the past, each utility company had to adjust the supply and demand within their service areas. However, the wide-area supply-demand adjustment allows the utility companies to cooperate in adjusting supply and demand, using the inter-regional interconnection lines connecting their service areas. The partnership helps the utility companies to reduce their operational costs.

The operation of a wide-area supply and demand adjustment is expected to expand as six more major utilities will participate in the plan. The additional six utilities are: Hokkaido Electric Power (HEPCO, Headquarters: Sapporo City, Hokkaido), Tohoku Electric Power (Tohoku, Headquarters: Sendai City, Miyagi Prefecture), Tokyo Electric Power (TEPCO, Headquarters: Tokyo), TEPCO Power Grid (Headquarters: Tokyo), Chugoku Electric Power (‎EnerGia, Headquarters: Hiroshima City, Hiroshima Prefecture), Shikoku Electric Power (Yonden, Headquarters: Takamatsu City, Kagawa Prefecture), and Kyushu Electric Power (Kyuden, Headquarters: Fukuoka City, Fukuoka Prefecture).[1]

[1] http://www.rikuden.co.jp/press/attach/20031201.pdf

[Japan] Chubu Electric Power Invested in Pitango Healthtech Fund

Chubu Electric Power (Chuden), headquartered in Nagoya City, Aichi Prefecture, announced on February 27, 2020 that it had decided to invest in the Pitango Healthtech Fund, which was established in 2019 by Pitango Venture Capital, a leading Israeli venture capital firm.

Pitango Venture Capital has knowledge of the Israeli start-up ecosystem and has invested more than 200 companies. The Pitango Healthtech Fund will target Israeli startups in the intersection of healthcare and technology, particularly Artificial Intelligence (AI) and Internet of Things (IoT).

The investment will be made from the Chubu Electric Community Support Fund, an internal fund established in April 2019 in order to speed up investments in venture companies and venture investment funds with advanced technologies and innovative business models. It is the first time that the Chubu Electric Community Support Fund has invested in a venture investment fund.

Chuden will continue to build relationships with Israeli companies with advanced AI and IoT technologies in order to adopt cutting edge technologies and build community support infrastructure.[1]

[1] https://www.chuden.co.jp/corporate/publicity/pub_release/press/3272536_21432.html

[Japan] Tohoku Electric Power Released its Medium- to Long-Term Vision

On February 27, 2020, Tohoku Electric Power (Tohoku), headquartered in Miyagi Prefecture, released its Medium- to Long-Term Vision. Tohoku’s goal is to become a business group that grows with the sustainable development of society and contributes to the realization of a smart society in the 2030s, while improving the competitiveness of its core electricity supply business.

Tohoku’s Medium- to Long-Term Vision reflects the changes in the business environment in their operating regions of Tohoku and Niigata Prefecture. Since its founding, Tohoku has been doing so through stable power supply with our basic principle: “No prosperity regions of Tohoku, no development of our group.” However, their operating region has seen progressive depopulation, declining birthrates, and an aging population. The competition has also become more intense due to the full liberalization of the electricity retail market and the impact of digitalization on the conventional utility business model. In its Medium- to Long-Term Vision, Tohoku focuses on enhancing the competitiveness of its core business as well as setting its growth strategy in the smart society businesses, addressing various social issues.

Tohoku has set 2020 to 2024 as a transition period for Tohoku’s business model. During this time, Tohoku will strategically invest in management resources in order to shift its business model towards the realization of a smart society. The investments will include Virtual Power Plant (VPP) and battery storage, mobility services, and smart city development. Tohoku will also strengthen its core business by maintaining its diversified energy portfolio and will continue the development of new renewable and gas-fired power plants. In addition, Tohoku will improve the resiliency of its electricity network and aims to reduce its operational costs using Artificial Intelligence (AI) and Internet of Things (IoT) technology solutions. Tohoku aims to achieve consolidated cash earnings of 320 billion yen (approximately $3 billion) * in FY 2024.[1][2]

*Based on the exchange rate as of March 10th, 2020.

[1] http://www.tohoku-epco.co.jp/news/normal/1205982_1049.html

[2] http://www.tohoku-epco.co.jp/news/normal/__icsFiles/afieldfile/2020/02/27/b2_1205982.pdf

[Japan] The Japanese Cabinet Decided to Revise the Electricity Business Act to Establish a Robust and Sustainable Electricity Supply System

On February 25, 2020, Japan’s Ministry of Economy, Trade, and Industry (METI) announced that the Cabinet had approved a bill enacting revisions to the Electricity Business Act, the Act on Special Measures Concerning Procurement of Electricity from Renewable Energy Sources by Electricity Utilities, and the Act on the Japan Oil, Gas and Metals National Corporation, Independent Administrative Agency (JOGMEC Act)[1]. The proposed revisions aim to establish a resilient and sustainable electricity supply system. The bill was submitted to the 201st ordinary session of the Parliament.[2]

The bill, which is now pending in the Parliament, requires electricity distribution companies to coordinate on disaster response; establishes a new system supporting the introduction of renewable energy; and adds additional operations at the Japan Oil, Gas and Metals National Corporation (JOGMEC) to enable a stable energy supply. JOGMEC (Headquarters: Tokyo) is a Japanese government Independent Administrative Institution that is responsible for securing a stable supply of nonferrous metals and mineral resources.[3]

Key highlights of the proposed revisions include:

· The revised Electricity Business Act will require distribution and transmission operators to develop a disaster coordination plan and a wide-area grid maintenance plan.

· The modified Act on Special Measures Concerning Procurement of Electricity from Renewable Energy Sources by Electricity Utilities will require the establishment of a FIP (Feed-in Premium) scheme, which adds a premium to the market price for renewable energy production. The act also imposes external funding obligations on solar power generation companies for disposal costs. Furthermore, the act will ask the Japanese government to establish a system to support the cost of inter-regional transmission lines, which is necessary to expand the introduction of renewable energy.

· The revision of the JOGMEC Act will require the JOGMEC to launch a business to procure liquefied natural gas (LNG) and other fuel for power generation at the request of the Minister of Economy, Trade, and Industry in the event of an emergency. Additionally, in order to diversify LNG suppliers and secure a stable supply of metal minerals, JOGMEC will invest in natural gas transshipment and storage bases and mining businesses.

[1] https://www.meti.go.jp/english/information/data/laws.html

[2] http://www.shugiin.go.jp/internet/itdb_gian.nsf/html/gian/menu.htm

[3] http://www.jogmec.go.jp/about/organization_001.html

[Japan] Mitsubishi Heavy Industries’ Turboden will Deliver an Organic Rankine Cycle Power Generation System to the Meadow Lake Tribal Council in Saskatchewan, Canada

On February 10, 2020, Mitsubishi Heavy Industries’ (MHI) subsidiary Turboden, a manufacturer based in Bersica, Italy that specializes in Organic Rankine Cycle (ORC) systems that produce electric and thermal power[1], announced that it would deliver an 8MW ORC power generation system to the Meadow Lake Tribal Council (MLTC) in Saskatchewan, Canada. The system will be fueled by sawmill residual wood biomass.

MTLC is a tribal council representing nine First Nation band governments in Saskatchewan. Multiple native inhabitant groups reside in the tribal area which is located near Meadow Lake in the northwestern area of the province. The ORC system will be funded by both the Canadian federal government and the Saskatchewan government as a part of the MLTC’s local development program. Approximately 5,000 households in the region will be supplied with a total of 6.6 MW of carbon neutral baseload electricity. In addition to electricity, the heat generated by this system will be supplied to NorSask sawmill’s lumber dry kiln and buildings, which is expected to reduce natural gas consumption. The NorSask Sawmill is Canada’s largest sawmill.

Although it was originally established in 1980 by professors at the Polytechnic University of Milan, Turboden was acquired by MHI in 2013. In 2016, Turboden signed a contract with Daiichi Jitsugyo (Headquarter: Tokyo, Japan), a general machinery trading company[2], to promote the marketing of its products. Since then, Daiichi Jitsugyo has become its sales distributor in Japan.[3]

[1] https://www.turboden.com/company/1058/about-us

[2] https://www.djk.co.jp/company/outline.html

[3] https://www.mhi.com/jp/news/story/200210.html

[Japan] Chubu Electric Power Will Test Information Bank MINLY in Early March 2020 in Toyota City, Aichi Prefecture

Chubu Electric Power (Chuden), headquartered in Nagoya City, Aichi Prefecture[1], announced on February 17, 2020 that it will test a local information bank, MINLY, in early March 2020 in Toyota City, Aichi Prefecture. MINLY will utilize Chuden customers’ personal data to improve their convenience and promote local economic development.

With the consent of the customers living in Toyota City or visiting the city, Chuden will consolidate, manage, and utilize their personal daily-life data (i.e. age, gender, interests or preferences and user behavior history). Customers will be offered personalized services and information that match their interests. This will include shopping information, coupons, and event information from 50 service providers and local retailers as well as approximately 25 Toyota city-owned public facilities operators. The test is supported by the Toyota City Connected Society Verification Promotion Council.

In order to launch MINLY, Chuden has obtained Information Bank P certification from the Information Technology Federation of Japan (ITrenmei, Headquarter: Tokyo)[2], which advocates for individual users’ privacy protections. As a next step, Chuden will acquire an Ordinary Certification from ITrenmei by demonstrating the project in Toyota City. The Ordinary Certification is based on the Japanese government guidelines for information banking services, and indicates that the service complies with international standards for privacy protection and information security measures.[3]

[1] https://www.chuden.co.jp/english/corporate/ecor_company/ecom_outline/index.html

[2] https://www.itrenmei.jp/summary/

[3] https://www.chuden.co.jp/corporate/publicity/pub_release/press/3272452_21432.html

[Japan] Kansai Electric Power Launched an Energy Management Demonstration Project Using Solar Power and Storage Batteries

Kansai Electric Power Company (KEPCO, Headquarters: Osaka Prefecture) announced on February 17, 2020, that it has launched an energy management demonstration project that will be deployed in grocery stores using solar power systems integrated with battery storage.

 As a part of the project, storage batteries will be installed at grocery stores operated by an Osaka-based grocery retailer, Kano Co.[1], which has contracted for a KEPCO’s onsite solar power service[2]. The project will verify the effectiveness of the battery storage in reducing electricity costs. It will also use a Kanden Virtual Power Plant Integrated Platform System (K-VIPs) to validate the performance of the storage battery control technology.

 Storing surplus energy from solar power generation on batteries and discharging it at other times, such as during the night, is expected to reduce electricity costs. The stored surplus energy can also be utilized during emergencies or as part of a demand response (DR) program by responding to the signals from aggregators.

 KEPCO aims to provide comprehensive energy management services by utilizing various components such as solar power generation with battery storage and energy resource aggregation services which are expected to grow. KEPCO’s energy aggregation services help customers to increase their revenues through operational improvements for energy procurement management and facility optimization by utilizing VPP and DR.[3]

[1] https://www.kk-kano.co.jp/

 [2] The KEPCO provides commercial and industrial customers with a suite of comprehensive (one-stop-shop) solar power services, ranging from rooftop solar installations, to operations and maintenance.

[3] https://www.kepco.co.jp/corporate/pr/2020/0217_1j.html

[Japan] Tohoku Electric Power Issued Green Bond to Expand Renewable Energy Business

Tohoku Electric Power Company, headquartered in Miyagi Prefecture, announced on January 29, 2020 that it has decided to issue a Tohoku Electric Power Green Bond in order to expand its renewable energy business and increase diversified funding procurement.[1] The Green Bond is expected to be issued in February 2020 and will be used for investment and refinancing in renewable energy development, construction, operation, and renovation projects.[2] Tohoku aims to develop 2,000 GW of renewable energy, mainly wind power. The funds raised through the Green Bond will be used mainly for renewable business activities.

To issue the Green Bond, DNV GL Business Assurance Japan K.K. (DNV GL), a third-party certification body headquartered in Kobe City,[3] evaluated and verified the Green Bond’s compliance with various standards related to green bond issuance. A Tokyo-based stock investment and fund management firm, SMBC Nikko Securities,[4] will be mainly responsible for issuing the 10-year green bonds with a total value of JYP 5 billion (app. $ 46 M). Details will be announced at the time of issuance.

Tohoku is the first Japanese former general electricity utility to obtain certification for a Green Bond from the Climate Bonds Initiative (CBI), an international non-profit organization located in London that sets strict standards for ensuring the reliability and transparency of green bonds.[5]

[1] http://www.tohoku-epco.co.jp/news/normal/1205380_1049.html

[2] http://www.tohoku-epco.co.jp/news/normal/__icsFiles/afieldfile/2020/01/29/1205380_b1.pdf

[3] https://www.dnvgl.jp/about/overview/business_assurance.html

[4] https://www.smbcnikko.co.jp/company/info/profile/index.html

[5] https://www.climatebonds.net/

[Japan] Chugoku Electric Power Released Corporate Vision ENERGIACHANGE 2030

Chugoku Electric Power (Chugoku EPCo), headquartered in Hiroshima Prefecture, issued a corporate vision white paper called ENERGIACHANGE 2030 on January 21, 2020. “ENERGIACHANGE" is a term that combines a corporate philosophy of "ENERGIA" and its new vision concept "Gear-change. "ENERGIA" is derived from Latin words, expressing activity, work and vitality. It is the origin of energy. "ENERGIA" expresses Chugoku EPCo’s desire to help create a brighter, more dynamic society. The white paper establishes a new vision with financial and non-financial goals. By 2030, Chugoku EPCo seeks to increase the company’s profit share of its fast-growing business segment from 5% to 25%, aiming to grow consolidated ordinary income from JPY 36 billion (approximately USD 328 million) to more than JPY 60 billion (App. USD 546 M). For non-financial goals, Chugoku EPCo plans to enhance its work environment by diversifying human resources and increase the amount of renewable energy capacity to between 300MW and 700MW. The utility plans to strengthen and advance existing businesses by improving the operational efficiency of existing nuclear power plants as well as promoting initiatives for carbon recycling technologies and renewable energy.[1]

After the full deregulation of Japan’s retail electricity market, Chugoku EPCo revenues have decreased due to the introduction of new retail energy providers and increased competition in the market. Though the company has generated a profit surplus, the consolidated ordinary income is only around JYP 30 billion (app. USD 273 M). In 2019, Chugoku EPCo announced that it will establish a wholly owned subsidiary called Chugoku Electric Power Network in April 2020,[2] aiming to separate its power transmission and distribution divisions.[3] Subsequently, Chugoku EPCo released Energia Change 2030, adjusting its vision and reviewing its past achievements.

According to the Energia Change 2030, major measures that will be completed by 2020 include;

1) Promoting development of new energy solutions/services

2) Strengthen the competitiveness of power sources

3) Improve the quality of transmission and distribution network services

4) Create revenue streams in Japan and overseas

5) Enhance collaboration with local communities

6) Improve the balance of income and expenditure.[4] [5] [6]

[1] p. 42, http://www.energia.co.jp/ir/irkeiei/pdf/groupvision_02.pdf

[2] http://www.energia.co.jp/press/2019/12139.html

[3] http://www.energia.co.jp/press/2019/12139.html

[4] p. 11-16, http://www.energia.co.jp/ir/irkeiei/pdf/groupvision_02.pdf

[5] http://www.energia.co.jp/press/2020/12262.html

[6] http://www.energia.co.jp/ir/irkeiei/groupvision.html

[Japan] J-Power Began Commercial Operation of Nikaho No.2 Windfarm

Tokyo-based Japanese power producer J-POWER[1] began commercial operation of the new Nikaho No.2 wind farm in Nikaho City, Akita Prefecture on January 24, 2020. J-POWER began construction of the Nikaho No.2 wind farm in July 2017, and connected it to the grid to begin testing in March 2019.

This is J-POWER’s second wind farm in Nikaho City, following the Nikahokogen wind farm; it is also the third wind farm in Akita Prefecture. Currently, J-POWER operates 24 wind farms across Japan. The Nikaho No.2 wind farm produces 41.4 GW of electricity, increasing the combined capacity of J-POWER wind farms in Japan from 489.16 GW to 530.56 GW.

Between J-POWER’s two wind farms that are under construction in Japan and one offshore wind farm under construction overseas, J-POWER’s total domestic and international capacity will reach 830.942 GW. Leveraging its experience and knowledge, J-POWER will continue to develop and deploy renewable energy sources, including wind power.[2]

[1] http://www.jpower.co.jp/english/company_info/operations_in_japan/

[2] https://www.jpower.co.jp/news_release/2020/01/news200124.html?rss=news

[Japan] Chugoku Electric Power Received its First Supply of LNG from the U.S. Sabin Pass LNG Project

Chugoku Electric Power (Chugoku EPCo), headquartered in Hiroshima Prefecture, announced on January 7, 2020, that it has purchased and received liquefied natural gas (LNG) from the Sabin Pass LNG Project (SPL Project) at Yanai Power Station in Yamaguchi prefecture.[1] [2] [3] Chugoku EPCo signed a contract to purchase up to 400,000 tons of LNG annually for 17 years from Total Gas and Power Asia Ltd, a French energy company.

The SPL Project, operated by Cheniere, a U.S. LNG company, is located in Cameron Parish, Louisiana.[4] The LNG was loaded onto the carrier BW Tulip on December 9, 2019, in Louisiana. This is the first time that Chugoku EPCo has received LNG produced in the U.S., and the first time that it has received LNG containing shale gas. The LNG price index is based on the U.S. natural gas market price.

Chugoku EpCo is working to diversify its suppliers and procurement methods, alleviate its quality constraints, and reduce procurement prices, in order to improve the stability of its LNG procurement and reduce risks due to fluctuations in fuel prices.

[1] http://www.energia.co.jp/e/corp/pr/pr.html

[2] http://www.energia.co.jp/business/lng/lng1.html

[3] http://www.energia.co.jp/press/2020/12235.html

[4] https://www.cheniere.com/terminals/sabine-pass/

[Japan] JERA Joined Ocean Renewable Energy Action Coalition

On January 14, 2020, JERA (Japan’s Energy for a new eRA)[1] announced that it had joined the Ocean Renewable Energy Action Coalition, to advance the development of ocean-based renewable energy and mitigate the impact of climate change. JERA is a joint venture between Tokyo Electric Power Fuel & Power (headquartered in Tokyo)[2] and Chubu Electric Power (headquartered in Nagoya City, Aichi Prefecture).[3] It is the first Japanese company to join the Action Coalition.

The Ocean Renewable Energy Action Coalition was established by a group of offshore wind power companies, including Ørsted and Equinor, to promote the sustainable deployment of ocean-based renewable energies such as offshore wind, floating solar, tidal and wave power. Ørsted is a utility company based in Fredericia, Denmark.[4] Equinor is an energy company headquartered in Stavanger, Norway[5].

The Action Coalition will develop a 2050 vision, which will include action plans for stakeholders from industry, the financial sector, and the government to sustainably scale up the deployment of offshore wind, and to contribute to the United Nations’ (UN) Sustainable Development Goals (SDGs) and Decarbonization goals. The Action Coalition plans to announce a status update for the initiative at the UN Ocean Conference in Lisbon in June 2020.[6]

JERA has stated that it hopes to be a global leader in renewable energy, through commitments such as promoting large-scale offshore wind energy projects in Japan and abroad, and by contributing to the sustainable development of offshore wind energy through participation in the Coalition.

[1] https://www.jera.co.jp/english/corporate/

[2] https://www7.tepco.co.jp/fp/about/index-e.html

[3] https://www.chuden.co.jp/english/corporate/ecor_company/ecom_outline/index.html

[4] https://orsted.com/en/About-us

[5] https://www.equinor.com/en/about-us.html

[6] https://www.jera.co.jp/information/20200114_450 

[Japan] Japan’s Advisory Committee for Natural Resources and Energy Released its Interim Report on Building Sustainable Power Systems

On December 26, 2019, Japan’s Strategic Policy Committee of the Advisory Committee for Natural Resources and Energy released its interim report on Building Sustainable Power Systems. The interim report includes the Committee’s recommendations to rebuild Japan’s power systems and improve resilience.

Japan’s energy landscape is rapidly changing due: increasing resiliency needs; growing demand for decarbonization in response to the Paris Agreement; decentralization of networks through the introduction of renewable energy; and emerging new energy businesses that utilize Artificial Intelligence (AI) and the Internet of Things (IoT). The Agency for Natural Resources and Energy (ANRE) has established the Building Sustainable Power Systems Subcommittee under the Strategic Policy Committee to develop policies and measures to adapt to these changes.

The subcommittee held four meetings in 2019 from November to December to discuss these issues and released its findings in the interim report. The report highlights the following: [1]

     I.        Strengthening stakeholder collaboration for faster disaster recovery: the subcommittee discussed the need for a disaster coordination plan to improve disaster response collaboration among utility companies to shorten the recovery period. The subcommittee also proposed the establishment of a cost sharing mechanism for disaster recovery.

   II.        Creating a resilient power network: Typhoon No. 15 (Faxai) caused serious damage to the power network. In order to mitigate power outages during large-scale disasters, the subcommittee discussed the need to replace aging equipment and improve the inter-regional interconnection of the distribution network for a robust and sustainable power system.

     III.            Promoting decentralized power system: Typhoon No. 15 highlighted the need to place distributed energy resources for remote and hard-to-reach areas in advance, in order to quickly recover from a disaster. The subcommittee emphasized the importance of promoting and investing in distributed energy resources in these areas to improve resiliency including microgrids, renewable energy, storage batteries, and electric vehicles.

[1] https://www.enecho.meti.go.jp/committee/council/basic_policy_subcommittee/#system_kouchiku

[Japan] JERA and Osaka Gas Began Commercial Operation at the Freeport LNG Train #1 in Texas, USA

On December 10, 2019, JERA (Japan’s Energy for a new eRA)[1] and Osaka Gas, owned by the Daigas Group and headquartered in Osaka[2], announced that the Freeport LNG Project in Texas, U.S., has begun commercial operations for its LNG Train #1 on December 8, 2019.[3] The two companies participate in the project through FLNG Liquefaction, a joint venture of JERA, Osaka Gas and Freeport LNG Development headquartered in Houston, Texas. JERA is a joint venture between Tokyo Electric Power Fuel & Power (headquartered in Tokyo)[4] and Chubu Electric Power (headquartered in Nagoya City, Aichi Prefecture)[5].

The two companies have participated in the project since October 2014. The Freeport LNG Project is operated by Freeport LNG Development, headquartered in Houston, Texas.[6] The LNG Train #1 has a liquefaction capacity of approximately 5 million metric tons per year, and Osaka Gas and JERA will receive about each 2.32 million metric tons of LNG per year under 20-year Liquefaction Tolling Agreements with FLNG Liquefaction.[7]

[1] https://www.jera.co.jp/english/corporate/

[2] https://www.osakagas.co.jp/en/aboutus/corporate_profile/

[3] https://www.jera.co.jp/information/20191210_439

[4] https://www7.tepco.co.jp/fp/about/index-e.html

[5] https://www.chuden.co.jp/english/corporate/ecor_company/ecom_outline/index.html

[6] http://freeportlng.com/about/corporate-history/

[7] https://www.osakagas.co.jp/company/press/pr_2019/1283872_40360.html

[Japan] Kansai Electric Power Company and Nihon Unisys Launched a Demonstration Project on Developing a Trading System for Surplus Solar Electricity Using Blockchain Technologies

Kansai Electric Power Company (KEPCO, Headquarters: Osaka Prefecture) and Nihon Unisys announced on December 9, 2019 the launch of a demonstration project for a system to determine the trading price of surplus solar electricity and environmental values[1] generated by prosumers[2].

The demonstration project will run until March 31, 2020. It will utilize blockchain technologies to develop a system to help consumers, prosumers, and businesses that participate in the RE 100 initiative to determine the trading price of surplus electricity. RE 100 is an initiative launched by the Climate Group of the United Kingdom (UK) and the CDP (formerly the Carbon Disclosure Project), a UK-based non-profit that is championing the use of 100% renewable energy for electricity for business operations.[3]

Nihon Unisys, headquartered in Tokyo[4], manufactures computer equipment and develops various software products.[5] In this project, Nihon Unisys will be responsible for developing and evaluating the system, while KEPCO will construct, demonstrate, and evaluate the system at the test center. The project has adopted four trading methods: Match-Price Auction, Single-Price Auction, Price Discrimination, and Dynamic Pricing.[6]

Since October 2018, KEPCO and Nihon Unisys have been working with prosumers and consumers to conduct a study to determine the price of surplus electricity generated by solar power generation, as well as to develop a new platform for direct trading. The two companies were able to simulate Peer-to-Peer (P2P) electricity trading by using blockchain technologies, and determined the transaction prices based on different trading methods.[7]

[1] Environmental value means electricity used by a prosumer itself and its surplus electricity.

[2] A prosumer is someone who both produces and consumers energy, in part, due to the rise of new connected technologies and the steady increase of more renewable energy such as solar and wind onto the electric grid.

https://www.energy.gov/eere/articles/consumer-vs-prosumer-whats-difference

[3] http://there100.org/

[4] https://www.unisys.co.jp/e/about/profile.html

[5] https://www.unisys.co.jp/e/solutions_services.html

[6] https://www.kepco.co.jp/corporate/pr/2019/pdf/1209_2j_01.pdf

[7] https://www.kepco.co.jp/corporate/pr/2019/1209_2j.html

[Japan] Keidanren Launched the Challenge Zero Initiative

On December 12, 2019, Keidanren (also known as the Japan Business Federation), in cooperation with the Japanese Government, announced the launch of the Challenge Zero Initiative. The Initiative will support innovations to build a zero-carbon society; promote Environmental, Social, and Governance (ESG) investments; and facilitate collaboration among the private sector, government, and academic institutions.

Keidanren is an economic organization that represents a membership comprised of 1,376 domestic companies, 109 nationwide industrial associations, and 47 of Japan’s regional economic organizations.[1]

The launch of the Challenge Zero Initiative was driven by the Japan's Long-term Strategy under the Paris Agreement, issued by the Japanese Cabinet in June 2019, which declared that Japan would seek to become a “decarbonized society” by 2050.[2] Keidanren has noted that since the Long-term Strategy under the Paris Agreement was issued, the Japanese business community has realized that more concrete and ambitious actions would be needed to create innovation in order to pursue a low-carbon society.

The Challenge Zero Initiative asks participating companies and organizations to commit to one or more of the goals set by the Initiative and to report their activities to achieve their commitments. The goals include promoting disruptive innovation for net-zero-carbon technologies, demonstrating and deploying those technologies; and financing companies that make low-carbon commitments. Keidanren plans to provide more detailed information on the Challenge Zero Initiative to member companies and organizations soon.[3] [4]

[1] https://www.keidanren.or.jp/profile/pro001.html

[2] https://www.env.go.jp/press/106869.html

[3] https://www.keidanren.or.jp/journal/times/2019/1212_02.html

[4] https://www.keidanren.or.jp/policy/2019/109.pdf

［Japan］ Tohoku Electric Power Company and SRA Tohoku Have Launched an AI Application for Transmission Tower Assessment

On November 28, 2019, Tohoku Electric Power Company (Tohoku, Headquarters: Miyagi Prefecture) and SRA Tohoku (Headquarters: Sendai), an IT company that develops computer programming and AI applications[1], announced that they have launched an Artificial Intelligence (AI) application for assessing the deterioration level of transmission towers.

The AI application can instantaneously evaluate the deterioration level of transmission towers based on the images captured by drones. The AI application’s database will gather and combine the information regarding deteriorated towers, including images of the towers and their geolocation. The integrated database should help utility companies to easily identify the deterioration trends for the entire transmission power systems as well as helping them to centrally monitor and assess towers’ conditions.

By using this application, the planning of repair work that previously took about 25 hours can be carried out within about 4 hours. It can also avoid human error from visual inspection when assessing steel towers’ deterioration levels.[2]

[1] https://www.sra-tohoku.co.jp/ai-pkg/

[2] http://www.tohoku-epco.co.jp/news/normal/1204579_1049.html

[Japan] Tokyo Electric Power Company Holdings Announced Three Electricity Rate Plans in Hokkaido, Hokuriku, Chugoku, and Shikoku regions

Tokyo Electric Power Company Holdings (TEPCO), headquartered in Tokyo, announced on November 12, 2019, that it would expand its electricity rate plans to include residential customers outside of its existing service areas in regions such as Hokkaido, Hokuriku, Chugoku, and Shikoku regions from November 13, 2019.

TEPCO provides residential customers with three electricity rate plans. The Standard S and Standard L plans are available in the Hokkaido and Hokuriku regions, and the Standard A plan is available in the Chugoku and Shikoku regions. When compared to the existing prices provided by the incumbent utility companies in each area, the TEPCO rate plans will save each customer about 3% of their electricity costs.

In Japan, the retail electricity market has been completely deregulated since April 1, 2016, and consumers—including households and businesses—are allowed to freely choose their retail electricity providers and rate plans.  Since then, TEPCO has been providing discount electricity rate plans for residential customers in the Chubu and Kansai regions, and in the Tohoku and Kyushu regions since August 2019. Currently, the company offers services nationwide except in Okinawa Prefecture.[1]

[1] http://www.tepco.co.jp/ep/notice/pressrelease/2019/1520325_8664.html