Chubu Electric Power has unveiled an ambitious long-term strategy to boost electricity sales outside its traditional service area by 14 times in a bid to become competitive in Japan’s newly liberalised market.
The company’s long-term management strategy, which was released last week, calls for electricity sales to reach 20 billion kWh per year outside the Chubu region, its traditional service area, by 2030, compared with just 1.4 billion kWh at present.
The figure of 20 billion kWh is equal to 16% of Chubu Electric Power’s current annual sales in the Chubu region, which comprises Aichi and several surrounding prefectures.
Electric Power, based in Nagoya City, Aichi Prefecture, central Japan, is the nation’s third biggest electric utility in terms of electricity sales volume, after Tokyo Electric Power Co. (TEPCO) and Kansai Electric Power.
Japan’s 10 major power companies have effectively monopolised their respective service areas for many years. Chubu Electric Power’s ambitious expansion plan comes ahead of the full liberalisation of the nation’s retail electricity market on April 1.
Households and small-lot business users will be allowed to choose their power suppliers freely. The retail electricity market for large-lot business users such as factories has already been liberalised.
Chubu Electric Power’s long-term management strategy also calls for achieving an annual operating profit of more than 160 billion yen (US$1.4 billion) by 2030 from its operations other than electricity sales in the Chubu region.
These operations include overseas power generation projects through JERA, as well as electricity and gas sales outside the Chubu region.
JERA was set up in Tokyo in April 2015 as a 50:50 joint venture between Chubu Electric Power and TEPCO to engage in the thermal power generation business.