TEPCO New Business Strategy Ahead of Electric System Reform in Japan Hiroshi Yamaguchi Executive Vice President TEPCO
1. Major Changes After Great East Japan Earthquake 2 Changes in generation mix Increase in generation cost Limitations in ensuring enough supply to meet the given demand Increase in public need to choose type of electricity and its supplier Necessity of the optimization of supply and demand over areas [ 万 kw] 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Peak Demand 59,99GW PV Pump-up Hydro Oil LNG, LPG Nuclear July 23, 2010 Coal 1 3 5 7 9 11 13 15 17 19 21 23 Pumped Storage Hydro [ 万 kw ] 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 August 15, 2014 Peak Demand 49,80GW PV Pump-up Oil LNG, LPG Coal 1 3 5 7 9 11 13 15 17 19 21 23 Pumped Storage
2. Power System Reform Program in Japan 2013 1 st Step 2 nd Step April, 2015 April, 2016 3 rd Step April, 2020 Cabinet Decision on the Policy on Electricity System Reform Preparation of OCCTO establishment Establishment of the OCCTO Preparation of the details for retail liberalization NOW 1 Full retail liberalization Activation of the wholesale electricity market Preparation of the behavior code for T&D sector, and the rules for coordination between generation sector and T&D sector OCCTO: Organization for Cross- Regional Coordination of Transmission Operators Preparations for organization shift 2 Legal unbundling of transmission and distribution sector 3 3
3. TEPCO New Business Strategy (1) Challenge to achieve new electricity utility model adaptable to Electricity System Reform Basic policy of business operations Responsibility Competitiveness Holding company system ahead of electricity system reforms Tight collaboration between holding company and subsidiary companies Create new business model for each company that is a leader in the era of competition and establish revenue base Run competitive business surpassing more than conventional ways of thinking and business Establishing revenue base For Fukushima revitalization Improving corporate value of TEPCO Group Returning actual merits to the public 4
3. TEPCO New Business Strategy (2) Shift to holding company system in April 2016 Holding Company Launching in FY2016: Holding Company System Fukushima daiichi Decommissioning company Nuclear power Department Corporate Fukushima Revitalization Compensation Reconstruction support Management assistance Shared services Shared services company Power generation operational company Transmission and distribution company Retail sales operational company (retail sales) Each company to be licensed (Thermal) (T&D) (Retail sales) 5
4. Toward a Futuristic Infrastructure Company By proposing the most efficient energy use for each customer and providing services; Smart Community Energy conservation/low cost/low carbon Citizens Companies Local governments Safety/Security/ Comfort Households Gas/Thermal/ Water Enhancement of contact points with customers (Web site, Smart meter, Smart grid, etc.) Total Energy Solution Renewable BCP Lifestyle Platform Flexible / Efficient /Resilient Energy Infrastructure Customer side Grid side 6
5. Moving Up Installation of Smart Meters Installation Schedule Advanced services using meter data Smart meter B-route to communicate between smart meter and HEMS Home appliances HEMS Devices for visualizing energy consumption 7
Creation of New Services with Meter Data We use proven information infrastructure in sharing and processing a great deal of information. Establishing a flexible infrastructure system makes it possible to introduce new services in the future. Planning for implementation Remote meter reading Remote connection/ disconnection Remote contract changing Possibility of implementation in the future Demand Response Visualization of energy consumption Safety confirmation service for elderly people Flexible Infrastructure Future enhancements Highly developed Demand Response Next generation cloud-based HEMS service Simulator on voltage of distribution network Upper layer app Service delivery infrastructure Flexible addition of new services Smooth introduction of a wide variety of new services through flexible systems MDM Data storage CIM MDM Data acquisition New services MAM New services NM GIS Authentication Information cooperation infrastructure New services Flexible addition of new services PPS, other companies PPS, other companies PPS, other companies 8
6. Provision of Added Value for Lifestyles and Households (1) TEPCO s Web Services Denki Kakeibo-Electricity Housekeeping Book Can check monthly electricity usage and bill (kwh) 1,000 800 (ご 使 用 量 の 比 較 ) 今 年 のご 使 用 量 前 年 のご 使 用 量 同 じご 契 約 容 量 のお 客 さまの 平 均 ご 使 用 量 Can get eco-friendly tips fitting lifestyle お 客 さまのご 家 庭 の 一 日 の 電 気 の 使 い 方 (イメージ) 600 400 200 ( 円 ) 6 月 7 月 8 月 9 月 10 月 11 月 12 月 1 月 2 月 3 月 4 月 5 月 Can utilize an estimation tool to choose the cheapest rate menu Can request an application for bank transfer or credit card payment 9
6. Provision of Added Value for Lifestyles and Households (2) Provision of even greater added value for lifestyles and households throughout customers life events Self Reliance Marriage Home Purchase Home Renovation Second Life Smart Electrification Solutions Residential Solutions Smart meter Energy Information Lifestyle Information (Electricity Housekeeping Book) Lifestyle platform 10
Thank you for your attention! 11