As Japan’s largest power company TEPCO is presently supplying electricity to 30 million customers, other large utilities (such as Kansai Electric Power or Chubu Electric Power) and new market entrants would try to take as much as customers away from TEPCO, after the power market is liberalized in April 2016. Nevertheless, TEPCO is now facing with difficult conditions, such as compensatory payment, refunding and decommissioning of Fukushima Dai-ichi Nuclear Power Plant Accident, and uncertain restart of Kashiwazaki-Kaliwa Nuclear Power Plant unit 6・7. For those reasons, TEPCO is projected to face with tough corners after April 2016.

In the opening sentence, Ms. Sato strongly and clearly stated that TEPCO is committed to completely restore all concerned parties with Fukushima Nuclear Power Plant Accident. (As Ms. Sato was previously in charge of compensation for Fukushima Accident, her words looks undoubtedly credible.)

And with regard to the liberalization of electric power market, she described “The quality of electric power is same, so electric power companies which can provide comprehensive energy solutions can only survive. Price competition would not become the maximum element at new market.” Subsequently she introduced TEPCO’s planned strategy, for instance Smart House, district heating and cooling, B to B service website “TEPCO Business Platform”, B to C service website “Residential House Solution”. For example, they can advice customers who are using refrigerator for 10 years that they can reduce electricity cost by replacing to newest models.

Namely, we could learn that the market leader TEPCO is now preparing to play fair game with newcomers, not just beating them off with low prices. And Ms. Sato concluded her lecture with stating “We will never forget Fukushima. Along with the decommissioning, we are to support each customer though fearless innovation.”

To start with, `Prof. Nishimura pointed out that;

・Profitable customers are very limited
・No power market in the world is driven by jut price competition. Instead, the participants are struggling with non-exclusive items called “Bundling Service” such as electric power, gas, oil, communication, etc.

and he added that “The most profitable customer segment is the top 20 to 25 percent. Neither new comers nor regional power utilities can survive without these major clients.” He also pointed out that “The dominant competitors would be companies which have direct contact points with customer, namely gas, cable TV, mobile phone, internet providers”.

With refer to KEPCO strategy, he described that the flagship missions against the liberalized market is how to build the platform, as well as how to create value on the platform. In particular, they will renew their product line by adding gas, communication, energy conservation, and security services. Equally important, KEPCO will not only try to provide full service for customers, but they will also contribute to build low carbon society through improving energy efficiency.

To date they have secured more than 200 power sources, including their own power stations, and facilities of NTT Facilities, Tokyo Gas. While their main power supply is natural gas, they also use renewables such as hydro, solar, wind and biomass. Thereby, the major function of Ennet is to match these 200 supply with 20,000 demands at (almost) exact timing, (almost) exact volume and LEAST cost. Most importantly, their competitive service is based on the unique IT technologies which is clearly shown on their company name“Energy + Network = ENNET”.

For instance, despite 10% of power system costs 50 billion yen, they are used for only 2.5% in time length per year. Then, Ennet tries to cut the cost by shifting the demand out of peak. In this case, not only power company and customer but also SOCIETY can enjoy the benefit (Win = Win = Win) by their IT “Smart Service” technology.

While these Smart Services can dramatically reduce energy cost, Mr. Akiyama told us it is not easy to continue, mainly because the participation of customers is required to operate the system. In other words, Ennet is making effort to keep the customers interested in energy management. For example, they build in competition between participants, or they adopt bonus point system on saving energy.

Besides from asking customers to save energy, they have also started to cooperate with customers which operates co-generation plant. On this contract, Ennet can have access to additional power by controlling the output of plant. And they are also building smart communities with local governments.

Japan is to experience the deregulation of electric power market, following to a great sharp decline of nuclear power. And while the back ground is completely different, Lithuania is in the same process ahead of Japan.

At a time in the past , Lithuania was an exporter of electricity because we had Ignalina Nuclear Power Plant, the world’s biggest at that day. However, as the reactor of Ignalina was the same model with Chernobyl Nuclear Power Plant, many countries express big concern for severe accident. Furthermore, Russia stepped back from supporting the operation of Ignalina Nuclear Power Plant after the disintegration of the Soviet Union. For these reasons, unit 1 and 2of the Ignalina was closed down on 2005 and 2009 respectively. And since then, Lithuania became an importer of energy. As it was a threat against the independence and security of energy, this issue was given high priority at that time.

However, after the Lithuanian power market was liberalized, the price level of electricity has declined sharply, now our price level is the lowest in whole EU countries.

Now you can see Lithuania and Japan is both experiencing the steep decline of nuclear power and the deregulation of electric power. I hope we can share our knowledge and join hands to overcome our challenges.

The electric power system is composed of hardware (generators, transformers, transmission line….) and software (control system), and the importance of software is quite often considered less serious. However, we should underscore that in case power plants generate huge power, nobody can use electric equipment properly when the demand and supply of electricity don’t meet. In other words, power companies should generate the needed QUANTITY of electricity at the needed TIME in every moment.

Before the liberalization of power market, the one and only dominant power company was both the supplier and operator of all electricity in Japanese power grid (Uni-directional). So it was a very favorable circumstance for them to stabilize the frequency and voltage. However, after the market was liberalized, many new power companies entered and un-controlled power began to flow into the grid (Bi-directional). Even worse, as most of the new player are not responsible for power transmission, the incentive to invest for power grid stabilization is predicted to decline sharply.

Hence, it would be substantially difficult to operate the power system compared with the age when the generation, transmission and distribution is vertically integrated. And as the investment for power system is sure to become insufficient, all players (government, power companies, grid operator) should struggle to stabilize the power supply. And of course, TOSHIBA will also contribute as a supplier by developing advanced technology with affordable cost.

Among all, here we would like to introduce “Toshiba Storage Solution” as one particularly notable power grid technology. We have developed various products, such as Grid Stabilization、Demand Leveling、EV Charging, PV System, Grid Stabilization, Business and Households. And we are also trying to take the initiative of international standard of power storage.

For instance, lithium-ion battery has been paid great attention as an epoch-making storage technology. It is true that lithium-ion battery is capable to store high energy density power, but on the other hand, it is not suitable for large power usages. In line with all other leading companies, TOSHIBA as a supplier will continue challenge to develop state-of-art power technology.