Tokyo Electric Power Co. is seeking to expand operations abroad to diversify amid a power market shake-up at home.
Japan’s biggest utility faces a fully liberalized power market from April and the prospect of new entrants encroaching on its base of about 29 million customers. Tepco expects to make up for lost customers by expanding into Japan’s other regions and considering opportunities abroad, according to President Naomi Hirose.
“We have 100 percent of the market share in our area, so when it liberalizes, we can’t go to 101 percent,” Hirose said at a press briefing in Tokyo on Friday. “We must expand the overseas business.”
Tepco has another reason for looking overseas. Japan’s electricity use is falling as the population declines and customers cut usage. The nation consumed about 806 terawatt-hours of electricity from its 10 regional power utilities in 2015, the lowest since 1998, according to data from the Federation of Electricity Power Companies of Japan.
Tepco’s sales will probably fall 18 percent between the fiscal years ending March 31, 2015, and 2017, according to the average estimate of five analysts compiled by Bloomberg. The company also hopes to boost revenue by entering the gas-retail market when it liberalizes in April, 2017.
Tepco has investments in power projects in countries including Taiwan, Thailand and Indonesia. Revenue from Tepco’s overseas power-producing business increased to about ¥100 billion in the last fiscal year ended March 31, a threefold expansion from a decade earlier, according to a company presentation dated April 28.
The company also consults on overseas projects, ranging from technical support to assisting with electricity savings, according to its website. Revenue from its overseas consulting services was ¥1.11 billion last fiscal year.