Showa Shell Sekiyu K.K., the Japanese unit of Royal Dutch Shell PLC, plans to supply power to the country's retail consumers, making it the 23rd company to challenge the monopolies of Japan's regional utilities.
The nation's fifth-biggest refiner submitted notice of its intention to the trade ministry Wednesday, the company said in a statement to the Tokyo Stock Exchange.
In October, the Tokyo-based refiner joined the Japan Electric Power Exchange, enabling it to trade power.
Japan has partly opened up its ¥16 trillion power market since 2000 in an effort to break monopolies held by 10 regional power producers, including Tokyo Electric Power Co. Showa Shell, together with Tokyo Gas Co., is building a gas-fired power plant in Yokohama to sell electricity in the capital region.
"We will at first sell power produced at in-house power generators and bought on the bourse," the refiner said in the statement. "In addition to selling power to regional utilities, we can now sell electricity to end users."
The Yokohama plant will have a generating capacity of 1,200 megawatts and is slated to start operation by the end of 2009. Tokyo Gas owns 75 percent of the facility.
The 10 regional utilities account for more than 80 percent of the country's retail power sales, even after the government opened 63 percent of the market to competition.
Factories, government offices and supermarkets using more than 50 kw of electricity are able to choose their power suppliers. Deregulation of power wholesaling began in 1995, and retailing in 2000.