Business / Corporate

Chugoku Electric mulls selling power outside service area

Kyodo

Chugoku Electric Power Co. is considering selling electricity outside its service area like other utilities as Japan moves to fully liberalize its power market around April 2016, company sources said Saturday.

After meeting demand within its service area, the Hiroshima-based company is expected to sell the excess generation capacity that remains, which may be around several hundred thousand kilowatts, mainly in the neighboring Kansai region and other areas of western Japan.

This summer, Chugoku Electric supplied Kansai Electric Power Co. and Kyushu Electric Power Co. with up to 480,000 kw in total to help them address power shortage concerns stemming from the idling of all nuclear power plants in the wake of the 2011 Fukushima disaster. Nuclear power had provided a third of Japan’s electric power before the crisis.

Chugoku Electric’s move is likely to intensify market competition as other regional utilities also plan to expand sales beyond their current service areas.

Full liberalization of the nation’s electric power market will bring an end to the 10 regional utilities’ monopolies on supplying power to households and small-scale stores in defined service areas.

Energia Solution & Service Co., a wholly owned subsidiary of Chugoku Electric, is likely to be the entity that sells electricity beyond that utility’s current service area. Energia has already notified the Ministry of Economy, Trade and Industry that it plans to start business as an electricity supplier.

Chugoku Electric will now consider such details as where and how much power it will sell through Energia, the sources said. As Chugoku Electric’s service area is mature and includes no huge market like the Tokyo metropolitan area, the utility wants to explore a new source of income, its president, Tomohide Karita, has said.

Coronavirus banner