Chubu Electric Power Co.,Inc. | President’s Press Conference on JERA Business Plan - Press Releases and Other Company News(2016)

Press Releases and Other Company News President’s Press Conference on JERA Business Plan

February 10, 2016

Tokyo Electric Power Company
Chubu Electric Power Co.,Inc.

Introduction

  • Tokyo Electric Power Co., Incorporated (“TEPCO”) and Chubu Electric Power Co., Inc. (“Chubu Electric Power”) informally decided on the new corporate structure of JERA Co., Inc., a company co-financed by the two companies. I would like to talk about expectations that we have for JERA as their parent company.

The recent turn of tides

  • The environment around energy businesses both in Japan and abroad is experiencing a significant change. Amid the launch of full household and other electric power retail deregulations starting this April, many companies have expressed their intentions to enter the market; the competition is expected to intensify with the various services and rate menus that are being presented. Under these circumstances, we are expecting to see a further heightened demand from domestic customers for internationally competitive electric power and gas supplies.
  • The upsurge in crude oil prices, resulting from the competition between emerging countries for natural resources, saw a turning of the tide. Resource prices temporarily dropped to under-30-dollar levels and have been fluctuating significantly since the beginning of this year. The outlook of future fuel prices remains extremely unclear, and we therefore must look into fuel supply schemes that can cope with major price movements.
  • Turning to the international community, the Paris Agreement, which will serve as a new international global warming framework from 2020 and onwards, was adopted at COP21. Japan set its goal to reduce CO2 emissions by 26% in FY2030 from FY2013 levels, and this illustrates the nation’s growing responsibility for the global warming issue. We as electric utilities must make all-out efforts to fulfill our own goals of cutting down 35% in FY2030 from FY2013 standards.

 

JERA’s role (expectations)

  • In light of the ever-deepening uncertainty of the energy market outlook in Japan and abroad, JERA is required to scale up the corporate values of TEPCO and Chubu Electric Power by offering stable supplies of internationally competitive electric power and gas on a continued basis. Moreover, JERA must live up to its international responsibilities for the environment.
  • In other words, I am expecting JERA to consistently take on the exceedingly difficult challenge of both achieving the three “E”s, namely energy security, economic efficiency, and environmental protection, and also refining TEPCO and Chubu Electric Power’s corporate values.
  • More specifically, we can enhance competitiveness and reduce environmental burdens if JERA carries replacements forward by harnessing the world’s highest-level technologies and knowledge within the domestic power generation business field, while having parent companies decommission and shut down aging thermal power facilitie
  • In terms of fuel supplies, having JERA apply its trading capabilities and broaden its procurement scale to supply fuel in a more stable, economic, and flexible manner, while having the parent company take full advantage of the flexibility to increase LNG or reduce oil consumption, would scale up operation-related competitiveness and lighten the environmental burden.
  • We as a parent company would like to back up JERA’s efforts of internationally transferring Japan’s first-rate environmental technologies, as well as supporting the economic development of fast-growing emerging countries by rolling out power generation or energy infrastructure businesses abroad.
  • The JERA business plan, which would subsequently be announced, thoroughly incorporates the parent companies’ expectations that I have referred upon.  
  • I look forward to JERA steadily making this business plan into reality, and also encourage them to further hone their independence to shape their own business model that enables sustainable development amid environmental changes.