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INTERNATIONAL > East Asia & Pacific

Japan utilities team up to build power grids in Asia

  • June 29, 2018
  • , Nikkei Asian Review , 1:34 a.m.
  • English Press

Jun Iiyama and Yuki Fukumoto, Nikkei staff writers


Japanese regional utilities Tokyo Electric Power Co. Holdings and Chubu Electric Power will launch a joint venture in Singapore next month to capitalize on booming power grid opportunities in Asia.


The companies are looking to meet demand for electricity grids in Cambodia, the Philippines and other parts of Southeast Asia, particularly in tourist hot spots. They intend to use their equipment’s reliability as the main selling point in parts of Asia where grids are prone to blackouts. They will also offer outage recovery training for workers.


It marks a turning point for Japanese power electricity companies that have been forced to play defense after the Fukushima Daiichi nuclear disaster in 2011 led operators to shut most of the country’s nuclear power plants.


Tepco, through its subsidiary Tepco Power Grid, will provide more than 40% of the capital for the tentatively named Global Green Grid. Chubu Electric and ICMG, a Tokyo consultancy, will each hold 20% to 30% of the venture.


Tepco provides electricity to greater Tokyo and Chubu Electric delivers power to central Japan. Both are approaching the country’s other utilities to join the endeavor.


Japanese households experience fewer blackouts than other advanced economies. Tepco customers experience about six minutes’ worth of power loss a year.


The utilities want to take their technologies overseas and lower their reliance on Japan, where demand for power is falling.


The Japanese government has made infrastructure exports — especially nuclear power plants and highly efficient coal-fired power plants — a pillar of its economic growth strategy.


But the meltdowns at Fukushima Daiichi have left many wary of nuclear energy, while concerns about climate change have dampened demand for fossil-fuel power. Electricity distribution is seen as a more promising avenue for growth.


Power demand in Southeast Asia is expanding as economies grow. The International Energy Agency estimates that electricity consumption in the region will double in 2035 compared with 2016.


Tepco and Chubu Electric have been slow to tap into this demand. The two utilities have successfully participated in overseas power projects through 50-50 joint venture JERA, but Chinese and South Korean rivals have made deeper inroads into Asian markets.


Tepco Power Grid aims to triple revenue from operations outside of domestic power distribution, including its overseas business, to 100 billion yen ($908 million) in fiscal 2026.

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