World : Japanese power firms race to go digital as competition heats up in liberalized market

Domestic power companies are racing to introduce digital technologies, including the “internet of things” and artificial intelligence, to cope with a changing business environment.

Pressure to create new services is mounting amid intensifying competition following the April 2016 full liberalization of the retail electricity market and the growing use of renewable energy sources, including solar power.



Last summer, Tokyo Electric Power Company Holdings Inc. started a project to set up a peer-to-peer electricity trading platform together with German power firm Innogy SE. The platform allows participating individuals to directly sell their surplus solar power to local supermarkets and companies via transactions using smartphones.

The service is slated to begin in Germany as early as this month. The project aims to attract 10,000 individual and corporate subscribers by 2020.

The platform uses blockchain, the core technology that enables high security crytocurrency transations at low costs.

The two power firms will charge a commission for transactions on their platform. Tepco hopes to start a similar service in Japan within the next decade.

“We’ll prepare for risks involved with a rapid change in our businesses and also aim for growth at the same time,” said Shinichiro Kengaku, Tepco’s managing executive officer.

The concept of virtual power plants is another opportunity that firms are exploring. The plants connect solar panels and storage batteries at households and electric vehicles using “internet of things” technology to integrate them as a unified power supply system. The concept is expected to herald a drastic shift for the industry, which has long relied on the business model of supplying large amounts of power generated at large-scale thermal and nuclear plants.

Virtual power plants have already been put into practical use in the United States, Britain and Germany. Earlier this month, the South Australia provincial government and Tesla Inc. unveiled the world’s largest such plant project, involving 50,000 households.

In Japan, Tepco and Kansai Electric Power Co. are working together with Nissan Motor Co. to test virtual plants, while a similar alliance exists involving Chubu Electric Power Co. and Toyota Motor Corp.

Power utilities are also collaborating with home appliance and housing companies to explore new business opportunities utilizing emerging technologies.

Going digital will allow power firms to “meet various customer needs,” at a time when electricity demand is expected to fall due to the country’s declining population, said Satoru Katsuno, chairman of the Federation of Electric Power Companies of Japan.


Source :

Smart Grid Bulletin July 2019

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