Kansai Electric Power Group Overview

Value Creation Story

Medium-term Management Plan

Business Overview

Foundation to Support Value Creation

Financial and Corporate Information

Message from the President

In order to recreate ourselves into a corporate group worthy of
the trust and needs of our customers and society, the entire
Group will unite to make a full-fledged commitment to reform.

Nozomu Mori
Director, Representative Executive Officer, President■ Introduction
Since the cash and gift receiving incident uncovered in 2019, theCompany has been promoting a number of initiatives, including
governance reforms under a new business management system thatincorporates external and objective perspectives. The Group, however,has faced a series of inappropriate compliance-related incidents whichhave greatly undermined the trust that customers and society haveplaced in us. These incidents include the revelation in December 2022
that the Company accessed and used information on customers who had
contracts with other retail electric power companies, and theacknowledgment by the Japan Fair Trade Commission in March 2023 that
there had been acts of the Company against the Anti-Monopoly Act.
To prevent these kinds of incidents from occurring again in the future,
we will not only enhance our education and training programs, but also
fundamentally strengthen our internal controls, while making every effort
to cultivate an organizational climate in which everyone in the Group can

Kansai Electric Power Group Integrated Report 2023

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Kansai Electric Power Group Overview

Value Creation Story

Medium-term Management Plan

Business Overview

Foundation to Support Value Creation

Financial and Corporate Information

Message from the President

openly discuss their thoughts and observations with one
another. The management, including myself, will take thelead in implementing these reforms and will make every
possible effort to restore the Group to be truly committed tocompliance.
At the same time, responding to changes in our businessenvironment is also an urgent task. Since 2022, the outlookof the energy market has remained uncertain due to soaring
resource prices with the situation in Ukraine and growing
uncertainty of securing resources. In this environment, theGroup will continue to take all possible measures for facility
maintenance and fuel procurement and fulfill its role ofproviding a safe and stable supply of energy to support
people’s lives and the economy. Furthermore, to achievesustainable growth of the Group, we will take up thechallenge of achieving zero carbon emissions and creating
new value and services.

■

Actions under the Medium-termManagement Plan (2021-2025)

In February 2021 we established the Kansai Electric PowerGroup Zero Carbon Vision 2050, with a view to achieving asustainable society and in order to accelerate ourdecarbonization initiatives even more. In addition, in Marchof the same year we formulated the Kansai Electric PowerGroup Medium-term Management Plan (2021–2025), a fiveyear action plan, to overcome fierce competition andachieve our sustainable growth.

Kansai Electric Power Group Integrated Report 2023

Under the plan, we continue delivering new value not
only in our core business fields of energy, transmission &distribution, information & telecommunications, and life/
business solutions, but also in wide-ranging fields around or
between these business domains. Our aim is to provide aplatform that offers various forms of infrastructure andservices, and to contribute to the realization of a moresustainable society.
In financial terms, we have set the following targets:• Minimum annual average for ordinary income of 100 billion
yen for the three fiscal years 2021–2023, and 250 billion yen
for fiscal 2025;• Free cash flows of 200 billion yen or more in the final fiscal
year of the plan, and for the five-year total to be in the black.
In fiscal 2022, the Company posted an ordinary loss andother very adverse income and expenses due to concerns
about an economic recession caused by the situation in
Ukraine and other factors, as well as increased uncertainty inthe energy market. Although the energy market remains
uncertain in the current fiscal year, we will steadily work toachieve the goals set forth in the plan. To do so, we willcontinue to strive for thorough compliance as our mostimportant management task, while vigorously promoting
the three key initiatives of seeking to achieve zero-carbon
emissions, transforming into a service provider, and building
a robust corporate constitution. By fiscal 2025, the final yearof the plan, we are determined to put our Group on a stable
growth trajectory and take the next leap forward.

■Seeking to achieve zero-carbon
emissions: Energy Transformation (EX)With regard to the first key initiative of seeking to achievezero-carbon emissions, the Group has pledged to reduce theCO2 emissions associated with our business operations tozero by the year 2050 under our Zero Carbon Vision 2050,
and we are taking up the challenge of implementing a rangeof initiatives in the dual aspects of energy supply anddemand.
Although the energy market remains uncertain due tothe recent surge in resource prices caused by the situation in
Ukraine and other factors, the importance of decarbonization
efforts has not changed in the slightest.
In Japan, the Cabinet approved the Basic Policy for theRealization of GX (Green Transformation) in February 2023,
and the Japanese government has shown its resolve tovigorously promote efforts toward the realization of adecarbonized society. Based on our Zero Carbon Vision, wewill work toward the goal of zero carbon emissions for boththe Group and society as a whole.
We will mobilize Group resources to reduce CO2
emissions from power generation, making the most ofrenewable energy for use as a primary power source andmaximizing the use of nuclear power generation, and toreduce CO2 emissions throughout society at households andindustrial sectors through energy conservation andelectrification. By fiscal 2025, the final year of the plan, wewill achieve our goal of halving CO2 emissions from power
generation in the Group over the fiscal 2013 level, and we8

Kansai Electric Power Group Overview

Value Creation Story

Medium-term Management Plan

Business Overview

Foundation to Support Value Creation

Financial and Corporate Information

Message from the President

will make steady strides toward our next reduction target forfiscal 2030.

■Transforming into a service provider:
Value Transformation (VX)

The second key initiative, transforming into a service
provider, involves adopting a thoroughly customer-oriented
approach and addressing their needs and challenges inorder to transform ourselves into a corporate group that
continues to provide new value to our customers.
In the energy business, we will not only deliver electricity
and gas to residential and business customers, but also
create new value and services by providing services thatcombine energy with electrification devices, storage
batteries, e-mobility, etc., as well as VPP (virtual power plant)
business that effectively utilizes societal resources. We arealso developing businesses in a wide range of areas outsideof energy, including data center operations, agriculture andfood, while leveraging the strengths of our core business.
We will continue to discover business opportunities indiverse fields and will further accelerate our transformation
into a service provider by focusing our energies on creating
unprecedented and appealing value and services.

■

Building a robust corporate constitution:
Business Transformation (BX)■

Zero Carbon Vision 2050 and Zero
Carbon Roadmap

The third key initiative, building a robust corporate
constitution, is to establish a sound corporate structure in
the ongoing challenging business environment. To
accomplish this, we are reforming our cost structure,transforming our work through the use of digital technology,
and changing the way we work in all of our business activities.
In cost structure reform, in addition to working to reduce
repair costs by utilizing value analysis and other tools and to
improve the efficiency of power supply and demand
operations, we are working to strengthen our human capitalbase through investments in a digital transformation (DX)and reforms in work styles. We will continue to steadily
promote these initiatives to build a robust corporate
constitution.

In the Kansai Electric Power Group Zero Carbon Vision 2050,
we have declared that we will reduce overall CO2 emissions
that accompany our business activities to zero by the year
2050. In March 2022, the Group formulated a Zero Carbon
Roadmap clearly outlining the path to achieving this vision,and by promoting the initiatives set forth in the roadmap,
the Group aims to reduce CO2 emissions from powergeneration by half (reduction of over 25 million tonnes) by

fiscal 2025 compared to fiscal 2013, and to keep our CO2
reduction rate at the industry-leading levels toward fiscal
2030.
In the area of energy supply, we have brought online allseven reactors in our nuclear power stations for nuclear
power generation, an important non-fossil energy source.
Maintaining the safe and stable operation of our nuclear
power stations, we are accelerating the development of
renewable energies in cooperation with other operators inJapan and overseas, with the goal of developing 9 GW scaleof cumulative capacity by 2040. For thermal powergeneration, we are studying the feasibility of co-firing andexclusive firing of zero-carbon fuels such as hydrogen. Weare also conducting a technological evaluation of CCUS* forits future introduction, by carrying out CO2 separation andrecovery tests at the Maizuru Power Station and cooperating
in demonstration tests for CO2 marine transport.
Regarding hydrogen, which is expected to be a nextgeneration fuel for power generation, we are engaged invarious studies and demonstrations of its production,transport, and sale to customers. In the Himeji area, in orderto establish a large-scale hydrogen supply chain, we will
participate in overseas hydrogen production projects andstudy the feasibility of establishing a hydrogen receiving andstorage base, as well as discuss and coordinate with local
governments and neighboring companies with whom we
may have opportunities to work together. These efforts willfurther accelerate our consideration of hydrogen utilization,with the aim of achieving a 30% share of the national market
by 2050 in terms of volume handled.

* Carbon dioxide Capture, Utilization and Storage, where CO2 is recovered from exhausted gases, stored, and reused in fuel production, etc.

Kansai Electric Power Group Integrated Report 2023

9Kansai Electric Power Group Overview

Value Creation Story

Medium-term Management PlanBusiness Overview

Foundation to Support Value Creation

Financial and Corporate Information

Message from the President

Moreover, the Group will contribute to reducing CO2
emissions of customers and society.
We promote electrification and energy conservation
among our customers, not only in the home, but in a wide
range of sectors, offering solutions in the use of renewableenergy sources such as corporate PPA* and battery storage,
and working to offset emissions with zero-carbon electricity
through CO2 -free menus. We are also strengthening ourefforts to electrify the mobility sector, where the use ofelectricity has been limited in the past. By working together
with customers and society, we aim to reduce CO2 emissions
by more than 7 million tonnes by fiscal 2030.
For these initiatives, we must be bold, work tenaciously,and even more than that, create epoch-making innovations.
Along with concentrating and demonstrating the Group’s
strengths, we will accelerate our initiatives toward carbon
neutrality while seeking to collaborate with all ourstakeholders, including customers, business partners, andlocal governments. As a leading company in zero-carbon
energy, we are committed to achieving a decarbonizedsociety by 2050.

■ Management philosophy in practice

become and to revise the basis of our actions and decisions
so that we can grow as a corporate group that is both trusted
and needed by our customers and society as a whole.
The new management philosophy comprises two parts:
our Purpose and our Values. The former details our Purposeof Serving and Shaping the Vital Platform for a Sustainable
Society for the benefit of our customers and society, so as tocontinue to meet customers’ and society’s current
expectations and to create those of the future. In the latter,
the Values that we hold dear are Fairness, Integrity, Inclusion,and Innovation.
In response to the series of improprieties, our Group is
now undertaking thorough measures to prevent theirrecurrence with the aim of rebuilding ourselves into a
corporate group that truly upholds compliance. In doing so,
we believe it is important that each and every member of
the Group firmly understands and practices thismanagement philosophy in their daily work.
Our management philosophy serves as a compass forcompliance with laws and regulations, rules, social norms,and social conventions. In order to ensure that everyone in
our Group puts this philosophy into practice in their ownwork, I myself and the management will take the lead intenaciously promoting the philosophy throughout theGroup.

■ Conclusion
Since our establishment in 1951, the Group has surmounted
many challenges by leveraging our greatest strength: unityand solidarity. In response to the series of improprieties, theGroup will make a collective effort to reform and reclaim ourstatus as a corporate group that is both trusted and neededby our customers and society. In order to achieve sustainablegrowth in an increasingly challenging business environment,
we are determined to become a corporate group that gives
the opportunity to every one of our 30,000 employees todemonstrate their abilities to the fullest and to work withenthusiasm.
We are committed to doing our very best to live up to theexpectations of our stakeholders, and we appreciate yourcontinued and invaluable understanding and support for us.

Taking into account such factors as the cash/gift receiving
incident, we renewed our management philosophy in March
2021. We recognized the need to return to what we aspire to* Power Purchase Agreements or PPA, long-term power purchase agreements that are concluded directly with power generators by companies and other entities that consume electricity.

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