27

Business overview

Electric power business

ELECTRIC POWER
BUSINESS
OutlineSince 2000, when the Tokyo Gas Group began to generate andsupply electricity, it has engaged in a comprehensive range ofbusiness activities that extend from fuel procurement to power
generation and sales. Among the new entrants to the sector
following the start of deregulation, we own one of the largest power
stations in the Greater Tokyo region, and sell generated power towholesale and large-lot customers. With the full deregulation of theelectric power retail sector in April 2016, we also began sellingelectricity to residential and commercial customers.

Some of the largest-scale, most highly-efficient power sourcesamong the new power suppliers in the Greater Tokyo region
Community-based sales network (operated by Tokyo Gas Lifeval,
Enesta, etc.) and over 11 million customers as a baseStrengths

Decline in price competitiveness of natural gas thermal
power generation, associated with changes in prices of raw
materials and fuels

Risks

Potential damage to power generation facilities and supply
issues of raw materials and fuels, stemming from a largescale disaster

Power source infrastructure, operational know-how and systems
aligned with both wholesale and retail sales

Net sales and Segment Profit(¥ billion)

400

Net sales (LH)

As of the end

1.774 million of March 2019
Electricity Sales
15.48 billion kWh FY2018
VolumeFY2018
Segment Profits ¥10.1 billion

Number of RetailCustomers

Electricity Sales Volume and Number of Retail Customers(¥ billion)

Segment profit (RH)

30.0(billion kWh)

20

Electricity sales volume (LH)

Number of retail customers (RH)

(million)

3.00

300

22.5

152.25

200

15.0

10

1.50

100

7.550.75

0000

2014.3 2015.3 2016.3 2017.3 2018.3 2019.3 2020.3

2014.3 2015.3 2016.3 2017.3 2018.3 2019.3 2020.3(Planned)(Planned)

The era of single-source providers of electricity and gas
For many years, customers in Japan were only able to buy electricity
from electric power companies, and gas from gas companies. With
the full deregulation of the electric power and gas retail markets,
consumers in Japan can now purchase both electricity and gas
from a single supplier, just as in the EU and the US.
Based on this, the Tokyo Gas Group will aim to expand its
energy business through the proposal and deployment of optimalenergy systems.

Full Deregulated Market of the Electricity and Gas
Number ofcompanies*Approximate potential Approximate market
customers (million)
size (¥ trillion)

1085

8.0

Within TEPCO’s
domain

29

2.8

203

26

2.4Electricity

City gas* Former general electric power operators and former general city gas operators* From materials officially announced by the Ministry of Economy, Trade and Industry

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TOKYO GAS INTEGRATED REPORT 2019

Kiyohara
Industrial Park

Hitachi LNG
Terminal

The Tokyo Gas Group launched its electric power business in the year
2000. Seizing the opportunity of the full deregulation of the electric
power retail market in 2016, the Group expanded its sales toresidential and commercial customers, in addition to the existing
wholesale segment, selling an electricity volume of around 15.5 billion
kWh in fiscal 2018. This volume is equivalent to around 5% of total
demand in the Greater Tokyo Area. By 2020 we plan to expand thisvolume to 31.0 billion kWh, equivalent to around 10% of total demandin the Greater Tokyo Area.

Moka Power Station(Kobelco Power Moka)(Scheduled for 2019)

Ibaraki Line

(Scheduled for FY2020)

Kashima
Waterfront Line
Kawasaki Natural
Gas Power
Generation Co., Ltd.

Ohgishima LNG
Terminal/Ohgishima
Power Co., Ltd.

Chiba-Kashima
Line

Negishi LNG
Terminal

Sodegaura LNG Terminal

Tokyo Gas Baypower Co., Ltd.

Tokyo Gas Yokosuka
Power Co., Ltd.

(billion kWh)

Selling approximately 5% of electricity
demand in the Greater Tokyo Area

Electricity Sales Volume

Achievements over the past three years
since the full deregulation of the electric
power retail market
We have marketed and provided the “Always Plan,” a one-stop
package that delivers gas, electricity, and various other services, tosupport our expansion into the electricity retail market. As of March31, 2019, we are now supplying electricity to 1.77 million customers.
For fiscal 2018, we held the largest market share in low-voltage
services among new electric power market entrants for the third
consecutive fiscal year. Announced in October 2017, our management
plan for fiscal 2018-2020, GPS2020, envisioned that the Tokyo Gas
Group would deliver its electricity to 2.2 million customers by the endof fiscal 2020. However, in April 2019 we announced that we would
increase the number of our electricity customers to 2.4 million by theend of fiscal 2019. We are working to attain the target one year earlier.
We will continue to develop service options that many people willfind beneficial in an effort to gain more customers for our one-stop
service of supplying gas, electricity and other services.

Number of Retail Customers(million)403
2.4 million
Wholesale

30

Retail

31.0kWh

1.774 million
210

11.0kWh1112.0kWh
2.3
10.4

14.7kWh15.5kWh

4.6

6.6

10.1

8.9

2.20 million

1.13 million

19.9kWh20(2021.3)

Target at the time offormulation in 2017

0.667 million

1000

FY2015FY2016FY2017FY2018FY2019FY2020(Planned) (Planned)

2016.32017.32018.32019.3

Initiatives Towards Achieving the Sustainable Development Goals (SDGs)

Sustainable Development Goals
Helping to prevent global warming through power generation
With its high-efficiency gas-fired thermal power stations, adopting the latest cutting-edge gas turbine combined cycle
technology, and wind power generation facilities, Tokyo Gas is contributing to the prevention of global warming.
We have also decided to accept supply of electric power from Moka Power Station, which is currently under construction
by Kobelco Power Moka Inc., and are driving the development of renewable energy power sources such as photovoltaic
and wind power generation, such as through the signing of a capital partnership agreement with Shizen Energy Inc.

2020.3(Planned)

29

Business overview

Electric power business

Expand power sources
Prompted by the full deregulation of the electric power retail market
in 2016, Tokyo Gas began delivering electricity to low-voltage
residential and commercial customers, in addition to serving thewholesale market.
To accomplish this and match the growth of our sales stock with theaim of delivering electric power to 2.4 million retail customers by theend of fiscal 2019, we will continue to increase and expand ournetwork of Tokyo Gas-owned power sources. To meet our targets ofachieving an approximate total power output of 3.0 million kW byfiscal 2020 and 5.0 million kW in the next decade, we are developing
our own power sources while purchasing electricity from othercompanies through direct negotiations and from Japan ElectricPower Exchange.
It has already been determined that we will receive power from theMoka Power Station constructed by Kobelco Power Moka Inc. as well
as from the Tokyo Gas Group’s power stations.
In addition to our competitive natural gas-fired thermal powersources and base load supply sources, we will also promote
initiatives aimed at expanding renewable power sources, in order toaddress the issue of preventing climate change.

Expansion of Tokyo Gas-owned power sources
Construction of the Moka Power Station (gas-fired power
generation, approximately 1.2 million kW, all to be purchased by theTokyo Gas Group) is progressing smoothly towards starting
operations in fiscal 2019. For the further expansion of powersources, we are considering the construction of natural gas thermal
power plants in Sodegaura City and in Ibaraki Prefecture.

Electric Power Expansion Plan
Own power sources (existing)
Own power sources (replacements, new)Alliance, market procurement

Moka Power Station’s
start-up of operations(1.2 million kW)

Approx. 3 million kW
1.6 million kW

FY2017

Own powersourcesTokyo Gas Baypower Co., Ltd.
Generation capacity0.10 million kW
0.1 million×1 unit

Aiming for the scopeof 5 million kW

Owned power

0.10 million kW

Start of operations 2003
Tokyo Gas interest 100%

FY20202020sTokyo Gas Yokosuka Power Co., Ltd.
Generation capacity

0.24 million kW
0.24 million×1 unit

Owned power

0.18 million kW

Start of operations 2006
Tokyo Gas interest 75%

Expand electricity sales to low-voltage customers
The Tokyo Gas Group has constructed a network with 11 million
customers through its city gas business. We will offer the mostsuitable energy for the actual use of customers and combinelifestyle-related services to improve value for economy, peace ofmind, simplicity and convenience.

Community-based sales network
The Tokyo Gas Group has established a community-based sales
network with around 180 outlets in the Kanto region (including
Tokyo Gas Lifeval, Enesta and Enefit), enabling us to tailor ourservices to fit the needs of individual customers. Through its 14,000
employees, Lifeval has built strong relationships of trust withcustomers. As the “face” of Tokyo Gas Group, Lifeval employeesinteract directly with customers and engage in a wide array ofservices ranging from the sale and maintenance of gas appliancesand opening/closing of gas fixtures when customers move house, togas appliance safety checks and gas meter reading.
In retail sales of electricity, too, through push-type marketingmaking effective use of such opportunities for direct contact withcustomers, we will continue to steadily accumulate more contracts
to enhance our customer base.
P31

Alliances with various industry partners
Tokyo Gas has formed business partnerships with a total of 48
companies (including wholesale customers such as gas business
operators and LPG vendors) regarding the sale of low-voltage
electric power. Through this network, we will continue to sellelectricity to customers in the Greater Tokyo Area.

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TOKYO GAS INTEGRATED REPORT 2019

Development of renewable energy sources
The Tokyo Gas Group has been working to secure renewable energy
power sources mainly for onshore wind power generation. In fiscal 2017,
we embarked on our activities for photovoltaic and offshore wind power
generation. We will accelerate joint project participation with business
partners in Japan and around the world in a bid to initially obtainrenewable energy power sources with an approximate output of 1 million
kW (of which 400 MW is in Japan and 600 MW is overseas).
Kashima Offshore Wind Power Generation (Conceptual drawing)

Renewable Energy Projects
Formed a business alliance with Shizen Energy Inc.
Feb. 2017

Apr. 2018

May 2018(with the objective of acquiring around 60 MW ofphotovoltaic solar power generation sources)

Invested in a large-scale project of the Kashima
Port offshore wind power generation plant.
Acquired a partial stake in SFK Power LLC.
(SFK Power has a total power generation capacity of 9.7 MW.)

Signed an agreement with Photon Japan LLC.
Jun. 2018(with the aim of jointly developing photovoltaic power stations witha power generation capacity of 30 MW)

Jan. 2019

Acquired Kyoto Ayabe Solar Power LLC (4.872 MW)

Apr. 2019

Joint renewable energy development project in Mexico
899 MW (including 450 MW owned by Tokyo Gas)

Conceptual drawing

Kawasaki Natural Gas Power
Generation Co., Ltd.
Generation capacity

0.84 million kW
0.42 million×2 units

Owned power

0.42 million kW

Ohgishima Power Co., Ltd.
Generation capacity

1.22 million kW
0.407 million×3 units

Start of operations 2008
Tokyo Gas interest 49%

Owned power

0.90 million kW

Start of operations 2010
Tokyo Gas interest 75%

Moka Power Station
Generation capacity

1.20 million kW
0.6 million×2 units

Owned power

1.20 million kW

All the power generated will be( purchasedby the Tokyo Gas Group. )Start of operation: 2019 or later (scheduled)Tokyo Gas interest: 0%
Unit 1: H2 of 2019 (scheduled)
Unit 2: H1 of 2020 (scheduled)Expand electricity sales to high-voltage and extra-high-voltage customers
Through the establishment of Ennet in 2000, as a joint venture with NTT FACILITIES and Osaka Gas, we have worked to expand our electricity sales.
In October 2015, we established Synergia Power Co., Ltd., as a joint venture with Tohoku Electric Power Co., Inc. As of April 2016, Synergia beganselling electricity to high-voltage and extra-high-voltage customers in the Kanto region, primarily in the Northern Kanto area.

Corporate name

Established

Main business

Shareholders

ENNET Corporation

July 7, 2000

Electricity trading and electricity
generation

NTT FACILITIES, INC. 32.7%, Nippon Telegraphand Telephone Corporation 18.3%
Tokyo Gas Co., Ltd. 24.5%, Osaka Gas Co., Ltd. 24.5%

Synergia Power Co., Ltd.

October 1, 2015

Electricity retail supply to high-voltage
and extra-high-voltage customers in theKanto region, mainly in its northern area

Tohoku Electric Power Co., Inc. 50%
Tokyo Gas Co.,Ltd. 50%