Kansai Electric, Tokyo Gas form united front to tackle market deregulation
TOKYO -- Kansai Electric Power and Tokyo Gas will share supplies of natural gas and know-how in power plant operation to help each other as market deregulation exposes them more to competition from rivals.
Japan's retail market for electricity was fully deregulated April 1. The same will happen with the sale of natural gas to households in 2017.
The partnership announced Monday by the two utilities seeks to ensure a stable supply of liquefied natural gas and improve business efficiency. Tokyo Gas can supply gas to Kansai Electric in the summer, when demand for electricity rises. In the winter, the Osaka-area electric utility can return the favor.
The partners will exchange expertise in LNG power plant operation. As a start, some personnel from Tokyo Gas' power generation business will receive training under a Kansai Electric program this summer.
The interregional alliance -- greater Osaka has its own local gas utility -- had been in the works since December 2014. The two companies have been procuring LNG from a shared source.
Their partnership may eventually expand to power plant construction and joint participation in overseas projects.
Alliance-building among utilities looks likely to continue in the era of energy market deregulation. Tokyo Electric Power Co. Holdings, or Tepco, and Chubu Electric Power, which supplies the greater Nagoya area, formed the 50-50 joint venture JERA last spring to cooperate in such endeavors as fuel sourcing.