TOKYO -- Tokyo Electric Power plans to start buying and selling electricity on Europe's wholesale markets, seeking out new business opportunities overseas to help overcome the lingering effects of the 2011 earthquake and tsunami disaster.
As a first step, the Japanese utility will team with Nagoya-based NGK Insulators to form a joint venture in the U.K. They will make large-scale power storage facilities and buy up excess power at night from manufacturers and others with generation capabilities, store it, and then sell the electricity during the day when supply is tight.
Tepco halted overseas investment in the wake of the March 2011 disaster that devastated its facilities in Fukushima. But it has more recently resumed efforts in foreign markets and plans to bring a coal-fired plant onstream in the Philippines as soon as 2017. Success in the U.K. could lead Tepco to enter wholesale power markets in other places like France and Germany as well.
The utility plans to have its electricity transaction business in the U.K. up and running in fiscal 2016. The country aims to generate 30% of its power from renewable sources by 2020. But wind, solar and other renewable sources cannot ensure a steady supply, meaning demand will likely be high for excess power in times of insufficient supply. Tepco sees considerable profit potential as a middleman helping to connect supply with demand.
Tepco has been developing power storage cells in collaboration with NGK and intends to use them in Europe. The experience the company gains in the U.K. could come in handy in Japan, which is considering setting up its own real-time wholesale market.