The retail electricity market was deregulated in Japan in April 2016. Since then, a lot of activities have taken place in the Japanese market.
Prior to deregulation, 10 regional utilities were the sole electricity providers for their areas. But as of Sep 11th 2017, 1013 companies have registered as electricity providers.
According to the Ministry of Economy, Trade and Industry, Tokyo Electric Power Company (TEPCO) lost more than 1.6 million electric customers and Kansai Electric lost more than 600,000 electric customers as of March 2017.
Under these circumstances, Japanese utilities started to seek new business opportunities. As a part of these efforts, they started to seek innovative startups to collaborate or invest in.
TEPCO is ahead of the field. They formed an internal venture capital arm and have already invested in several companies. In 2016, TEPCO invested in United Wind, a small-scale wind turbine startup, and Via Science, an AI based software company. In 2017, TEPCO also invested in energy storage company Moixa and Conjoule, which developed peer-to-peer energy trading platforms using blockchain.
TEPCO also formed an accelerator called Free Electrons with other 7 utilities. This April, Free Electrons selected 12 energy related startups to support out of 450 applicants. TEPCO also recently held an electricity load forecasting technology contest, which welcomed participation by startups.
Other utilities are also following TEPCO. This April, Chubu Electric announced a collaboration with a Silicon Valley based energy management startup, Bidgely. Osaka Gas opened an office in the Plug & Play Tech Center in Silicon Valley and is looking for opportunities to collaborate with Silicon Valley and other US-based startups. Tokyo Gas and Kyushu Electric formed their own accelerator programs by collaborating with a startup called Creww, an open innovation platform provider in Japan.
Japanese utilities are very active recently and thinking about new business models seriously. It is a sign that the electricity market deregulation started to change the utility mindset. In the future, new technologies may thrive in Japan as the Japanese electricity system transforms.
