#1 Deregulation of Electricity Retailing and the Challenge of Japan Electric Power Company - July 2000

With the partial liberalization of electricity retailing in 2000, Nippon Denryoku Co., Ltd. developed a new business of selling electricity using cogeneration systems. The founder, Katsuzo Iijima, was the first person to introduce cogeneration in Japan, and the company is reinventing itself based on his track record and beliefs. The company's business model is to install power generation equipment using diesel engines and other technologies on the client's premises and provide the power and heat energy, and its strength is that it can reduce the cost of conventional electricity by approximately 40%. In addition, the energy efficiency of cogeneration is extremely high at 70~80%, compared to 30% for conventional power systems, enabling significant cost savings for clients. Nihon Denryoku mainly targets hospitals and factories, and expects to achieve sales of 600 million yen by the end of the fiscal year, with the goal of further expansion and listing on the Tokyo Stock Exchange in the future.