Following the deregulation of the wholesale electricity business (the business of supplying electricity to electric power companies), partial liberalization of electricity retailing began in March 2000.

Following the deregulation of the wholesale electricity business (the business of supplying electricity to electric power companies), partial liberalization of electricity retailing began in March 2000.
Major trading companies, foreign-affiliated companies, and others began to enter the electric power sales market.
The regional monopoly system of the electric power companies, which had been considered rock solid, is about to collapse.
However, it is also true that there are few new entrants to compete with the electric power companies, which have huge business bases.
In addition to having to pay the power companies for the use of their transmission lines, there are also many issues to be addressed, such as securing suppliers.
There is strong skepticism as to whether competition in the true sense of the word will ever begin.
In the midst of this situation, a venture company has emerged to challenge the electric power companies with its unique know-how.
Ltd. is taking on the challenge of selling electricity through its generation system.
We interviewed President Katsumi Iijima.
Pioneer in cogeneration
President Iijima is not a newcomer to the cogeneration business.
In fact, he is a pioneer in the field.
In fact, the first cogeneration system in Japan was introduced by Mr. Iijima.
While a student at Meiji University's Faculty of Engineering, he majored in power transmission and distribution optics.
He had the idea of supplying electricity by docking a generator to a car engine at that time, and even went to Germany to see the cogeneration system that was beginning to be put into practical use there.
After graduation, he worked for a printed circuit board manufacturer and a construction company before setting up his own business in 1984.
He had decided to start his own business based on the theme he had researched at university," said Iijima, and he went straight to cogeneration, which was then known as "private power generation.
He established Mitutoyo Engineering with 5 million yen in capital in Takasaki City, Gunma Prefecture.
The cost of electricity had doubled due to the oil crisis, and energy-saving fever was so high that it could be called a boom.
We were convinced that the demand for cogeneration systems, which are highly heat-efficient and can lead to substantial cost reductions, was bound to increase.
Preparations were ready.
However, when we explained the cost savings, they did not take us seriously, and some of them even said, "The power company will scold us if we install such a thing.
However, one company that took an interest in the project was Takagi Hospital (Aioi, Kiryu City), which had been in charge of the installation during his time at the construction company.
If it doesn't work, you don't have to pay for it.
The system was introduced in January 1988, and naturally, it was a great success.
The hospital's annual utility costs, which had been 45 million yen, were reduced to 20 million yen, and it was fully equipped with air conditioning and baths 24 hours a day, making it a well-known hospital in the local community.
From then on, things went very smoothly.
Hospitals, factories, supermarkets, and other businesses heard about the company's reputation and began placing orders for the system one after another.
The installation of the equipment suddenly reduced electricity consumption to zero, and some electric power companies rushed to the company to inquire about the situation.
Within a short period of time after its establishment, the company was on track to reach annual sales of 100 million yen.
However, there was an unexpected pitfall... "Looking back, I was a really poor manager.
A real estate company that I knew asked me to endorse a bill, and I did so two or three times.
The amount was 400 million yen.
Of course, I understood that I was obligated to pay the amount, but I was not so concerned about it because my business was doing well and I could manage it.
However, the real estate company went bankrupt with a debt of 40 billion yen.
I was helpless." I disposed of my house and securities, and together with the cash I had on hand, I was left with 330 million yen.
That was enough to get him off the hook.
But I was not wrong about the business and the potential of cogeneration.
That is why I was even more frustrated, and I was determined to make a comeback.
Chance Arrives, Establishes Independent Power Supply Company
He moved to Tokyo with the help of an acquaintance and worked as a field representative for Toko Electric by day and at a security company by night, hoping to make a comeback.
Then one day, "I saw an article in the newspaper about the deregulation of power sales.
I thought it had finally come.
All I had was my conviction, but fortunately, acquaintances I had made after moving to Tokyo invested in me, buying my track record at Mitutoyo Engineering, Toko Denki, and other companies.
Despite the fact that most of them were salarymen, they managed to raise 20 million yen, which they used to establish Nihon Denryoku as an independent power supply company in March 1997.
This was the start of a new beginning that he had longed for.
The company's system is simply as follows.
The company will install cogeneration systems that use diesel engines and other internal combustion engines on clients' premises, such as factories and hospitals, for a rental fee, and the clients will purchase the electricity and heat energy produced by the cogeneration systems.
The client and the company set energy rates based on the cost of the initial equipment, fuel, maintenance, and other running costs, and then enter into a contract.
For the first five years, the company takes into account the depreciation cost of the equipment, but after that, the rates are further reduced.
In other words, the business is not about selling the equipment, but about selling electricity.
The buyer can obtain electricity and heat energy without incurring any construction or equipment costs.
The unit price per kWh is roughly half of the conventional electricity rate.
In addition, heat energy is supplied at the same time, so the total cost of electricity and heat energy such as heavy oil can be reduced by more than 40% of what was spent before the system was introduced, Conventional power transmission systems have an energy efficiency of 30% due to transmission losses, while cogeneration systems have an energy efficiency of 70~80% due to heat and power supply.
This is an electricity sales business that takes full advantage of this.
In addition to actual energy costs, various cost reduction effects can be expected at the same time.
In addition to eliminating the need for high-voltage power receiving facilities that were previously necessary to receive power from electric power companies, the cogeneration system also supplies heat energy all at once, eliminating the need for multiple boilers and reducing labor costs associated with each boiler.
Another of the company's strengths is its ability to build systems for power distribution and heat supply that vary from facility to facility.
While most of the cogeneration systems currently in use are based on the conventional power supply system, i.e., via a high-voltage power receiving system, the company carefully examines the facility drawings and builds the system from the ground up, including the power distribution.
This is a time-consuming and labor-intensive process that is difficult for major manufacturers or equipment sales companies to handle, according to the company.
The company plans to start using this system at two hospitals and one meat factory by the end of this fiscal year, including those that are currently under contract.
The targets include hospitals, factories, and hotels.
We are aiming for 600 million yen by the end of the fiscal year and 10 billion yen in the next fiscal year, and we plan to be listed on the Tokyo Stock Exchange in 2003.
If the high energy efficiency and reduced environmental impact of distributed power generation can be combined with significant cost reductions, these goals will become a reality.
At this very moment, the company is struggling to stand up to Gulliver.