According to The Asahi Shimbun, smaller, newer electricity producers and retailers are coming up with inventive and resourceful ways to add extra value to their products so they can outdo competitors and avoid falling into price wars.
Since power generation and the retail electricity market were opened up to competition two years ago, many small electricity companies have sprung up, and more than 10 percent of consumers have switched their providers.
One of those, Tokyo Yudenryoku, has set up a system to reuse overlooked energy resources in the home to generate power, while tackling water pollution at the same time.
“Tokyo is a big oil field,” said Yumi Someya, president of the power company, referring to the large amount of frying oil thrown out through domestic and commercial use in the city with a population of over 13 million. The company name is a compound of “yuden” (oil field) and “denryoku” (electric power).
The project has set up 500 collection stations for household oil used to make tempura and other foods at supermarkets and public facilities in and around Tokyo, and about 20 to 30 tons of oil is brought in daily, according to Someya.
The oil collected is used as fuel to run a generator in Gunma Prefecture that has a generating capacity of 145 kilowatts of electricity.
Currently, the project is selling electricity in the metropolitan area at prices 3 to 5 percent lower than that of Tokyo Electric Power Co. (TEPCO) to homes as well as a number of businesses that use a lot of oil, such as Chinese restaurants, in return for collecting used oil from them.
Someya plans to introduce a new generator with a generation capacity of 500 kilowatts in 2018 and aims to gain another 20,000 customers.
“I want the customers to buy our electricity, but I also want them to feel the excitement of what they used to chuck out becoming an energy resource,” said Someya.
Tokyo-based Minna Denryoku has started a program to set up solar power generation on school rooftops and to make financial contributions to the schools from sales of the electricity.
From March, it started selling electricity generated at three public schools in Takatsuki, Osaka Prefecture. When consumers sign up to buy electricity from the schools, a certain percentage of sales is donated to the Takatsuki city government, and the money will be spent on restoration of the school buildings and the purchase of school furniture or tools.
The company is planning to expand the program to more schools as they believe “there are a lot of people who want to support their old schools.”
Apart from the educational charity, the company is exploring other benefits for future customers such as attending idols’ handshake events or tickets for wrestling matches.
Grow Up Inc. is a Tokyo company that publishes a trade magazine for bakers that branched out into the electricity retailing business, particularly targeting bakeries and cake shops.
Baking uses a lot of electricity to power ovens, and to cater to that specific industry, Grow Up offers cheaper pricing from midnight to early morning when bakers start making their daily goods. For greater energy users, it means saving dozens of thousands yen over a year.
Making the most of its name recognition in the industry where it boasts more than 18,000 subscribers, Grow Up has won contracts with more than 2,200 bakers so far.
“We would like to grow while doing things major power companies can’t,” said Grow Up President Takahiro Furuta.
According to the Agency for Natural Resources and Energy, there were more than 460 electricity retailers as of this April, and about 10 percent of household and businesses have switched their power providers.
According to Ennet Corp., a major operator among new electricity retailers, more than 12 percent of all electricity sold in Japan is now through new retailers.
However, many consumers remain uninterested in changing their power suppliers.
Previously, electricity retailers had been unable to differentiate their products from others, and used to descend into severe price wars.
Yohei Kawai of marketing research company Fuji Keizai Co., who has expertise in the power industry, said, “Major electricity companies have the overwhelming advantage in terms of size of operation and name value, but I think strategies that attract consumers who are interested in combining their plans with other benefits, not just pricing, may become more common.”
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