"How To Maximize Returns From Investment In Overseas Energy Markets And Create The Foundations For Success In Japan's Energy Market Of The Future”

In 2013, the Japanese government began a series of reforms aimed at liberalizing the previously vertically-integrated energy market, with three main goals.

- Securing stable energy supplies, including supply capacity between regions

- Reducing electricity charges to consumers as much as possible

- Expanding consumer choices and business opportunities

Market structure reforms aimed at energy liberalization commenced in 2015 and were scheduled to last until 2020, for the purpose of bringing about fundamental reforms in Japan's domestic energy sector. First is a relaxation of regulations on new entrants to promote competition among retail operators. Next is construction work to strengthen and expand connection lines between regions, through various means. In conjunction with the liberalization of the wholesale energy market in 2020, this strengthening of inter-regional connections will promote competition among both retail and wholesale operators. As a result, existing energy operators will be able to use power transmission and distribution systems outside their traditional areas of supply, gradually increasing opportunities to expand their business into new areas.

The Ministry of Economy, Trade and Industry is currently in the process of drafting a detailed plan for the liberalization of the wholesale energy trading market, including the sharing of energy pools in the energy spot market. Meanwhile, there are proposals for an auction-type market mechanism for the purpose of awarding solar power contracts. Note that to date, the method of liberalizing the wholesale energy trading market has not been clearly set, and the risks involved in investing in next-generation power generation facilities and transmission/distribution facilities seem to be extremely high. Bearing all this in mind, the aim of the seminar was to use previous international experience to provide participants with an overview of best practice in energy procurement strategies.

"The Impact Of Liberalizing The Energy Market On Existing Operators And New Operators"

This series of reforms that aim to liberalize the energy market provides unprecedented business opportunities and challenges for both existing energy operators and new operators to maintain existing customers and profits, while acquiring new customers without sacrificing profits. Previous initiatives to liberalize the energy market have included many failures as well as successes, but both have no doubt provided valuable experience and expertise for the current situation in Japan.

In this seminar, we wanted to give all participants an understanding of the latest investment opportunities in Japan and used our expertise that we have accumulated to date to explain how energy operators can succeed in a liberalized market.

The plan was to not only have economic experts from NERA speaking at this seminar - but to also invite insurance specialists from Marsh Broker Japan, renowned attorneys from leading Tokyo-based law firms, and several industry leaders to join us as speakers. These experts used their extensive knowledge and experience to explain how Japan's energy market should be reformed and to examine the future outlook for Japan's energy market in light of overseas precedents on liberalization.

Content of lectures in this seminar:

"Successful Strategies For Energy Liberalization”

In this session, the speakers explained how to take advantage of the opportunities offered by the liberalization of the energy market to become a large-scale energy service provider, as well as the successful strategies for long-term investment in the most attractive areas of the energy business value chain.

Overseas Investment: Strengthening Japan's Domestic Energy Business Through The Acquisition Of Overseas Assets

In this session, the speakers explained how to take advantage of experience gained by investing overseas in liberalized markets and how best to handle the liberalization of Japan's energy market moving forward. The session focused on best practice in regard to overseas investment and what kind of lessons should be drawn from involvement in overseas markets. The speakers explained the best strategies for dealing with issues specific to overseas M&A in order to earn profits and gain experience as well as expertise in liberalized overseas markets.

“Auctions, Competitive Bidding And Procurement Strategies In Liberalized Markets”

In this session, the question was examined of how to introduce competitive bidding processes in the wholesale energy trading market being drafted in detail by the Ministry of Economy, Trade and Industry. The speakers used their experience in international cases involving the broad introduction of auctions, competitive procurement and bidding to explain what a good system design for Japan might be, and to examine the risks and benefits of introducing auctions.

The seminar was conducted in English. Some of the hand-outs are planned to be made available in English and Japanese.