Power Generation Facilities
Management Reference Materials
November 2010 The Okinawa Electric Power Company, Inc.
Contents Characteristics of the Business Base
････････････････････
1
Demand for Electric Power
････････････････････
2
Competition with Private Power Generation Operations
････････････････････
3
Power Generation Facilities (1/4)～ (1/4)～(4/4)
････････････････････
4～7
Fuel
････････････････････
8
The Fuel Cost Adjustment System
････････････････････
9
Trend of Average Fuel Price and Standard Fuel Price
････････････････････
10
Recent changes in standard household electricity charges
････････････････････
11
The New Buyback Program for Photovoltaic Generation
････････････････････
12
Improvement of Remote Island Income and Expenditure (1/2)～ (1/2)～(2/2)
････････････････････
13～14
Addressing the global warming issues
････････････････････
15
Q&A etc.
････････････････････
16～
The Okinawa Electric Power Company, Inc.
Characteristics of the Business Base Advantage Demand for Electric Power
Competition
Increasing demand as population increasing As the proportion of energy for consumer use is high, the effects effects of business fluctuations are low Severance from competition among electric power companies on account account of its isolated system No competition with PPS (Power Producers and Suppliers) The advance of private power generation operations is limited (Prevention (Prevention of demand withdrawals through Progressive Energy Corp , a subsidiary subsidiary of OEPC.)
Disadvantage Electric Power Generation Facilities
Due to having an isolated system, it is necessary to have a high margin of power generation reserves Electrical power source composition reliant only on oil and coal
Fuel
As oil and coal are the only fuels used, high commodity prices exert exert a great influence
Remote Islands
With remote islands where cost efficiency is low, the Remote Islands Islands Company constantly records losses
The Environment
Dependent on fossil fuels (oil and coal) with a high environmental environmental burden
The Okinawa Electric Power Company, Inc.
1
Demand for Electric Power Stable growth is forecasted for demand for electric power, centering on increased demand for consumer use accompanying population increases. （million kWh) 10,000 9,000 8,000
（thousand people） 1,500 8,674 1,450
Consumer Use Industrial Use Population(Okinawa) 7,491 7,476
7,478
7,492
6,000
1,373
1,376
1,386
6,177
6,153
6,155
1,394
1,350
5,000 4,000
1,400
1,420
7,000
7,243
（84%） 84%） （82%） 82%）
（82%） 82%）
（82%） 82%）
1,300
（83%） 83%）
6,184
1,250
3,000 1,200 2,000 1,000
1,150 1,314
（18%） 18%）
1,323
（18%） 18%）
1,323
（18%） 18%）
1,308
（16%） 16%）
（17%） 17%）
0 2007
2008
2009 （%）
Okinawa Annual Average Groｗ Groｗth Rate
Demand for Electric Power
19981998-2008
20082008-2019
Consumer use
1.2（ 1.2（1.8） 1.8）
1.5（ 1.5（1.6） 1.6）
Industrial use
1.4（ 1.4（1.4） 1.4）
0.7（ 0.7（0.7） 0.7）
1.2（ 1.2（1.7） 1.7）
1.4（ 1.4（1.4） 1.4）
Total
Note : Figures in brackets are post temperature correction.
The Okinawa Electric Power Company, Inc.
2010(Forecast)
1,431
1,100 2019(Estimate) (FY)
・・・・
Nationwide (Excluding Okinawa) Annual Average Groｗ Groｗth Rate
Demand for Electric Power Total
（%）
19981998-2008
20082008-2019
Consumer use
1.5（ 1.5（1.6） 1.6）
1.0（ 1.0（1.0） 1.0）
Industrial use
0.8（ 0.8（0.8） 0.8）
0.6（ 0.6（0.6） 0.6）
1.2（ 1.2（1.3） 1.3）
0.9（ 0.9（0.9） 0.9）
Source: Japan Electric Power Survey Committee (Growth rates were calculated from loads for distribution) Note: Figures in brackets are post temperature correction.
2
Competition with Private Power Generation Operations
The proportion of private power generation in Okinawa is 3% Progressive Energy Corp’ Corp’s share of private power generation in commercial use sectors is 55% (As of September 30, 2010)
Trend in the Permitted Output of Private Power Generators （MW) 80
71 (52)
70 60 50
Commercial Use Industrial Use 66 (44)
57 (46)
40
52 (38)
30 20 10 0
Proportion of private power generation in Okinawa
57 (41)
56 (40)
43 (35)
42 (34)
14 (6)
14 (6)
14 (6)
2006
2007
2008
2009
62 (41) 42 (34) 20 (7) 2010.9 (FY)
Trend in independent power generation (output and number of facilities)
Switch to independent power generation Total
Private Power Generation
※ The figures in brackets show number of cases.
14 (6)
Switch to power purchase
Status of market penetration by private power generators
FY 2007
FY 2008
FY 2009
FY 2010
-5MW (-8Cases)
-11MW (-5Cases)
-1MW (-2Cases)
-1MW (-2Cases)
0 Case
1MW (2Cases)
α (1Case)
7MW (3Cases)
-5MW (-8Cases)
-9MW (-3Cases)
-1MW (-1Case)
6MW (1Case)
* Totalizing only continuously used power generators interconnected to the company's power grid. * Excluding wind power, solar power and the company's facilities. * Retroactively revised due to a change in the counting method. (Sep. 2010)
The Okinawa Electric Power Company, Inc.
3% 62MW
Our Supply 97% 97% 2,236MW
Commercial Use 2% Industrial Use 1%
* Figures for OEPC supply include Electric Power Development Co, Ltd.
Proportion of PEC’ PEC’s share of private power generation in Okinawa Commercial Use Only Private Ownership 38% 38% 16MW （15 Cases） Cases）
ＰＥＣ 57% 57% 24MW （17 Cases） Cases）
Total 42MW (34 Cases) Other Companies Total 5% 2MW （2Case） 2Case）
*PEC: Progressive Energy Corp. * The aggregate sum may not be equal to the total due to rounding off.
3
Power Generation Facilities 〔〔１/4〕 １/4〕 Generation Reserve Margin Demand-Supply Balance （10 Thousands of kW、 kW、%）
OEPC
Peak Load Supply Capacity Reserve Capacity Reserve Margin(%)
2009 【Result】 Result】
2010 【Result】 Result】
2014
2019
142
138
152
164
196 (171)
184 (159)
214 (194)
228 (212)
53 (28)
46 (21)
62 (42)
64 (49)
37.5 (19.9)
33.3 (15.2) 40.4 (27.7)
39.1 (29.8)
Note :The figures in brackets show demanddemand-supply balances when gas turbines are excluded.
■
■ ■
（10 Thousands of kW、 kW、%）
10 Major Electric Power Companies 2009 【Result】 Result】
2010
2014
2019
Peak Load
15,512
16,965
17,603
18,257
Supply Capacity
19,540
19,414
19,507
20,274
4,028
2,449
1,903
2,017
26.0
14.4
10.8
11.0
Reserve Capacity Reserve Margin(%)
(Source :Agency for Natural Resources and Energy, “Summary of Electric Power Supply Planning ,FY2010” ,FY2010”)
A high generation reserve margin is necessary for such reasons as as the inability to exchange power with other electric power companies because of OEPC’ OEPC’s isolated system and the responsibility to provide stable supply supply as a public utility. The power supply reserve is achieved by securing the equivalent reserve capacity of the largest single generator so that it is possible to provide stable supply even if the largest largest unit breaks down. Part of the margin is provided by gas turbines, which carry lower lower investment burden (permitted output: 266MW).
Although there are factors encouraging increased facility investment investment associated with the growth of electric power demand, OEPC is making efforts to suppress the level of facility investment and promote load leveling and the like, aiming at efficient facility formation. The Okinawa Electric Power Company, Inc.
4
Power Generation Facilities 〔〔2/4〕 2/4〕 Power Supply Composition ■ Power supply is dependent on oil and coal because of the difficulty of finding sites for hydro or nuclear power generation due to factors including geographic and topographical characteristics and constraints on the scale of demand.
■ Introducing LNG thermal power stations to diversify power supply sources Improving security for the stable supply of electric power Electric Power Composition Ratio (Generating End) Totals for the 10 Major Electric Power Companies (FY2009: Estimated Results) Nuclear Power 29.2%
Hydro Power 8.1%
Oil,etc 7.6%
Coal 24.7%
New LNG Energy, 29.4% Others 1.1% (Source:Agency for Natural Resources and Energy, “Summary of Electric Power Supply Planning ,FY2010” ,FY2010”)
The Okinawa Electric Power Company, Inc.
Okinawa Electric Power Company (FY2009:Results) Coal 78%
Oil 21%
Image of Situation Following the Start of LNG Thermal Power Station Operation
New Energy, Others 1%
（FY2019） Coal 53%
Oil 16% LNG 30%
New Energy, Others 1%
* Both pie charts include energy supplied by other companies.
5
Power Generation Facilities 〔〔3/4〕 3/4〕 ～ Yoshinoura LNG Thermal Power Plant ～ Construction Purpose
Okinawa Prefecture
【Site for Power plant construction】 construction】
Response towards steady demand increases Environmental measures Æ Avoidance of large environment costs Fuel diversification Æ Improvement of energy security Search for new business opportunities making efficient use of LNG LNG
Investment Plan Power generation facilities, Generators No.1 & 2 (251,000 kW each) each) 2 LNG terminals (140,000 kl each) Including other expenses, the operation is on the scale of 100 billion billion yen The forecast investment peak is from FY2010 – FY2011 Conceptual Image of the Completed Facility
Construction Schedule 20032003-2007 Environmental assessment, etc., investigation of various procedural matters, facility specifications, etc.
2007 -2012 Construction work
Nov. 2012 Start of operations at Generator No.1
May 2013 Start of operations at Generator No.2
From 2016 on: Start of operations at Generators No.3 & 4
Main Points for 2010 ・Foundation work for Gas turbine structure ・Completed construction to mount an LNG tank on the rooftop ・Started the groundwork for the service building
The Okinawa Electric Power Company, Inc.
6
Power Generation Facilities 〔〔4/4〕 4/4〕 ～ Yoshinoura LNG Thermal Power Plant ～ Effects on Finance （Past Tendencies） The balance of interest bearing liabilities increased Large depreciation burden and decreased income associated with largelarge-scale facility investment
(Billion Yen)
Trend of Ordinary Income
16 14 12
Gushikawa Power Station Generator No.1:March 1994 Generator No.2:March 1995
KIn Power Station Generator No.1:February 2002 Generator No.2:May 2003
10 8
Countermeasures
6
Creation of strong financial characteristics able to withstand the the Yoshinoura Thermal Power Station investment burden Æ Control the increase of the balance of interest bearing liabilities Reduction of the depreciation burden associated with the start of of operations at Yoshinoura Thermal Power Station Æ Investigating the way for cost leveling including the finance lease lease for the LNG terminals.
Application of usual finance to electricity operation as a whole Earlier depreciation as previously using a fixed percentage method
2 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
(Billion Yen)
Trend in Balance of Iterest Bearing Liabilities
310 290 270 250
Perspective Power Generation Facilities
Application of retirement benefit accounting
4
LNG Terminals Aim at stable costs for a part of fuel costs Currently investigating cost leveling through lease finance
230 210 190 170
Gushikawa Power Station Generator No.1:March 1994 Generator No.2:March 1995
KIn Power Station Generator No.1:February 2002 Generator No.2:May 2003
150 130 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
•If finance lease is adopted, the company applies onon-balance sheet and nonnon-transfertransferownership contracts. The Okinawa Electric Power Company, Inc.
7
Fuel （$/bbl） 150.00
Great effects are exerted on the company by movements in fuel prices. prices. The outlook of fuel prices is uncertain due to the rise trend with a hint of economic recovery. 130.00 110.00 90.00
70.00 FY08 Average Price 50.00
90.52$/bbl
FY09 Average Price 69.40$/bbl
FY10 Apr-Sep 78.36$/bbl
30.00
2008.4
（$/bbl） 150.00
2008.7 2008.10 2009.1
2009.4
2009.7 2009.10 2010.1
2010.4
2010.5
2010.6
2010.7
2010.8
2010.9
Trend in the CIF Customs Cleared Price of Oil
（$/t） 150.00
130.00
130.00
110.00
110.00
90.00
90.00
70.00
70.00
50.00
FY08 Average Price 90.52$/bbl
FY10 Apr-Sep 78.36$/bbl
FY09 Average Price 69.40$/bbl
30.00
Trend in the CIF Customs Cleared Price of Coal FY09 Average Price 97.65$/t FY08 Average Price 133.88$/t
FY10 Apr-Sep 108.03$/t
50.00 30.00
2008.4 2008.7 2008.10 2009.1 2009.4 2009.7 2009.10 2010.1 2010.4 2010.5 2010.6 2010.7 2010.8 2010.9 LongLong-term contracts on coal and transport ships
Diversification of fuel oil suppliers through regular purchase
Procurement that considers heavy oil market condition (Spot purchase)
Initiatives of the company (fuel)
Dispersion of ports of shipment and shift to shortshort-distance sources Efficient use of the’ the’ ShinryoShinryo-maru’ maru’ and COA(contract of affreightment) affreightment) Expansion of the introduction of subsub-bituminous coal, which has a low environmental burden
Achieving stable fuel supply and pursuing cost reductions
2008.4 2008.72008.102009.1 2009.4 2009.72009.102010.1 2010.4 2010.5 2010.6 2010.7 2010.8 2010.9
Activities this term • Diversification of fuel oil suppliers through regular purchase • Reduction of fuel costs via utilization of spot market • Achieving stable coal supply and fuel cost reduction via long term term contracts for coal and transport vessels • Secure stable supply and reduced fuel cost by dispersing embarkation port and shifting to closelyclosely-located supply sources. • Reduce transportation cost by utilizing “Shinryomaru” Shinryomaru”, a specialized carrier for low transportation cost, and competitive COA (Contract of Affreightment). Affreightment). • Life expansion of ash processing facilities and the reduction of fuel costs by increasing the use of subsub-bituminous coal which has lower ash, lower sulfur and lower environmental load than bituminous coal.
* Although there is a time lag, fuel price changes are reflected to to the electricity rates through the Fuel Cost Adjustment System. The Okinawa Electric Power Company, Inc.
8
The Fuel Cost Adjustment System Summary of the System
The fuel cost adjustment system was introduced for the purpose of clarifying the “internal factors” such as the results of efforts to promote management efficiency at electric power companies and reflecting “external factors” onto electricity rates such as exchange rates and oil and coal and LNG prices that alter the economic situation. Range of fuel cost adjustment • We will calculate the average fuel price based on the prices of crude oil, coal and LNG on the trade statistics during the period between five months and three months prior to the fuel cost adjustment, and electricity charge will be automatically adjusted each month by comparing the above price with the standard fuel price at the time of electricity rate revision. • The maximum level of fuel cost adjustment will be 50% . • There will be no lower adjustment limit. The Okinawa Electric Power Company, Inc.
Conceptual drawing of the fuel cost adjustment system
E.g. The average fuel price during the period between December and February of the following year will be applied to fuel cost adjustment for the electricity charge for May in the following year. The average fuel price during the period between January and March will be applied to fuel cost adjustment for the electricity charge for June in the same year.
Fuel price
3-month average fuel price
Oct.
Nov.
Dec.
Jan.
Feb.
2-month time-lag
Mar.
Apr.
May
Jun.
Official announcement of trade statistics
Fuel cost adjustment
Fuel cost will be adjusted each month.
Electricity charge for May will be applied to the electricity use starting as early as April 1.
9
Trend of Average Fuel Price and Standard Fuel Price Trend of Average Fuel Price and Standard Fuel Price（Since July 2006） (Yen/kl)
【Standard Fuel Price】 Price】
40,000 35,000 30,000
Standard Fuel Price (Yen/kl (Yen/kl))
38,000
Jul. 2006 Revision
Sep. 2008 Revision （Present） Present）
18,700
25,100
25,100 22,300
25,000
20,500
Standard Fuel Price Average Fuel Price
20,900
18,900
20,000 ※September 2008 Revision
15,000
※From May 2009, the fuel cost adjusted unit price was revised each month
09 .4 M 5M 6M 7M 8M 9M 10 11 M 1 M 10 2 M .1 M 2M 3M 4M 5M 6M 7M 8M 9M 10 11 M M
2Q
4Q
3Q
08 .1 Q
4Q
3Q
2Q
07 .1 Q
4Q
06 .2 Q
3Q
10,000
10.3M
10.4M
10.5M
10.6M
10.7M
10.8M
10.9M
10.10M 10.11M
09.10M 09.11M ～ ～ 09.12M 10.1M
09.12M ～ 10.2M
10.1M ～ 10.3M
10.2M ～ 10.4M
10.3M ～ 10.5M
10.4M ～ 10.6M
10.5M ～ 10.7M
10.6M ～ 10.8M
19,700
19,900
20,000
20,500
21,300
22,100
22,100
21,500
42,330
43,843
44,530
44,267
44,888
46,260
47,217
45,829
42,867
8,280
8,140
8,095
8,290
8,570
8,978
9,493
9,831
9,934
Period for estimating a fuel price range
Period for applying the Fuel cost adjustment system
09.12M
10.1M
10.2M
Period for estimating a fuel price range
09.7M ～ 09.9M
09.8M ～ 09.10M
09.9M ～ 09.11M
Average Fuel Price（ Price（yen/k yen/kｌ）
20,400
20,000
19,800
19,500
Average Crude Oil Price（yen/k yen/kｌ）
41,714
41,057
41,734
9,167
8,963
8,647
Average Coal Price(yen/t） Price(yen/t）
【Method of calculating Average Fuel Price】 Price】 Average Fuel Price ＝ A×α＋ Average coal price per ton in each quarter ×α＋B×β A : Average crude oil price per kiloliter in each quarter B : Average ※
α and β are coefficients in Provisions of supply to calculate the average average fuel price.
The Okinawa Electric Power Company, Inc.
(Reference α:0.2410 ､β:1.1282 ､β:1.1282 Provisions of supply Sep. 2008 effective)
10
Recent changes in standard household electricity charges ○Changes in standard Household electricity charges 〔YEN〕
8,242
8,000
7,975
2008.9.1 Revision 7,675
7,447 7,399
7,393
7,384
7,327
7,336
7,360
7,360
7,405 7,342
7,351
7,333
7,315 7,261 7,186
7,204
7,213
7,000
6,500 9
10 11 2008
12
1
2
3
4
5
6
2009
7
8
9
10
11
12
1
2
3
4
5
6 2010
7
8
9
10
11
※1 300kWh/Month ※2 From Jan.2009 to Apr. 2009, electricity charge after special measures are implemented were applied. ※3 From May 2009 to March 2010, electricity charge after special special measures and transitional measures are implemented were applied. applied.
The Okinawa Electric Power Company, Inc.
11
The New Buyback Program for Photovoltaic Generation The New Buyback Program for Photovoltaic Generation was launched on November 1, 2009, based on the Japanese state law to cover the cost of introducing solar photovoltaic power power generation facilities by the entire nation and promote the introduction of solar photovoltaic generation with the aim of reducing reducing CO2 emissions domestically. This system obliges electric power companies to purchase surplus electricity, which is generated using solar photovoltaic power facilities and meets the requirements, at the unit price specified specified in the law for 10 years. This program is designed to be “an allall-participating system," system," in which all customers assume the cost incurred for the purchase as photovoltaic generation surcharge (PV (PV surcharge) according to their electricity usages. ■ Unit price of electricity purchase (FY2010) （The maximum electricity receivable*1） Not eligible for the purchase
500kW
50kW
10kW
50kW or greater Less than 500KW*2
24 yen （20 yen*3）
10kW or greater Less than 50kW
24 yen （20 yen*3）
Less than 10kW
48 yen （39 yen*3）
*2.
*3.
Unit Price of PV Surcharge
24 yen （20 yen*3）
Residential electricity ［LowLow-voltage］ voltage］
*1.
■ Unit Price of PV Surcharge The unit price of photovoltaic generation surcharge (PV surcharge) applicable for the FY 2010 is 0.00 yen/kWh as a result of rounding off, therefore there is no charge for customers in the FY 2010.
NonNon-residential electricity ［HighHighvoltage］ voltage］
“The maximum electricity receivable” receivable” is either of the smaller of electricity generated through solar panel system or solar power inverter system. If the maximum electricity receivable is within the range between between 50kW or greater and less than 500kW, this unit price of purchase will be applicable only when the maximum electricity receivable does not exceed the electricity contract (contract on electricity electricity supply from us.) Unit price of purchase in the case where the customer has installed installed other inin-house power generation facilities (including secondary batteries) and, while there is be be no inflow of electricity from such facilities to our electricity system, inflow of electricity from solar power power generation facilities may increase because inin-house power generation facilities are also installed.
The Okinawa Electric Power Company, Inc.
FY 2010
0 .00yen/kWh .00yen/kWh
Incidentally, the actual purchasing cost for the FY 2009 which could not be collected due to rounding off will be carried forward to the time of unit price calculation for the FY 2011, and the customers will be practically charged the cost in and after FY 2011.
12
Improvement of Remote Island Income and Expenditure 〔〔1/2〕 1/2〕 Movements in Remote Island Revenue and Expenditure
Electricity Sales（FY2009） （Total : 7,478 million kWh）
（ billion yen）
25
Remote Islands
0
641 million kWh
Revenue Expenditure Ordinary Income
20
-1
8.6%
-2 -3
15
10
Main Island
-4
6,837 million kWh
-5
91.4%
-6
Residential,Commercial and Industrial Use Charges(FY2009) (Total : 150.6billion yen)
-7 5
-8 Remote Island Operations Division
Remote Islands
-9
Remote Island Company
0
13.9billion yen
-10 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
9.2%
2010
(Estimate) Damage worth 800 million yen due to TyphoonNo.14(Miyako) (FY: 2003)
Increased Fuel Costs ・Change of Oil Type(C Æ A heavy oil) ・High Cost of Crude Oil (FY2005(FY2005-)
Decreased Fuel Costs ・Change of Oil Type (AÆ (AÆ FCCFCC-C heavy oil)
Main Island （billion yen） yen）
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
136.7billion yen 90.8%
(Estimate)
Revenue
12.3
12.8
12.7
12.4
12.6
13.3
13.6
13.7
14.7
14.0
14.3
Expenditure
17.2
17.0
15.7
16.2
15.9
19.3
22.2
20.7
21.8
20.1
20.6
Ordinary Income
-5.0
-4.2
-3.0
-3.8
-3.3
-6.0
-8.6
-6.9
-7.0
-6.1
-6.3
The Okinawa Electric Power Company, Inc.
Remote island business occupies slightly less than oneone-tenth of electricity sales and residential, commercial and industrial use charges.
13
Improvement of Remote Island Income and Expenditure 〔〔2/2〕 2/2〕 The region has a high cost structure because of such reasons as having small islands scattered about a vast sea area and the narrow scale of the economy. In order to construct a system enabling fast implementation of measures measures to improve inequalities in income and expenditure, a Remote Island Operations Division was launched in FY2001 and from from FY2002, this was converted into the Remote Island Company. •
Establishing remote control system for power generation plants in in Miyako and Ishigaki. Ishigaki.
•
Revising the procedures for regular inspections on electric power power supply facilities.
•
Purchasing other companies’ companies’ idle facilities and moving idle facilities of own company.
•
Switching from A heavy oil to FCCFCC-C heavy oil.
Fuel costs are greatly increasing due to the recently soaring price price of crude oil. We work out new measures to stabilize supply and improve the balance balance of revenue and expenditure while pushing ahead with ongoing various measures z Reducing fuel consumption by introducing New energy (Retractable windwind-power generators, Remote island micro grid system etc.). z Effective utilization of waste oil. etc. (Billion Yen)
2.0
Personnel Cost
(Billion Yen)
Maintenance Cost
4.0
1.8
3.4
1.5 1.5
3.0
1.0
2.0
0.5
3.5
2009
The Okinawa Electric Power Company, Inc.
3.0
Depreciation Cost 2.6
(Billion
Fuel Cost
Yen)
2.4 8.3
2.0 5.0
1.0
0.0
2001
Yen)
10.0
1.0
0.0
(Billion
0.0 2001
2009
4.7
0.0
2001
2009
2001
2009
14
Addressing the global warming issues ■ Finding sites for hydro or nuclear power is difficult in Okinawa Prefecture due to reasons including the region’ region’s geological and geographic characteristics and constraints on the scale of demand Æ Dependency on fossil fuels (oil, coal, etc.)
■ Introduction of LNG thermal power, which creates low CO2 emissions (Yoshinoura Thermal Power Station) ■ Promotion of the introduction of “new energy” energy” based on the RPS system ■ Efficient operation of thermal power plants ■ Promotion of multimulti-fuel operation with biomass energy ■ Equity participation in carbon funds taking advantage of the Kyoto Kyoto Mechanism (as of March 31, 2010 2010))
Company Efforts
Name of Funds
Equity participation in carbon funds
Contract of amount of investment Contract of credit volume
Acquired credit volume or amount of investment (contract basis) 6 million dollars
Approx.4.1 million tons-CO2
Purchase Contract with a trading company etc. ■Investment for CCS survey research ■Promoting introduction of electric vehicles for businessbusiness-use (introducing 100 electric vehicles by FY2020) ■Promoting energy saving on the demand side (by offering EcoCute services, etc.) （cf.） cf.）Actual result of CO2 emission coefficient for 2008: 0.946kg - CO2 /kWh （The figure after adjustment is the same） same） Actual result of CO2 emission coefficient for 2009: 0.931kg - CO2 /kWh （The figure after adjustment is the same） same） The Okinawa Electric Power Company, Inc.
15
Q&A
The Okinawa Electric Power Company, Inc.
Q&A - Contents Q1． Q1． What is the Current State of the Okinawa Prefectural Economy and What is the Future Forecast? 1) Okinawa’ Okinawa’s Economy 2) Annual Average Growth Rates for GDP and Per Capita Prefectural (National) Income 3) Population and Household Growth in Excess of Nationwide Growth Growth 4) Okinawa Prefecture Demographics 5) Trends in the Number of Incoming Tourists and Guest Rooms at Accommodation Facilities 6) Trends in U.S. Base Related Income
・・・・ 16 ・・・・ 17 ・・・・ 18 ・・・・ 19 ・・・・ 20
Q2.
Reference: Main Economic Indicators What is the Current State of U.S Military Bases?
・・・・ 21 ・・・・ 22 ・・・・ 23
Q3.
What are the Effects of Liberalization of Electric Power and What What is the Future Forecast for Liberalization?
・・・・ 24
Q4． Q4． What are the Special Tax Measures ? Q5． Q5． What is the Current State of the Promotion of AllAll-Electric Houses ? Q6． Q6． What is the Current State of the New Demand Creation Through the Promotion of Commercial Electrification Equipment ? Q7． Q7． What is the Past Trend for Ordinary Income and What is the Forecast Forecast for this Fiscal Year? Q8． Q8． What are the trends of the Capital Expenditure and Free Cash Flows? Flows? Q9． Q9． What is the Status of Wind and Solar Power Electricity Generation Generation Facilities? Q10． Q10． What is a retractable windwind-power generator? Q11． Q11． What is the New Energy verification studies for the Remote Island Island Independent System? Q12． Q12． How do Current Electricity Rates Compare to Rates at Other Companies? Companies? Q13． Q13． What are the CO2 Emission Volumes by Fuel Type? Q14． Q14． What is the Current State of the Progress of Discussion in the Gas Gas Industry? Q15． Q15． What is the PCB Waste Treatment ? ○ Change in Okinawa Electric Power Company’ Company’s Stock Price ○ Earnings Per Share and Payout Ratio ○ Reference The Okinawa Electric Power Company, Inc.
・・・・ 25 ・・・・ 26 ・・・・ 27 ・・・・ 28 ・・・・ 29 ・・・・ 30 ・・・・ 31 ・・・・ 32 ・・・・ 33 ・・・・ 34 ・・・・ 35 ・・・・ 36 ・・・・ 37 ・・・・ 38 ・・・・ 39
Q1.What is the Current State of the Okinawa Prefectural Economy and What is the Future Forecast?
1
Okinawa’s Economy
◎The current state of affairs The prefecture economy is showing a recovery in some areas from the recovery of tourism demand and the underpinning of consumer spending as a result of fiscal stimulus. • Although consumer spending remains under severe conditions as consumers continue to be defensive about their lifestyles, it shows a recovery in some areas as a result of fiscal stimulus. • Construction demand is lower than in the previous year in both public works and in housing starts. • Tourism demand is higher than in the previous year, which had a negative impact from recession and the H1N1 flu, from hosting the interscholastic athletic meet and an increase of tourists from abroad.
◎Prospects The economy is expected to maintain its move toward recovery, albeit slowly, mainly in tourism demand, from a ripple effect of economic recovery in mainland Japan. On the other hand, there is a concern about a slowing growth in both Japanese and global economies, and we need to keep watching its impact. The Okinawa Electric Power Company, Inc.
Trends in Main Economic Indicators (Rates of Growth) （%） FY200 9 FY2009 Indicators
Sales by largelarge-scale retailers No. of new car sold Wholesale shipments of household appliance New residential construction starts Value of public works contracts No. of Inbound tourists Total unemployment rate Value of corporate failures Note 1:
Note 2: Note 3: Source:
First Half
Second Half
FY20 10 FY2010 Total
First Half
-2.4
-4.2
-3.3
-1.4
-11.9
19.0
1.8
26.9
7.4
29.1
17.7
17.3
-1.7
-25.2
-14.6
-6.2
8.3
-12.4
-2.8
-16.2
-4.0
-4.2
-4.1
5.1
7.6
7.4
7.5
7.5
-83.2
-44.6
-77.3
-36.9
The figures for ‘Sales by largelarge-scale retailers’ retailers’ are calculated from the values given in preliminary figures for August 2010 on an all allstore base. The figures quoted here for ‘Wholesale shipments of household appliance’ appliance’ are estimates. The figures for ‘Total unemployment rates’ rates’ are raw data. Okinawa General Bureau, Okinawa Prefecture, Okigin Economic Institute, and others.
16
Q1.What is the Current State of the Okinawa Prefectural Economy and What is the Future Forecast?
2
Annual Average Growth Rates for GDP and Per Capita Prefectural (National) Income
■ Due to measures based on the Okinawa Promotion and Development Plan, Plan, GDP growth in Okinawa prefecture is expected to exceed the national average. The forecast is for an annual average growth rate of 3.7% in Okinawa prefecture up to 2011, higher than the national annual average of of -0.8%. ■ Furthermore, per capita income is also expected to increase, supported supported by the growth of prefectural GDP. Growth of about 7.5% is anticipated, in contrast to the national figure of 3.8%.
Annual Average Growth Rate of Per Capita Prefectural (National) Income
Annual Average Growth Rate of GDP
FY2007
FY2011
Annual Average Growth Rate FY2007FY2007-Y2011
Prefectural GDP
3,916.3 billion yen
4,531.1 billion yen
Approx. 3.7%
National GDP
562,350.4 billion yen
545,054.7 billion yen
Approx.Approx.-0.8%
Sources: “Economic and Social Perspectives in Figures” Figures”, in the Okinawa Promotion and Development Plan FY2007 Prefectural Economic Accounts Cabinet Office, Japan Electric Power Survey Committee
The Okinawa Electric Power Company, Inc.
FY2007
FY2011
Annual Average Growth Rate FY2007FY2007-Y2011
Prefectural Income
2.05 million yen
2.74 million yen
Approx. 7.5%
National Income
2.93 million yen
3.40 million yen
Approx. 3.8%
"Sources: “Economic and Social Perspectives in Figures” Figures”, in the Okinawa Promotion and Development Plan, FY2007 Prefectural Economic Accounts
17
Q1.What is the Current State of the Okinawa Prefectural Economy and What is the Future Forecast?
3
Population and Household Growth in Excess of Nationwide Growth
■ While nationwide (excluding Okinawa) is expected to decrease by 0.34% annually on average from FY 2009 to FY 2019, the population in Okinawa is expected to increase by 0.24%. ■ Whereas the population reached a peak in 2004 on a nationwide basis basis and has entered a downswing since then, Okinawa is expected to reach its population peak between 2025 and and 2030. Growth of Population and Households in Okinawa Population (thousand People）
Population Households
1,500 1,450
Households
633
643
655
1,400 1,353
1,362
1,368
666
1,373
674
1,376
683
(0.70%) （ Thousand） 732 750
Growth of Population and Households Nationally (Excluding Okinawa) Population （ Thousand people）
129,000
700 (0.24%) 650 1,420 600
128,000
550
126,000
1,386
500
1,350
Population Households
127,000
59,288
59,919
60,580
61,225
61,740
62,002
(0.21%) 63,292
126,434 126,406 126,402 126,398 126,316
55,000
126,124
50,000 125,000 45,000
400
124,000
350
123,000
40,000 (-0.34%) 121,920
300
1,250
250 1,200 2004
2005
2006
2007
2008
2009
Source: National Census, Ministry of Internal Affairs and Communications, Japan Electric Power Survey Committee Note: For 2019 2019, the rate in parentheses is the average annual growth rate for FY 20092009-2019
200 2019 （FY）
65,000 60,000
450
1,300
Households （ Thousand）
122,000 121,000 2004
2005
2006
2007
2008
2009
35,000
30,000 2019 （FY）
Source: National Census, Ministry of Internal Affairs and Communications, Japan Electric Power Survey Committee Note: For 2019 2019, the rate in parentheses is the average annual growth rate for FY 20092009-2019
Thanks to the stability growth of household numbers in association association with the increasing population, residential demand increases are expected. The Okinawa Electric Power Company, Inc.
18
Q1.What is the Current State of the Okinawa Prefectural Economy and What is the Future Forecast?
4
Okinawa Prefecture Demographics
■ Demographics of Okinawa Prefecture are in outflow of 0.5 person per 1,000 people in terms of social increase in population, but natural increase in population remains steady and and is at the top nationwide with 5.0 persons per 1,000 people. ■ Consequently, growth of population in the prefecture significantly significantly exceeds the national average of -1.4 person, with 4.5 persons per 1,000 people. Trend in the Social Increase of population (Per Thousand people) （People） 3.0 (3rd) 2.0
Nationwide Okinawa
1.7
（People） (1st) 7.0 6.0
5.4
(1st) 5.2
(1st) 5.4
(1st) 5.3
Nationwide Okinawa 5.0(1st)
5.0
1.0 0.0
0.0
4.0
0.0 -1.0
Trend in the Natural Increase of population (Per Thousand people)
-0.2 (11th)
-0.4
-2.0
-0.3
-0.5(9th) -1.0
-1.9 (22th)
-3.0 2005
2006
2007
2.0 1.0
2008
0.1
0.0
0.0
-3.3(30th)
-4.0
3.0
-0.0
-1.0 2009
(FY)
2005
2006
2007
-0.3 2008
-0.5 2009
Trend in the Increase of population (Per Thousand people) （People） 8.0 (3rd) 7.0 6.1 6.0 5.0 4.0 3.0 2.0 1.0 0.0 -1.0 -0.1
Nationwide Okinawa (4th) 5.0
0.0
(1st) (6th) 3.5
2005
(7th) 2.1
0.0 -0.6
-2.0 (FY)
4.5
2006
2007
2008
-1.4 2009
(FY)
Source: Bureau of Statistics, Ministry of Internal Affairs and Communications, “Yearly Population Estimates” Estimates”
Source: Bureau of Statistics, Ministry of Internal Affairs and Communications, “Yearly Population Estimates” Estimates”
Source: Bureau of Statistics, Ministry of Internal Affairs and Communications, “Yearly Population Estimates” Estimates”
Note: Social increase of population = Incoming population – Outgoing population
Note: Natural increase of population = Births – Deaths
Note: Population increase = natural increase in population + increase/decrease of population in the society
The figures in brackets in the chart show Okinawa Prefecture's national ranking.
The Okinawa Electric Power Company, Inc.
The figures in brackets in the chart show Okinawa Prefecture's national ranking.
The figures in brackets in the chart show Okinawa Prefecture's national ranking.
19
Q1.What is the Current State of the Okinawa Prefectural Economy and What is the Future Forecast?
5
Trends in the Number of Incoming Tourists and Guest Rooms at Accommodation Facilities
FY2009 Result for incoming tourists: 5.69 million people( people(-4.1% in the previous year’ year’s figure) ※The target figures for 2010 are 6 million incoming tourists （ 10 Thousands of People）
Trends in the Number of Incoming Tourists and Guest Rooms at Accomodation Facilities
Target （Rooms） 45,000
850 Incoming Tourists Guest Rooms at Accommodation Facilities
800 750 700
31,238
600
25,423
23,781
23,297
550 490
500 450
①FY2010
33,654 32,320
27,533 28,303
650
463
450
557 513
571
589
35,005
40,000
36,359
35,000 600
593 569
517
447
30,000 25,000 20,000 15,000
10,000 （FY） 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Sources: “Summary of Okinawa Promotion measure” measure”, “Tourism Directory” Directory”, ”Visit Okinawa Plan” Plan” •The survey of guest rooms at accommodation facilities changed from a biennial to an annual basis from 2003.
Visit Okinawa Plan ・Incoming Tourists 6.00million (Including Tourists from foreign countries 0.3million) ・Tourist Income 438.0billion Yen
422
400 350
【Reference】 Reference】
②FY2009 Results ・Incoming Tourists 5.69million (Including Tourists from foreign countries 0.25million) ・-4.1% growth rate (YoY (YoY)) Because of holding back on traveling due to economic slump and H1N1 flu, the number fell below the previous year.
With the number of tourism related facilities (hotels, etc.) increasing increasing in association with increased numbers of incoming tourists, increases are forecast for demand for commercial commercial use electricity. The Okinawa Electric Power Company, Inc.
20
Q1.What is the Current State of the Okinawa Prefectural Economy and What is the Future Forecast?
6 (Billion Yen) 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0
Trend in U.S. Base Related Income （%）
Trend in U.S.Base Related Income
16.0 12.0 Base Related Income 8.0
Prefectural Aggregate Income
4.0
Level of Dependence on Bases
0.0 1972
1977
1982
1987
1992
1972 Base Related Income （Charges for Land Occupied by US Armed Forces）（ A） Forces）（A
Prefectural Aggregate Income（ Income（B） Level of Dependence on Bases（ Bases（A/B） A/B）
77.7
1997
1977 100.6
2003
2004
1982 134.6
2005
1987 128.2
2006
1992 156.3
2007
1997 184.0
2003 211.3
2004 211.1
（Unit: billion yen、 yen、%） 2005 2006 2007 201.0
215.3
208.8
501.3 1,163.1 1,822.6 2,516.5 3,192.9 3,582.1 3,826.7 3,798.9 3,869.1 3,908.3 3,937.9 15.5 8.6 7.4 5.1 4.9 5.1 5.5 5.6 5.2 5.5 5.3
■ U.S. Base related income has become an income source that supports the Okinawa economy. ■ However, the level of dependence on the bases has been falling year on year as the prefectural economy expands, and it had fallen to 5.3% in FY2007 from the 15.5% share at the time Okinawa was returned to Japan (1972). The Okinawa Electric Power Company, Inc.
Source: Okinawa Prefectural Government, Governor’s Office, US Base Countermeasure’s Office, “Okinawa Bases of the US Armed Forces and Self Defence Forces (Statistics), March 2010”
21
Reference : Main Economic Indicators Trends in Main Economic Indicators (Year-on-Year Comparison)
(Unit : %)
FY2009
FY2010 First Half
Indicators
Apr. Sales by largescale retailers No.of new car sold Wholesale shipments of household appliance
-2.5
Total unemployment rate Value of corporate failures
Aug. Sep.
Oct.
Nov. Dec. Jan.
Feb. Mar.
Apr.
May Jun.
Jul.
Aug. Sep.
-4.3
-5.9
1.1
-5.2
-8.8
-2.5
-4.9
-1.7
-2.2
-1.0
-2.0
-2.0
-1.9
0.0
－
-15.4 -26.4 -23.2
-12.1
5.7
4.3
6.8
11.7
12.5
20.1
29.4
30.2
42.8
31.7
39.6
20.4
31.9
4.1
12.8
15.2
-2.2
23.7
18.0
19.0
44.4
42.7
14.4
19.9
15.0
15.2
27.0
13.4
-0.8
11.9 -45.6 -32.2
4.5
-8.7
25.5 -10.8
-9.2
-6.1
-1.5
Jul.
-3.5
New residential -31.8 construction Value of public works -22.8 contracts No.of Inbound tourists
May Jun.
5.8
3.0
6.3
-0.3
16.9
-8.6
75.7 -17.4 -16.0 -34.3 -35.7
77.5 -12.9
27.6
-0.5
-7.4
-7.4
-2.7
0.5
-4.0
7.6
8.6
7.5
6.6
7.5
90.8
44.6
19.4
5.7
6.2
16.8
-3.7 -12.3 -12.2
7.7
-98.9 -58.0 -74.9
7.1
7.5
13.0 -39.3 -37.7 -25.2
-6.3 -68.4
39.3 -33.0
-6.1 -10.7
-7.3
-0.5
8.1
1.4
5.2
9.9
0.2
2.9
5.6
6.9
6.8
7.1
8.1
8.0
8.0
7.9
6.7
6.5
7.8
8.0
49.6 495.6 -26.8 -94.3 125.5
-7.1 -77.4 -95.2 -73.9
-4.4 -97.8 562.5
Note 1: The figures for ‘Sales by largelarge-scale retailers’ retailers’ are calculated from the values given in preliminary figures for August 2010 on an allall-store base. Note 2: The figures for ‘Total unemployment rates’ rates’ are raw data. Source: Okinawa General Bureau, Okinawa Prefecture, Okigin Economic Institute, and others.
The Okinawa Electric Power Company, Inc.
22
Q2. What is the Current State of U.S. Military Bases ? 【Proportion of Demand Taken Up By U.S. Armed Forces 】
U.S. Armed Forces demand was about 9.4% of total demand and about about 7.1% of revenue in fiscal 2009.
The proposal for reorganization of the U.S. Armed Forces was agreed agreed upon by the U.S.U.S.-Japan Security Consultative Committee on May 1, 2006, and the facilities to be returned were clarified.
The schedule for return of US military bases, which should have been developed by March 2007, has not been formulated yet and the detailed detailed plan remains uncertain.
Although Japan and the U.S. reached an agreement with the Henoko plan as a result of reviewing several plans for a new location of the U.S. Futenma Airbase after the change of government in September 2009, the Okinawa Okinawa Prefecture and Nago City have not agreed with the plan, making its future outlook uncertain.
Although there will be a temporary decrease in demand if facilities facilities are returned, activation of the regional economy is forecasted in line with the the redevelopment of returned sites.
From now on, the company shall analyze the effects of returns on operations while paying attention to state and prefectural activity with regard regard to the proposal for reorganization of the U.S. Armed Forces.
（FY 2009 result） result）
Total Demand 7,478million kWh
Planned return of facilities
1.4～ 1.4～3.4%※ 3.4%※
Total Demand of US Armed Forces（ Forces（9.4%） 9.4%）
※Range in figures due to planned return of facilities includes partial partial return.
【Summary of U.S. Armed Forces in Okinawa】 Okinawa】
No. of Facilities
Personnel*
Area Soldiers Other Staff, Families Total
(As of Mar. 2010)
33 229 k㎡ k㎡ 24,612 20,283 44,895
* The figures for personnel are as of the end of September 2009. Reference: No. of army employees: 9,155 *As of the end of November November 2009 * Source: Website of Japan Ministry of Defense ; “Bases of the U.S. Armed Forces and Japan’ Japan’s SelfSelf-Defense Forces in Okinawa (collection of statistics and materials) materials) March 2010,” 2010,” issued by the Military Base Affairs Office, Executive Office of the Governor, Governor, Department of General Affairs, Okinawa Prefectural Government; and the guide on recruitment of employees at U.S. Forces in Japan, prepared by the Labor Management Organization for USFJ Employees Employees
The Okinawa Electric Power Company, Inc.
[U.S.[U.S.-Japan roadmap drafted for realignment of U.S. forces] (Source: Website of Japan Ministry of Defense ) • Realignment of U.S. forces in Okinawa (main contents) (a) Construction of supplement facility of Futenma Airbase: Futenma Replacement Facility (FRF) Æ Relocation to Camp Schwab scheduled to complete in 2014. (b) Reduction of military forces and relocation to Guam Æ Relocation of 8,000 Marine Corps and their family (9,000 persons) persons) to Guam by 2014. (c) Return of land Æ Total or partial return of land of six bases south of Kadena airport. airport. * Said return of land will take place after completion of personnel personnel relocation, after 2014. [Others] In addition to the plan mentioned above, there is a plan plan to deploy a PACPAC-3 unit, which calls for relocation of 600 staffers and their 900 family members from Texas, the U.S., to Okinawa. Operation of PACPAC-3 will partially start by the end of 2006.
23
Q3. What are the Effects of Liberalization of Electric Power and What is the Future Forecast for Liberalization? Retail Market
Compared to other electricity companies, this will be a more cautious cautious step in the liberalization process
Special High Voltage Demand Over 20,000kW Over 60,000V
Over 2,000kW
High Voltage Demand Over 500kW
Over 50kW
Medium size and Small size Factories, LargeLarge-Scale Factory, Department Stores, Hotels, etc
OEPC Other Companies
The Scope of Liberalization 16%
March 20002000-
April 20042004-
Low Voltage Demand and Electric Lighting Under 50kW
Small size Factories , Stores , Houses etc
Buildings, Supermarkets, etc.
The plan to expand the range to just under the extraextra-high voltage range was postponed in the ongoing electric industry reform project in 2007.
To be reviewed again within a fivefive-year target period after the finalization the of basic report (March 2008).
The Scope of Liberalization 62%
March 2000 –
April 2004 –
April 2005 –
Full liberalization was postponed in the ongoing electric industry reform project in 2007.
* Ratio to electric power sales (FY2009 results)
The Okinawa Electric Power Company, Inc.
24
Q4. What are the Special Tax Measures? Need for Special treatment Currently Applied Special Tax Measures 1. Alleviation of Fixed Property Tax Basic Law:
Supplementary Provisions of the Local Tax Law (Article 15.14)
Details:
Alleviation to 2/3 of the Standard Tax Rate
Period:
April 1, 1982 – March 31, 2012
■ Special treatment is necessary for industrial development and improving the living standards of people in Okinawa Prefecture given that there has been no changes to the conditions of remote islands such as bearing of deficit arising from structural disadvantage.
(Extended for 5 years from April 1, 2007)
Value of Tax Alleviation Due to 2. Exemption from the Oil and Coal Tax Basic Law:
Special Measures Law for the Promotion of Okinawa (Article 65.2), Special Taxation Measures Law (Article 90.4.3.1)
Details:
Exemption from the Oil and Coal Tax for coal
Period:
October 1, 2003 –March 31, 2012
the Special Measures ■ The value of the alleviation measures in FY2009 was about 2.1 billion yen. ■ The average value of the alleviation measures after FY2010 will be about 2.3 billion yen per year.
(Extended for 5 years from April 1, 2007)
※ Alleviation of Business Tax was abolished on May 15,2007 Details
: Standard Tax Rate: 1.1% (Standard Tax Rate for Electric Utilities: 1.3%)
Period
Amount of reduction by applying special treatment is deducted in calculating the Total Unit Cost of electricity charge and consequently is returned to customers.
: December 31, 1971 – May 14, 2007
The Okinawa Electric Power Company, Inc.
25
Q5. What is the Current State of the Promotion of All -Electric Houses? All-Electric 1. Sales target for FY2010 ⇒ All-Electric Houses 4,100 (14.2million kWh) 2. Approach for the promotion and diffusion. ① Launching of effective promotion activities to facilitate penetration penetration of all electrification housing brand. ② Proactive activities to promote penetration of ecocute (CO2 refrigerant heat pump water heater) heater). ③ Expansion of sales activity in cooperation with subsub-users. ④ Strengthening of sales activity to collective housing and existing existing homes.
［％］
［Houses］ 35,000
No. of All-Electric Houses
30,000
(FY2010Target ： 24,712)
2.5
20,000
3.2
3.0
Diffusion Rate of All-Electric
25,000
1.6
10,000
10,589
Adoption rate （results for FY2009） FY2009）
AllAll-electric adoption rate in newly built houses = 12.6% multi-family dwellings etc.) 2.5 (included multiAllAll-electric adoption rate in newly built houses = 56.3%
1.5
1.3
8,120
【Reference】 Reference】
3
2
2.0
15,000
5,000
3.5
(FY2010Target： 3.5)
13,652
17,123
20,612
22,429
1 0.5 (FY) 0
0 2005
2006
2007
2008
The Okinawa Electric Power Company, Inc.
2009
2010.9
26
Q6.What is the Current State of the New Demand Creation Through the Promotion of Commercial Electrification Equip ment ? Equipment 1. Sales target (in total of three years from FY2010 to FY2012): 30 million kWh * Electrification system (electric airair-conditioning system including heat storage, electrified kitchen and electrified water heater)
2. Approach for the promotion and diffusion. ① Implementation of electrification proposal activities suitable for the power usage of customers. ② Promotion of heat pump equipment (air(air-conditioning and water heaters) ③ Expansion of sales activity in cooperation with subsub-users. ④ Launching sales activities that customers in various industries. industries.
¾ Sales target (in total of three years from FY2010 to FY2012): 30 million kWh The demand for commercial electrification equipment (10Thousands of kWh)
FY
2006
2007
2008
2009
2010.9
2010～2012 Target
Commercial Electrification Equipment
417
433
876
626
461
3,000
The Okinawa Electric Power Company, Inc.
27
Q7.What is the Past Trend of Ordinary Income and What is the Forecast for this Fiscal Year? Trend in Ordinary Income (Non-Consolidated)
（billion yen） yen）
（%）
7.0
16.0 Ordinary Income
6.0 14.0
5.5
5.2 4.5
4.5
Rate Revision -0.45% (FY 2008)
4.6 10.0
10.0
Rate Revision -3.72% (FY 1997)
8.3 8.0
4.0
14.0
11.5
12.0
6.0
ROA (Operating Income/Total Assets) 6.0 5.6
Rate Revision -5.96% (FY 1995)
5.9
3.4
2.8
4.0
4.2 3.7
8.6
5.1
3.9
3.9 3.7
5.7 4.8
4.0 7.0
3.5
3.0 2.7
Rate Revision -3.78% (FY 2000)
2.0
5.0
8.8
6.6
2.7
11.3 4.3
9.7
4.5 7.7
7.3
10.0
6.0
Rate Revision -5.79% (FY 2002)
Rate Revision -3.27% (FY 2005)
Rate Revision -3.24% (FY 2006)
2.0 1.0
0.0
0.0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (Forecast) Gushikawa Thermal Power Station Start of operations Generator No.1: FY 1993 Generator No. 2: FY 1994
Effects due to cost processing at the time of accounting standard changes in association with the introduction of retirement benefit accounting. (FY 2000)
The Okinawa Electric Power Company, Inc.
Kin Thermal Power Station Start of operations Generator No. 1: FY 2001 Generator No. 2: FY 2003
Reduction in retirement benefit costs due to revision of the retirement benefit system. (FY 2005)
28
Q8.What are the trends of the Capital Expenditure and Free Cash Flows? （billion yen)
80 70.9 70 60 50
Purchases of Capital Assets
65.3 52.0 47.9
34.5 28.7
28.2
30
10
46.9 36.6
40
20
Free Cash Flows
58.8
23.9
28.9
26.3
24.1 19.3
Gushikawa Thermal Power Station Start of operations Generator No.1: FY 1993 Generator No. 2: FY 1994
15.6
15.8
17.5
20.1
0 -10 -20 -30
Kin Thermal Power Station Start of operations Generator No. 1: FY 2001 Generator No. 2: FY 2003
-40 -50
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 （FY）
The Okinawa Electric Power Company, Inc.
29
Q9.What is the Status of Wind and Solar Power Electricity Generation Facilities? List of OEPC Group’s New Energy Facilities No. of Facilities （No. of Power Plants） Plants） Wind Power
OEPC Okinawa New Energy Development Co
Solar Power
OEPC Okinawa New Energy Development Co
Total
Electricity Output （kW） kW）
6 (8)
3,120
7 (12)
14,325
10
1,182
1
10
24
18,637
Iejima wind Power (2Power Plants) ：1,200kW Solar Power ：10kW
Urasoe Branch Solar Power:10kW Head Office Solar Power:2kW Naha Branch Solar Power:12kW
Iheya Wind Power (1Power Plant) :300kW
Sosu Wind Power (2Power Plants) :3,600kW
Aguni Wind Power (1Power Plant) :250kW
Nakijin Wind Power (1Power Plant) : 1,995kW Shin Karimata Wind Power (2Power Plants) :1,800kW Miyako Wind Power: (1Power Plant) : 600kW
Tokashiki Solar Power: 108kW
Gushikawa Wind Power (1Power Plant) : 1,950kW Sashiki Wind Power (2Power Plants) :1,980kW Kitadaito Solar Power :140kW (including Micro grid 100kW)
Sadefune Wind Power (2Power Plants) : 1,800kW Yonaguni Wind Power (2Power Plants) :1,200kW Yonaguni Solar Power (Micro grid) :150kW Hateruma retractable Wind Power (2Power Plants) :490kW
Miyako Solar Power: 490kW Miyako Branch Solar Power: 10kW Tarama Wind Power(1Power Plant): 280kW Tarama Solar Power (Micro grid) :250kW Yaeyama Branch Solar Power: 10kW
(As of September 30, 2010)
OEPC Group has new energy facilities with total output of 18,637kW 18,637kW （wind power: 17,445kW, solar power: 1,192kW） 1,192kW） Introducing Plan of New Energy Facilities. 9 Retractable windwind-power generator (Minamidaito (Minamidaito Island:2 plants: 245kW each, from January 2011). 9 New Energy verification studies for the Remote Island Independent Independent System (total 4,000kW solar power in Miyako island).
The Okinawa Electric Power Company, Inc.
30
Q10.What is a retractable wind -power generator? wind-power Overview of retractable wind-power generator Place
Hateruma Island
Manufacturer/country of manufacture
Vergnet/France Vergnet/France
Rated power output
245kW
Wind speed for power rating/startrating/start-up/stoppage
13m/s, 4m/s, 20m/s
Number of blade
Two
Diameter of blade
32m
Height of hub
38m
Advantages ¾ Wind-power generator can be folded nearly 90 degrees so that damages by big wind in typhoon can be avoided by folding it. ¾ Large-size cranes are not needed to construct the wind-power generator to enable construction in hilly areas. ¾ Wind-power generator is retractable, making it possible to perform maintenance on the ground. ¾ Wind-power generator is supported by wires.
※Also, we are planning to introduce retractable windwind-power generator at Minamidaito. Minamidaito.
The Okinawa Electric Power Company, Inc.
31
Q11.What is the New Energy verification studies for the Remote Island Independent System? Introduction ratio
Miyako Island Ikema Island Existing wind-power generation facilities 600kW X 1 900kW X 2
Ogami Island Control system
Maximum demand for electricity
50,000kW
NewlyNewly-established solar power generation facilities
4,000kW
Storage battery
4,000kW
Existing internalinternalcombustion power
Irabu 伊 良部Island 島
Existing wind-power generation facilities 900kW X 2
Shimoji 下地島Island
Existing new energy facilities Installation area Facilities utilization rate
Kuruma Island
8%
Maximum demand for electricity
Storage battery: 250kW Existing wind-power generation facilities: 280kW
WindWind-power generation 4,200kW
About 12%
Storage battery
3.0MWX 1
・NAS battery:4.0MW ・lithiumlithium-ion rechargeable battery:200kWh
(1) Purpose The purpose of performing introduction demonstration for the independent independent power generation system of Remote Islands with different scale of system system is as follows: ■ Grasping the impact of largelarge-scale introduction of solar power generation to the actual system ■ Calculation of allowable amount of solar power generation introduction introduction ■ Obtaining knowledge on stabilization technology concerning the system (2) Plan ■ Grasping the impact of solar power generation on four remote islands islands with different scale of system ■ Analyzing operation data on solar power generation and secondary secondary battery ■ Verifying the method of system stabilization for remote island independent system
Storage battery
250kW
Installation area Facilities utilization rate
28,771m2
Introduction ratio
Yonaguni Island
Maximum demand for electricity
Solar power generation facilities:150kW
Storage battery: 150kW
Existing wind-power generation facilities: 600kW×2
Solar power generation facilities: 100kW
Storage battery: 100kW
2,063m2 About 12% 7% 2,160kW
Storage battery
150kW
Existing internalinternalcombustion power
2,910kW
Existing new energy facilities
1,200kW
Installation area
1,251m2 About 12% 12%※ 12%※1
Maximum demand for electricity
860kW
NewlyNewly-established solar power generation facilities
100kW
Storage battery
100kW
Existing internalinternalcombustion power
1,540kW
Existing new energy facilities
４0kW
Installation area
839m2
Facilities utilization rate
The Okinawa Electric Power Company, Inc.
280kW
150kW
Introduction ratio
Existing solar power generation facilities: 40kW
1,590kW
NewlyNewly-established solar power generation facilities
Facilities utilization rate
Kitadaito Island
1,160kW
250kW
Existing new energy facilities
Solar power generation facilities:250kW
22%
NewlyNewly-established solar power generation facilities
Existing internalinternalcombustion power
76,500kW
Solar power generation
150kW X 4 4kW X 100
Introduction ratio
Tarama Island
※1: Including existing solar power generation facilities(40kW) : 16%
About 12%
32
Q12.How do Current Electricity Rates Compare to Rates at Other Companies? While the detailed comparison of electricity rates is not available due to limited amount of reported data, the following is the comparison of electricity rates for the main supply contracts. Model Unit Rates for All Companies （As of November 2010, including fuel cost adjustments and consumption consumption taxes ）
Metered Residential
（ Unit: yen/kWh） yen/kWh）
OEPC
Co. A
Co. B
Co. C
Co. D
Co. E
Co. F
Co. G
Co. H
Co. I
24.50
23.90
22.59
21.82
21.86
21.16
21.48
22.69
22.07
20.94
⑩
⑨
⑦
④
⑤
②
③
⑧
⑥
①
19.99
17.42
17.47
17.03
16.83
15.50
16.55
17.67
16.41
16.29
⑩
⑦
⑧
⑥
⑤
①
④
⑨
③
②
17.78
16.33
15.92
15.46
16.33
14.83
15.75
16.53
16.52
15.82
⑩
⑥
⑤
②
⑥
①
③
⑨
⑧
④
Model Basic Unit 300
Commercial Use Electricity （High Voltage） Voltage） Model Basic Unit 250 （Power Factor 100%） 100%）
HighHigh-voltage Power A Model Basic Unit 250 （Power Factor 100%） 100%）
Note: The circled numbers indicate price level rankings (higher numbers numbers indicate more expensive rates).
The Okinawa Electric Power Company, Inc.
33
Q13. What are the CO22 Emission Volumes by Fuel Type? LNG (Liquefied Natural Gas) produces less carbon dioxide, a major cause of global warming, than coal or oil. Chart: Comparison of CO2 Emission Volumes by Fuel Type Fuel Type
CO2 Emission Volume Per Unit Heat Value [g-CO2/MJ] *1
vs.Coal
Coal
90.6
C Heavy Oil LNG
vs.Oil *3
CO2 Emission Volume Per kWh [kg-CO2/kWh] *2
vs.Coal
vs.Oil *3
1.00
1.27
0.84
1.00
1.24
71.5
0.79
1.00
0.68
0.81
1.00
49.5
0.55
0.69
0.35
0.42
0.51
*1 The values from the Law Concerning the Promotion of the Measures to Cope with Global Warming were used as the CO2 emission factors to calculate gg-CO2/MJ. *2 Thermal Efficiency at Generation End of 39%, 38% and 51% were assumed assumed for coal, oil and LNG respectively in calculations. *3 Oil comparisons were based on type C heavy oil. The Okinawa Electric Power Company, Inc.
34
Q14. What is the Current State of the Progress of Discussion in the Gas Industry ? As Ｔhe integrated energy company As LNG is expected to have potential needs as raw material for town gas and industrial fuel for its superior environmental and safety profiles, the Company is considering the supply business of LNG which will be introduced in the Yoshinoura Thermal Power Station.
Current status of the gas business in Okinawa (Conversion of heat consumed in FY2009) Public gas (Okinawa gas) LNG conversion: approximately 20,000t per year.
Current status The Company is proceeding with discussions with Okinawa Gas Co., Ltd., which is a public gas provider in Okinawa Prefecture, about LNG supply and business schemes including wholesale supply system while assessing the status of procurement of LNG fuel and the progress of construction works of Yoshinoura Thermal Power Plant.
For the promotion of LNG In addition to the wholesale supply of LNG to Okinawa Gas, the Company is examining the possibility of supplying it to heavy consumers for commercial and industrial uses in consideration of energy environment and market trends.
The Company aims to launch gas business from 2015 after the launch launch of operation at the Yoshinoura power plant， plant，in consideration of the LNG fuel supply situation and the stable operation at the Yoshinoura thermal plant.
11.1%
2.8%
LP gas
86.1% Source： Source：Agency for Natural Resources and Energy website, Japan LP Gas Association website, Gas Energy newspaper
【Reference: Corporate profile of Okinawa Gas】 Gas】 Date of foundation : July 22, 1958. Capital : JPY 250,222,000 Sales :
Perspective for the launch of business
community gas
JPY 6.3bn (December 2009)
Supply area : Most of Naha city, A part of Urasoe city, Tomishiro city, Haebaru town, Nishihara town, Nakagusuku village No. of customers: General gas: approx.52,000 units LP gas: approx.16,000units
The Okinawa Electric Power Company, Inc.
35
Q15. What is the PCB Waste Treatment ? PCB wastes must be treated by July 2016 in conformity with the "Special Measurement Law on Promotion of Appropriate Treatment of Polychlorinated Biphenyl Wastes."
■As for the highly-concentrated PCB wastes (transformers, capacitors, etc.), we concluded a commission contract with the Kitakyushu Facility of Japan Environmental Safety Corporation (JESCO) in May 2009, and began commissioned treatment in December 2009. The quantities possessed and treated of highly-concentrated PCB wastes (as of March 31, 2010) Quantity possessed
Equipment
Quantity treated
High voltage and low voltage capacitors
519 units
51 units
High voltage and low voltage transformers
9 units
－
Ballasts, etc.
102 units
－
Metal pollutants, sludge, etc.
Approximately 430 kg
－
●The storage condition of PCB wastes
■With respect to low-concentrated PCB wastes (contaminated oil, pole transformers, etc.), the government has conducted systemic revisions necessary for treatment measures of low-concentrated PCB wastes such as a partial revision of the Waste Disposal Law in an attempt to promote the treatment of low-concentrated PCB wastes. While carefully watching the government's action on the treatment measures, we will continue to review safe and low-cost treatment measures and complete the treatment of the wastes by the legal term. We already set aside provisions for PCB waste treatment except some PCB wastes. (FY2004 :highly-concentrated PCB , FY2010 :low-concentrated PCB )
■ PCB wastes are properly managed in accordance with laws and ordinances on the premises of the company. ■ In addition to storage management facility patrols conducted monthly by each storing department, we perform a patrol by a combination of relevant departments in the company on a regular basis (once a year) in an attempt to strengthen storage management. ■ With regard to the storage condition, we report to the Okinawa Prefectural Government on a regular basis (once a year) in conformity with the "Special Measurement Law on Promotion of Appropriate Treatment of Polychlorinated Biphenyl Wastes." The Okinawa Electric Power Company, Inc.
36
Change in Okinawa Electric Power ’s Stock Price Power’s Change in Stock Price (January 5, 2009～ 2009～September 30,2010) Okinawa Electric Power
Average of 9 Other Power Companies
Nikkei Average
¥6,520
¥2,567
¥9,043
AllAll-time high
¥6,520 as of January 5, 2009(± 2009(±0.0%)
¥2,567 as of January 5, 2009(± 2009(±0.0%)
¥11,339 as of April 5, 2010(+25.4%)
AllAll-time low
¥3,885 as of September 30, 2010(2010(-40.4%) 40.4%)
¥1,927 as of November 10, 2009(2009(-24.9%)
¥7,055 as of March 10, 2009(2009(-22.0%)
Stock price on January 5, 2009 2009
Latest stock price Closing quotation on September 30 , 2010 2010
400 350 300
¥3,885(3,885(-40.4%)
Changes in the Stock Price of the Company, the Nikkei Stock Average and Average Stock Price of Other Electric Power Companies * Each stock price indexed to the closing quotation at the time of listing of our company (March 1, 2002) as 100
OEPC
¥1,943(1,943(-24.3%)
¥9,369(+3.6%)
Changes in the Highest and Lowest Prices of the Stock of the Company
(￥)） （円 10,000
8,800
9,000 7,880
8,000 6,580
7,000
6,700
6,750
250 6,000
200
Nikkei Average 5,000
150
50
5,110
4,000
100
3,000
Average of 9 Other Power Companies
0 02/3 02/9 03/3 03/9 04/3 04/9 05/3 05/9 06/3 06/9 07/3 07/9 08/3 08/9 09/3 09/9 10/3 10/9
The Okinawa Electric Power Company, Inc.
5,360
6,200
4,850
4,660
4,380 2,770
3,080
3,870
3,460 2,925
2,000
2,250
2,370
2002
2003
1,000 2004
2005
2006
2007
2008
2009
2010（年 ）
37
Earnings Per Share and Payout Ratio Earnings per Share and Payout Ratio (Non-consolidated) FY Net Income
Million yen
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2,606
4,807
4,430
5,594
7,591
9,163
6,398
6,590
3,635
7,293
Earnings per Share
Yen
171.77
316.86
286.52
363.37
494.77
571.05
402.25
376.84
207.89
417.26
Dividend per Share
Yen
60
60
60
60
60
60
60
60
60
60
34.9
18.9
20.9
16.5
12.1
10.5
14.9
15.9
28.9
14.4
Payout Ratio
Date
% Issued number of shares of common stock
1992.02.10
14,728,132
Listed
1995.11.20
14,875,413
Split 1 : 1.01
1999.05.25
15,172,921
Split 1 : 1.02
2005.05.20
15,931,567
Split 1 : 1.05
2007.04.01
17,524,723
Split 1 : 1.10
The Okinawa Electric Power Company, Inc.
38
Reference
・ http://www.okiden.co.jp/english/index.html
(The Okinawa Electric Power Company Incorporated)
・ http://www.pref.okinawa.jp/english/index.html (Okinawa Prefecture) ・ http://www.fepc.or.jp/english/index.html (The Federation of Electric Power Companies of Japan) ・ http://criepi.denken.or.jp/en/
The Okinawa Electric Power Company, Inc.
(Central Research Institute of Electric Power Industry)
39
This h Thisdocument documentincludes includesstatements statementsconcerning concerningfuture futureresults. results.Suc Such statements ther statementsare arebased basedon oncalculations calculationsand andpredictions predictionsand andare arenei neither definite definitenor norguaranteed. guaranteed.Please Pleasebe beaware awarethat thatfuture futureresults resultsmay may change changeininaccordance accordancewith withchanges changesininassumptions assumptionsrelated relatedtotothe the management environment and the like. management environment and the like.
【【Enquiries Enquiries regarding 】 regardingthis thisdocument document】 Finance FinanceSection, Section,Accounting Accounting&&Finance FinanceDepartment Department Okinawa OkinawaElectric ElectricPower PowerCompany, Company,Inc. Inc. TEL -98-877-2341 FAX -98-879-1317 TEL：： +81 +81-98-877-2341 FAX：： +81 +81-98-879-1317 Email Email：：[email protected] [email protected]
The Okinawa Electric Power Company, Inc.
November 2010 The Okinawa Electric Power Company, Inc.
Contents Characteristics of the Business Base
････････････････････
1
Demand for Electric Power
････････････････････
2
Competition with Private Power Generation Operations
････････････････････
3
Power Generation Facilities (1/4)～ (1/4)～(4/4)
････････････････････
4～7
Fuel
････････････････････
8
The Fuel Cost Adjustment System
････････････････････
9
Trend of Average Fuel Price and Standard Fuel Price
････････････････････
10
Recent changes in standard household electricity charges
････････････････････
11
The New Buyback Program for Photovoltaic Generation
････････････････････
12
Improvement of Remote Island Income and Expenditure (1/2)～ (1/2)～(2/2)
････････････････････
13～14
Addressing the global warming issues
････････････････････
15
Q&A etc.
････････････････････
16～
The Okinawa Electric Power Company, Inc.
Characteristics of the Business Base Advantage Demand for Electric Power
Competition
Increasing demand as population increasing As the proportion of energy for consumer use is high, the effects effects of business fluctuations are low Severance from competition among electric power companies on account account of its isolated system No competition with PPS (Power Producers and Suppliers) The advance of private power generation operations is limited (Prevention (Prevention of demand withdrawals through Progressive Energy Corp , a subsidiary subsidiary of OEPC.)
Disadvantage Electric Power Generation Facilities
Due to having an isolated system, it is necessary to have a high margin of power generation reserves Electrical power source composition reliant only on oil and coal
Fuel
As oil and coal are the only fuels used, high commodity prices exert exert a great influence
Remote Islands
With remote islands where cost efficiency is low, the Remote Islands Islands Company constantly records losses
The Environment
Dependent on fossil fuels (oil and coal) with a high environmental environmental burden
The Okinawa Electric Power Company, Inc.
1
Demand for Electric Power Stable growth is forecasted for demand for electric power, centering on increased demand for consumer use accompanying population increases. （million kWh) 10,000 9,000 8,000
（thousand people） 1,500 8,674 1,450
Consumer Use Industrial Use Population(Okinawa) 7,491 7,476
7,478
7,492
6,000
1,373
1,376
1,386
6,177
6,153
6,155
1,394
1,350
5,000 4,000
1,400
1,420
7,000
7,243
（84%） 84%） （82%） 82%）
（82%） 82%）
（82%） 82%）
1,300
（83%） 83%）
6,184
1,250
3,000 1,200 2,000 1,000
1,150 1,314
（18%） 18%）
1,323
（18%） 18%）
1,323
（18%） 18%）
1,308
（16%） 16%）
（17%） 17%）
0 2007
2008
2009 （%）
Okinawa Annual Average Groｗ Groｗth Rate
Demand for Electric Power
19981998-2008
20082008-2019
Consumer use
1.2（ 1.2（1.8） 1.8）
1.5（ 1.5（1.6） 1.6）
Industrial use
1.4（ 1.4（1.4） 1.4）
0.7（ 0.7（0.7） 0.7）
1.2（ 1.2（1.7） 1.7）
1.4（ 1.4（1.4） 1.4）
Total
Note : Figures in brackets are post temperature correction.
The Okinawa Electric Power Company, Inc.
2010(Forecast)
1,431
1,100 2019(Estimate) (FY)
・・・・
Nationwide (Excluding Okinawa) Annual Average Groｗ Groｗth Rate
Demand for Electric Power Total
（%）
19981998-2008
20082008-2019
Consumer use
1.5（ 1.5（1.6） 1.6）
1.0（ 1.0（1.0） 1.0）
Industrial use
0.8（ 0.8（0.8） 0.8）
0.6（ 0.6（0.6） 0.6）
1.2（ 1.2（1.3） 1.3）
0.9（ 0.9（0.9） 0.9）
Source: Japan Electric Power Survey Committee (Growth rates were calculated from loads for distribution) Note: Figures in brackets are post temperature correction.
2
Competition with Private Power Generation Operations
The proportion of private power generation in Okinawa is 3% Progressive Energy Corp’ Corp’s share of private power generation in commercial use sectors is 55% (As of September 30, 2010)
Trend in the Permitted Output of Private Power Generators （MW) 80
71 (52)
70 60 50
Commercial Use Industrial Use 66 (44)
57 (46)
40
52 (38)
30 20 10 0
Proportion of private power generation in Okinawa
57 (41)
56 (40)
43 (35)
42 (34)
14 (6)
14 (6)
14 (6)
2006
2007
2008
2009
62 (41) 42 (34) 20 (7) 2010.9 (FY)
Trend in independent power generation (output and number of facilities)
Switch to independent power generation Total
Private Power Generation
※ The figures in brackets show number of cases.
14 (6)
Switch to power purchase
Status of market penetration by private power generators
FY 2007
FY 2008
FY 2009
FY 2010
-5MW (-8Cases)
-11MW (-5Cases)
-1MW (-2Cases)
-1MW (-2Cases)
0 Case
1MW (2Cases)
α (1Case)
7MW (3Cases)
-5MW (-8Cases)
-9MW (-3Cases)
-1MW (-1Case)
6MW (1Case)
* Totalizing only continuously used power generators interconnected to the company's power grid. * Excluding wind power, solar power and the company's facilities. * Retroactively revised due to a change in the counting method. (Sep. 2010)
The Okinawa Electric Power Company, Inc.
3% 62MW
Our Supply 97% 97% 2,236MW
Commercial Use 2% Industrial Use 1%
* Figures for OEPC supply include Electric Power Development Co, Ltd.
Proportion of PEC’ PEC’s share of private power generation in Okinawa Commercial Use Only Private Ownership 38% 38% 16MW （15 Cases） Cases）
ＰＥＣ 57% 57% 24MW （17 Cases） Cases）
Total 42MW (34 Cases) Other Companies Total 5% 2MW （2Case） 2Case）
*PEC: Progressive Energy Corp. * The aggregate sum may not be equal to the total due to rounding off.
3
Power Generation Facilities 〔〔１/4〕 １/4〕 Generation Reserve Margin Demand-Supply Balance （10 Thousands of kW、 kW、%）
OEPC
Peak Load Supply Capacity Reserve Capacity Reserve Margin(%)
2009 【Result】 Result】
2010 【Result】 Result】
2014
2019
142
138
152
164
196 (171)
184 (159)
214 (194)
228 (212)
53 (28)
46 (21)
62 (42)
64 (49)
37.5 (19.9)
33.3 (15.2) 40.4 (27.7)
39.1 (29.8)
Note :The figures in brackets show demanddemand-supply balances when gas turbines are excluded.
■
■ ■
（10 Thousands of kW、 kW、%）
10 Major Electric Power Companies 2009 【Result】 Result】
2010
2014
2019
Peak Load
15,512
16,965
17,603
18,257
Supply Capacity
19,540
19,414
19,507
20,274
4,028
2,449
1,903
2,017
26.0
14.4
10.8
11.0
Reserve Capacity Reserve Margin(%)
(Source :Agency for Natural Resources and Energy, “Summary of Electric Power Supply Planning ,FY2010” ,FY2010”)
A high generation reserve margin is necessary for such reasons as as the inability to exchange power with other electric power companies because of OEPC’ OEPC’s isolated system and the responsibility to provide stable supply supply as a public utility. The power supply reserve is achieved by securing the equivalent reserve capacity of the largest single generator so that it is possible to provide stable supply even if the largest largest unit breaks down. Part of the margin is provided by gas turbines, which carry lower lower investment burden (permitted output: 266MW).
Although there are factors encouraging increased facility investment investment associated with the growth of electric power demand, OEPC is making efforts to suppress the level of facility investment and promote load leveling and the like, aiming at efficient facility formation. The Okinawa Electric Power Company, Inc.
4
Power Generation Facilities 〔〔2/4〕 2/4〕 Power Supply Composition ■ Power supply is dependent on oil and coal because of the difficulty of finding sites for hydro or nuclear power generation due to factors including geographic and topographical characteristics and constraints on the scale of demand.
■ Introducing LNG thermal power stations to diversify power supply sources Improving security for the stable supply of electric power Electric Power Composition Ratio (Generating End) Totals for the 10 Major Electric Power Companies (FY2009: Estimated Results) Nuclear Power 29.2%
Hydro Power 8.1%
Oil,etc 7.6%
Coal 24.7%
New LNG Energy, 29.4% Others 1.1% (Source:Agency for Natural Resources and Energy, “Summary of Electric Power Supply Planning ,FY2010” ,FY2010”)
The Okinawa Electric Power Company, Inc.
Okinawa Electric Power Company (FY2009:Results) Coal 78%
Oil 21%
Image of Situation Following the Start of LNG Thermal Power Station Operation
New Energy, Others 1%
（FY2019） Coal 53%
Oil 16% LNG 30%
New Energy, Others 1%
* Both pie charts include energy supplied by other companies.
5
Power Generation Facilities 〔〔3/4〕 3/4〕 ～ Yoshinoura LNG Thermal Power Plant ～ Construction Purpose
Okinawa Prefecture
【Site for Power plant construction】 construction】
Response towards steady demand increases Environmental measures Æ Avoidance of large environment costs Fuel diversification Æ Improvement of energy security Search for new business opportunities making efficient use of LNG LNG
Investment Plan Power generation facilities, Generators No.1 & 2 (251,000 kW each) each) 2 LNG terminals (140,000 kl each) Including other expenses, the operation is on the scale of 100 billion billion yen The forecast investment peak is from FY2010 – FY2011 Conceptual Image of the Completed Facility
Construction Schedule 20032003-2007 Environmental assessment, etc., investigation of various procedural matters, facility specifications, etc.
2007 -2012 Construction work
Nov. 2012 Start of operations at Generator No.1
May 2013 Start of operations at Generator No.2
From 2016 on: Start of operations at Generators No.3 & 4
Main Points for 2010 ・Foundation work for Gas turbine structure ・Completed construction to mount an LNG tank on the rooftop ・Started the groundwork for the service building
The Okinawa Electric Power Company, Inc.
6
Power Generation Facilities 〔〔4/4〕 4/4〕 ～ Yoshinoura LNG Thermal Power Plant ～ Effects on Finance （Past Tendencies） The balance of interest bearing liabilities increased Large depreciation burden and decreased income associated with largelarge-scale facility investment
(Billion Yen)
Trend of Ordinary Income
16 14 12
Gushikawa Power Station Generator No.1:March 1994 Generator No.2:March 1995
KIn Power Station Generator No.1:February 2002 Generator No.2:May 2003
10 8
Countermeasures
6
Creation of strong financial characteristics able to withstand the the Yoshinoura Thermal Power Station investment burden Æ Control the increase of the balance of interest bearing liabilities Reduction of the depreciation burden associated with the start of of operations at Yoshinoura Thermal Power Station Æ Investigating the way for cost leveling including the finance lease lease for the LNG terminals.
Application of usual finance to electricity operation as a whole Earlier depreciation as previously using a fixed percentage method
2 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
(Billion Yen)
Trend in Balance of Iterest Bearing Liabilities
310 290 270 250
Perspective Power Generation Facilities
Application of retirement benefit accounting
4
LNG Terminals Aim at stable costs for a part of fuel costs Currently investigating cost leveling through lease finance
230 210 190 170
Gushikawa Power Station Generator No.1:March 1994 Generator No.2:March 1995
KIn Power Station Generator No.1:February 2002 Generator No.2:May 2003
150 130 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
•If finance lease is adopted, the company applies onon-balance sheet and nonnon-transfertransferownership contracts. The Okinawa Electric Power Company, Inc.
7
Fuel （$/bbl） 150.00
Great effects are exerted on the company by movements in fuel prices. prices. The outlook of fuel prices is uncertain due to the rise trend with a hint of economic recovery. 130.00 110.00 90.00
70.00 FY08 Average Price 50.00
90.52$/bbl
FY09 Average Price 69.40$/bbl
FY10 Apr-Sep 78.36$/bbl
30.00
2008.4
（$/bbl） 150.00
2008.7 2008.10 2009.1
2009.4
2009.7 2009.10 2010.1
2010.4
2010.5
2010.6
2010.7
2010.8
2010.9
Trend in the CIF Customs Cleared Price of Oil
（$/t） 150.00
130.00
130.00
110.00
110.00
90.00
90.00
70.00
70.00
50.00
FY08 Average Price 90.52$/bbl
FY10 Apr-Sep 78.36$/bbl
FY09 Average Price 69.40$/bbl
30.00
Trend in the CIF Customs Cleared Price of Coal FY09 Average Price 97.65$/t FY08 Average Price 133.88$/t
FY10 Apr-Sep 108.03$/t
50.00 30.00
2008.4 2008.7 2008.10 2009.1 2009.4 2009.7 2009.10 2010.1 2010.4 2010.5 2010.6 2010.7 2010.8 2010.9 LongLong-term contracts on coal and transport ships
Diversification of fuel oil suppliers through regular purchase
Procurement that considers heavy oil market condition (Spot purchase)
Initiatives of the company (fuel)
Dispersion of ports of shipment and shift to shortshort-distance sources Efficient use of the’ the’ ShinryoShinryo-maru’ maru’ and COA(contract of affreightment) affreightment) Expansion of the introduction of subsub-bituminous coal, which has a low environmental burden
Achieving stable fuel supply and pursuing cost reductions
2008.4 2008.72008.102009.1 2009.4 2009.72009.102010.1 2010.4 2010.5 2010.6 2010.7 2010.8 2010.9
Activities this term • Diversification of fuel oil suppliers through regular purchase • Reduction of fuel costs via utilization of spot market • Achieving stable coal supply and fuel cost reduction via long term term contracts for coal and transport vessels • Secure stable supply and reduced fuel cost by dispersing embarkation port and shifting to closelyclosely-located supply sources. • Reduce transportation cost by utilizing “Shinryomaru” Shinryomaru”, a specialized carrier for low transportation cost, and competitive COA (Contract of Affreightment). Affreightment). • Life expansion of ash processing facilities and the reduction of fuel costs by increasing the use of subsub-bituminous coal which has lower ash, lower sulfur and lower environmental load than bituminous coal.
* Although there is a time lag, fuel price changes are reflected to to the electricity rates through the Fuel Cost Adjustment System. The Okinawa Electric Power Company, Inc.
8
The Fuel Cost Adjustment System Summary of the System
The fuel cost adjustment system was introduced for the purpose of clarifying the “internal factors” such as the results of efforts to promote management efficiency at electric power companies and reflecting “external factors” onto electricity rates such as exchange rates and oil and coal and LNG prices that alter the economic situation. Range of fuel cost adjustment • We will calculate the average fuel price based on the prices of crude oil, coal and LNG on the trade statistics during the period between five months and three months prior to the fuel cost adjustment, and electricity charge will be automatically adjusted each month by comparing the above price with the standard fuel price at the time of electricity rate revision. • The maximum level of fuel cost adjustment will be 50% . • There will be no lower adjustment limit. The Okinawa Electric Power Company, Inc.
Conceptual drawing of the fuel cost adjustment system
E.g. The average fuel price during the period between December and February of the following year will be applied to fuel cost adjustment for the electricity charge for May in the following year. The average fuel price during the period between January and March will be applied to fuel cost adjustment for the electricity charge for June in the same year.
Fuel price
3-month average fuel price
Oct.
Nov.
Dec.
Jan.
Feb.
2-month time-lag
Mar.
Apr.
May
Jun.
Official announcement of trade statistics
Fuel cost adjustment
Fuel cost will be adjusted each month.
Electricity charge for May will be applied to the electricity use starting as early as April 1.
9
Trend of Average Fuel Price and Standard Fuel Price Trend of Average Fuel Price and Standard Fuel Price（Since July 2006） (Yen/kl)
【Standard Fuel Price】 Price】
40,000 35,000 30,000
Standard Fuel Price (Yen/kl (Yen/kl))
38,000
Jul. 2006 Revision
Sep. 2008 Revision （Present） Present）
18,700
25,100
25,100 22,300
25,000
20,500
Standard Fuel Price Average Fuel Price
20,900
18,900
20,000 ※September 2008 Revision
15,000
※From May 2009, the fuel cost adjusted unit price was revised each month
09 .4 M 5M 6M 7M 8M 9M 10 11 M 1 M 10 2 M .1 M 2M 3M 4M 5M 6M 7M 8M 9M 10 11 M M
2Q
4Q
3Q
08 .1 Q
4Q
3Q
2Q
07 .1 Q
4Q
06 .2 Q
3Q
10,000
10.3M
10.4M
10.5M
10.6M
10.7M
10.8M
10.9M
10.10M 10.11M
09.10M 09.11M ～ ～ 09.12M 10.1M
09.12M ～ 10.2M
10.1M ～ 10.3M
10.2M ～ 10.4M
10.3M ～ 10.5M
10.4M ～ 10.6M
10.5M ～ 10.7M
10.6M ～ 10.8M
19,700
19,900
20,000
20,500
21,300
22,100
22,100
21,500
42,330
43,843
44,530
44,267
44,888
46,260
47,217
45,829
42,867
8,280
8,140
8,095
8,290
8,570
8,978
9,493
9,831
9,934
Period for estimating a fuel price range
Period for applying the Fuel cost adjustment system
09.12M
10.1M
10.2M
Period for estimating a fuel price range
09.7M ～ 09.9M
09.8M ～ 09.10M
09.9M ～ 09.11M
Average Fuel Price（ Price（yen/k yen/kｌ）
20,400
20,000
19,800
19,500
Average Crude Oil Price（yen/k yen/kｌ）
41,714
41,057
41,734
9,167
8,963
8,647
Average Coal Price(yen/t） Price(yen/t）
【Method of calculating Average Fuel Price】 Price】 Average Fuel Price ＝ A×α＋ Average coal price per ton in each quarter ×α＋B×β A : Average crude oil price per kiloliter in each quarter B : Average ※
α and β are coefficients in Provisions of supply to calculate the average average fuel price.
The Okinawa Electric Power Company, Inc.
(Reference α:0.2410 ､β:1.1282 ､β:1.1282 Provisions of supply Sep. 2008 effective)
10
Recent changes in standard household electricity charges ○Changes in standard Household electricity charges 〔YEN〕
8,242
8,000
7,975
2008.9.1 Revision 7,675
7,447 7,399
7,393
7,384
7,327
7,336
7,360
7,360
7,405 7,342
7,351
7,333
7,315 7,261 7,186
7,204
7,213
7,000
6,500 9
10 11 2008
12
1
2
3
4
5
6
2009
7
8
9
10
11
12
1
2
3
4
5
6 2010
7
8
9
10
11
※1 300kWh/Month ※2 From Jan.2009 to Apr. 2009, electricity charge after special measures are implemented were applied. ※3 From May 2009 to March 2010, electricity charge after special special measures and transitional measures are implemented were applied. applied.
The Okinawa Electric Power Company, Inc.
11
The New Buyback Program for Photovoltaic Generation The New Buyback Program for Photovoltaic Generation was launched on November 1, 2009, based on the Japanese state law to cover the cost of introducing solar photovoltaic power power generation facilities by the entire nation and promote the introduction of solar photovoltaic generation with the aim of reducing reducing CO2 emissions domestically. This system obliges electric power companies to purchase surplus electricity, which is generated using solar photovoltaic power facilities and meets the requirements, at the unit price specified specified in the law for 10 years. This program is designed to be “an allall-participating system," system," in which all customers assume the cost incurred for the purchase as photovoltaic generation surcharge (PV (PV surcharge) according to their electricity usages. ■ Unit price of electricity purchase (FY2010) （The maximum electricity receivable*1） Not eligible for the purchase
500kW
50kW
10kW
50kW or greater Less than 500KW*2
24 yen （20 yen*3）
10kW or greater Less than 50kW
24 yen （20 yen*3）
Less than 10kW
48 yen （39 yen*3）
*2.
*3.
Unit Price of PV Surcharge
24 yen （20 yen*3）
Residential electricity ［LowLow-voltage］ voltage］
*1.
■ Unit Price of PV Surcharge The unit price of photovoltaic generation surcharge (PV surcharge) applicable for the FY 2010 is 0.00 yen/kWh as a result of rounding off, therefore there is no charge for customers in the FY 2010.
NonNon-residential electricity ［HighHighvoltage］ voltage］
“The maximum electricity receivable” receivable” is either of the smaller of electricity generated through solar panel system or solar power inverter system. If the maximum electricity receivable is within the range between between 50kW or greater and less than 500kW, this unit price of purchase will be applicable only when the maximum electricity receivable does not exceed the electricity contract (contract on electricity electricity supply from us.) Unit price of purchase in the case where the customer has installed installed other inin-house power generation facilities (including secondary batteries) and, while there is be be no inflow of electricity from such facilities to our electricity system, inflow of electricity from solar power power generation facilities may increase because inin-house power generation facilities are also installed.
The Okinawa Electric Power Company, Inc.
FY 2010
0 .00yen/kWh .00yen/kWh
Incidentally, the actual purchasing cost for the FY 2009 which could not be collected due to rounding off will be carried forward to the time of unit price calculation for the FY 2011, and the customers will be practically charged the cost in and after FY 2011.
12
Improvement of Remote Island Income and Expenditure 〔〔1/2〕 1/2〕 Movements in Remote Island Revenue and Expenditure
Electricity Sales（FY2009） （Total : 7,478 million kWh）
（ billion yen）
25
Remote Islands
0
641 million kWh
Revenue Expenditure Ordinary Income
20
-1
8.6%
-2 -3
15
10
Main Island
-4
6,837 million kWh
-5
91.4%
-6
Residential,Commercial and Industrial Use Charges(FY2009) (Total : 150.6billion yen)
-7 5
-8 Remote Island Operations Division
Remote Islands
-9
Remote Island Company
0
13.9billion yen
-10 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
9.2%
2010
(Estimate) Damage worth 800 million yen due to TyphoonNo.14(Miyako) (FY: 2003)
Increased Fuel Costs ・Change of Oil Type(C Æ A heavy oil) ・High Cost of Crude Oil (FY2005(FY2005-)
Decreased Fuel Costs ・Change of Oil Type (AÆ (AÆ FCCFCC-C heavy oil)
Main Island （billion yen） yen）
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
136.7billion yen 90.8%
(Estimate)
Revenue
12.3
12.8
12.7
12.4
12.6
13.3
13.6
13.7
14.7
14.0
14.3
Expenditure
17.2
17.0
15.7
16.2
15.9
19.3
22.2
20.7
21.8
20.1
20.6
Ordinary Income
-5.0
-4.2
-3.0
-3.8
-3.3
-6.0
-8.6
-6.9
-7.0
-6.1
-6.3
The Okinawa Electric Power Company, Inc.
Remote island business occupies slightly less than oneone-tenth of electricity sales and residential, commercial and industrial use charges.
13
Improvement of Remote Island Income and Expenditure 〔〔2/2〕 2/2〕 The region has a high cost structure because of such reasons as having small islands scattered about a vast sea area and the narrow scale of the economy. In order to construct a system enabling fast implementation of measures measures to improve inequalities in income and expenditure, a Remote Island Operations Division was launched in FY2001 and from from FY2002, this was converted into the Remote Island Company. •
Establishing remote control system for power generation plants in in Miyako and Ishigaki. Ishigaki.
•
Revising the procedures for regular inspections on electric power power supply facilities.
•
Purchasing other companies’ companies’ idle facilities and moving idle facilities of own company.
•
Switching from A heavy oil to FCCFCC-C heavy oil.
Fuel costs are greatly increasing due to the recently soaring price price of crude oil. We work out new measures to stabilize supply and improve the balance balance of revenue and expenditure while pushing ahead with ongoing various measures z Reducing fuel consumption by introducing New energy (Retractable windwind-power generators, Remote island micro grid system etc.). z Effective utilization of waste oil. etc. (Billion Yen)
2.0
Personnel Cost
(Billion Yen)
Maintenance Cost
4.0
1.8
3.4
1.5 1.5
3.0
1.0
2.0
0.5
3.5
2009
The Okinawa Electric Power Company, Inc.
3.0
Depreciation Cost 2.6
(Billion
Fuel Cost
Yen)
2.4 8.3
2.0 5.0
1.0
0.0
2001
Yen)
10.0
1.0
0.0
(Billion
0.0 2001
2009
4.7
0.0
2001
2009
2001
2009
14
Addressing the global warming issues ■ Finding sites for hydro or nuclear power is difficult in Okinawa Prefecture due to reasons including the region’ region’s geological and geographic characteristics and constraints on the scale of demand Æ Dependency on fossil fuels (oil, coal, etc.)
■ Introduction of LNG thermal power, which creates low CO2 emissions (Yoshinoura Thermal Power Station) ■ Promotion of the introduction of “new energy” energy” based on the RPS system ■ Efficient operation of thermal power plants ■ Promotion of multimulti-fuel operation with biomass energy ■ Equity participation in carbon funds taking advantage of the Kyoto Kyoto Mechanism (as of March 31, 2010 2010))
Company Efforts
Name of Funds
Equity participation in carbon funds
Contract of amount of investment Contract of credit volume
Acquired credit volume or amount of investment (contract basis) 6 million dollars
Approx.4.1 million tons-CO2
Purchase Contract with a trading company etc. ■Investment for CCS survey research ■Promoting introduction of electric vehicles for businessbusiness-use (introducing 100 electric vehicles by FY2020) ■Promoting energy saving on the demand side (by offering EcoCute services, etc.) （cf.） cf.）Actual result of CO2 emission coefficient for 2008: 0.946kg - CO2 /kWh （The figure after adjustment is the same） same） Actual result of CO2 emission coefficient for 2009: 0.931kg - CO2 /kWh （The figure after adjustment is the same） same） The Okinawa Electric Power Company, Inc.
15
Q&A
The Okinawa Electric Power Company, Inc.
Q&A - Contents Q1． Q1． What is the Current State of the Okinawa Prefectural Economy and What is the Future Forecast? 1) Okinawa’ Okinawa’s Economy 2) Annual Average Growth Rates for GDP and Per Capita Prefectural (National) Income 3) Population and Household Growth in Excess of Nationwide Growth Growth 4) Okinawa Prefecture Demographics 5) Trends in the Number of Incoming Tourists and Guest Rooms at Accommodation Facilities 6) Trends in U.S. Base Related Income
・・・・ 16 ・・・・ 17 ・・・・ 18 ・・・・ 19 ・・・・ 20
Q2.
Reference: Main Economic Indicators What is the Current State of U.S Military Bases?
・・・・ 21 ・・・・ 22 ・・・・ 23
Q3.
What are the Effects of Liberalization of Electric Power and What What is the Future Forecast for Liberalization?
・・・・ 24
Q4． Q4． What are the Special Tax Measures ? Q5． Q5． What is the Current State of the Promotion of AllAll-Electric Houses ? Q6． Q6． What is the Current State of the New Demand Creation Through the Promotion of Commercial Electrification Equipment ? Q7． Q7． What is the Past Trend for Ordinary Income and What is the Forecast Forecast for this Fiscal Year? Q8． Q8． What are the trends of the Capital Expenditure and Free Cash Flows? Flows? Q9． Q9． What is the Status of Wind and Solar Power Electricity Generation Generation Facilities? Q10． Q10． What is a retractable windwind-power generator? Q11． Q11． What is the New Energy verification studies for the Remote Island Island Independent System? Q12． Q12． How do Current Electricity Rates Compare to Rates at Other Companies? Companies? Q13． Q13． What are the CO2 Emission Volumes by Fuel Type? Q14． Q14． What is the Current State of the Progress of Discussion in the Gas Gas Industry? Q15． Q15． What is the PCB Waste Treatment ? ○ Change in Okinawa Electric Power Company’ Company’s Stock Price ○ Earnings Per Share and Payout Ratio ○ Reference The Okinawa Electric Power Company, Inc.
・・・・ 25 ・・・・ 26 ・・・・ 27 ・・・・ 28 ・・・・ 29 ・・・・ 30 ・・・・ 31 ・・・・ 32 ・・・・ 33 ・・・・ 34 ・・・・ 35 ・・・・ 36 ・・・・ 37 ・・・・ 38 ・・・・ 39
Q1.What is the Current State of the Okinawa Prefectural Economy and What is the Future Forecast?
1
Okinawa’s Economy
◎The current state of affairs The prefecture economy is showing a recovery in some areas from the recovery of tourism demand and the underpinning of consumer spending as a result of fiscal stimulus. • Although consumer spending remains under severe conditions as consumers continue to be defensive about their lifestyles, it shows a recovery in some areas as a result of fiscal stimulus. • Construction demand is lower than in the previous year in both public works and in housing starts. • Tourism demand is higher than in the previous year, which had a negative impact from recession and the H1N1 flu, from hosting the interscholastic athletic meet and an increase of tourists from abroad.
◎Prospects The economy is expected to maintain its move toward recovery, albeit slowly, mainly in tourism demand, from a ripple effect of economic recovery in mainland Japan. On the other hand, there is a concern about a slowing growth in both Japanese and global economies, and we need to keep watching its impact. The Okinawa Electric Power Company, Inc.
Trends in Main Economic Indicators (Rates of Growth) （%） FY200 9 FY2009 Indicators
Sales by largelarge-scale retailers No. of new car sold Wholesale shipments of household appliance New residential construction starts Value of public works contracts No. of Inbound tourists Total unemployment rate Value of corporate failures Note 1:
Note 2: Note 3: Source:
First Half
Second Half
FY20 10 FY2010 Total
First Half
-2.4
-4.2
-3.3
-1.4
-11.9
19.0
1.8
26.9
7.4
29.1
17.7
17.3
-1.7
-25.2
-14.6
-6.2
8.3
-12.4
-2.8
-16.2
-4.0
-4.2
-4.1
5.1
7.6
7.4
7.5
7.5
-83.2
-44.6
-77.3
-36.9
The figures for ‘Sales by largelarge-scale retailers’ retailers’ are calculated from the values given in preliminary figures for August 2010 on an all allstore base. The figures quoted here for ‘Wholesale shipments of household appliance’ appliance’ are estimates. The figures for ‘Total unemployment rates’ rates’ are raw data. Okinawa General Bureau, Okinawa Prefecture, Okigin Economic Institute, and others.
16
Q1.What is the Current State of the Okinawa Prefectural Economy and What is the Future Forecast?
2
Annual Average Growth Rates for GDP and Per Capita Prefectural (National) Income
■ Due to measures based on the Okinawa Promotion and Development Plan, Plan, GDP growth in Okinawa prefecture is expected to exceed the national average. The forecast is for an annual average growth rate of 3.7% in Okinawa prefecture up to 2011, higher than the national annual average of of -0.8%. ■ Furthermore, per capita income is also expected to increase, supported supported by the growth of prefectural GDP. Growth of about 7.5% is anticipated, in contrast to the national figure of 3.8%.
Annual Average Growth Rate of Per Capita Prefectural (National) Income
Annual Average Growth Rate of GDP
FY2007
FY2011
Annual Average Growth Rate FY2007FY2007-Y2011
Prefectural GDP
3,916.3 billion yen
4,531.1 billion yen
Approx. 3.7%
National GDP
562,350.4 billion yen
545,054.7 billion yen
Approx.Approx.-0.8%
Sources: “Economic and Social Perspectives in Figures” Figures”, in the Okinawa Promotion and Development Plan FY2007 Prefectural Economic Accounts Cabinet Office, Japan Electric Power Survey Committee
The Okinawa Electric Power Company, Inc.
FY2007
FY2011
Annual Average Growth Rate FY2007FY2007-Y2011
Prefectural Income
2.05 million yen
2.74 million yen
Approx. 7.5%
National Income
2.93 million yen
3.40 million yen
Approx. 3.8%
"Sources: “Economic and Social Perspectives in Figures” Figures”, in the Okinawa Promotion and Development Plan, FY2007 Prefectural Economic Accounts
17
Q1.What is the Current State of the Okinawa Prefectural Economy and What is the Future Forecast?
3
Population and Household Growth in Excess of Nationwide Growth
■ While nationwide (excluding Okinawa) is expected to decrease by 0.34% annually on average from FY 2009 to FY 2019, the population in Okinawa is expected to increase by 0.24%. ■ Whereas the population reached a peak in 2004 on a nationwide basis basis and has entered a downswing since then, Okinawa is expected to reach its population peak between 2025 and and 2030. Growth of Population and Households in Okinawa Population (thousand People）
Population Households
1,500 1,450
Households
633
643
655
1,400 1,353
1,362
1,368
666
1,373
674
1,376
683
(0.70%) （ Thousand） 732 750
Growth of Population and Households Nationally (Excluding Okinawa) Population （ Thousand people）
129,000
700 (0.24%) 650 1,420 600
128,000
550
126,000
1,386
500
1,350
Population Households
127,000
59,288
59,919
60,580
61,225
61,740
62,002
(0.21%) 63,292
126,434 126,406 126,402 126,398 126,316
55,000
126,124
50,000 125,000 45,000
400
124,000
350
123,000
40,000 (-0.34%) 121,920
300
1,250
250 1,200 2004
2005
2006
2007
2008
2009
Source: National Census, Ministry of Internal Affairs and Communications, Japan Electric Power Survey Committee Note: For 2019 2019, the rate in parentheses is the average annual growth rate for FY 20092009-2019
200 2019 （FY）
65,000 60,000
450
1,300
Households （ Thousand）
122,000 121,000 2004
2005
2006
2007
2008
2009
35,000
30,000 2019 （FY）
Source: National Census, Ministry of Internal Affairs and Communications, Japan Electric Power Survey Committee Note: For 2019 2019, the rate in parentheses is the average annual growth rate for FY 20092009-2019
Thanks to the stability growth of household numbers in association association with the increasing population, residential demand increases are expected. The Okinawa Electric Power Company, Inc.
18
Q1.What is the Current State of the Okinawa Prefectural Economy and What is the Future Forecast?
4
Okinawa Prefecture Demographics
■ Demographics of Okinawa Prefecture are in outflow of 0.5 person per 1,000 people in terms of social increase in population, but natural increase in population remains steady and and is at the top nationwide with 5.0 persons per 1,000 people. ■ Consequently, growth of population in the prefecture significantly significantly exceeds the national average of -1.4 person, with 4.5 persons per 1,000 people. Trend in the Social Increase of population (Per Thousand people) （People） 3.0 (3rd) 2.0
Nationwide Okinawa
1.7
（People） (1st) 7.0 6.0
5.4
(1st) 5.2
(1st) 5.4
(1st) 5.3
Nationwide Okinawa 5.0(1st)
5.0
1.0 0.0
0.0
4.0
0.0 -1.0
Trend in the Natural Increase of population (Per Thousand people)
-0.2 (11th)
-0.4
-2.0
-0.3
-0.5(9th) -1.0
-1.9 (22th)
-3.0 2005
2006
2007
2.0 1.0
2008
0.1
0.0
0.0
-3.3(30th)
-4.0
3.0
-0.0
-1.0 2009
(FY)
2005
2006
2007
-0.3 2008
-0.5 2009
Trend in the Increase of population (Per Thousand people) （People） 8.0 (3rd) 7.0 6.1 6.0 5.0 4.0 3.0 2.0 1.0 0.0 -1.0 -0.1
Nationwide Okinawa (4th) 5.0
0.0
(1st) (6th) 3.5
2005
(7th) 2.1
0.0 -0.6
-2.0 (FY)
4.5
2006
2007
2008
-1.4 2009
(FY)
Source: Bureau of Statistics, Ministry of Internal Affairs and Communications, “Yearly Population Estimates” Estimates”
Source: Bureau of Statistics, Ministry of Internal Affairs and Communications, “Yearly Population Estimates” Estimates”
Source: Bureau of Statistics, Ministry of Internal Affairs and Communications, “Yearly Population Estimates” Estimates”
Note: Social increase of population = Incoming population – Outgoing population
Note: Natural increase of population = Births – Deaths
Note: Population increase = natural increase in population + increase/decrease of population in the society
The figures in brackets in the chart show Okinawa Prefecture's national ranking.
The Okinawa Electric Power Company, Inc.
The figures in brackets in the chart show Okinawa Prefecture's national ranking.
The figures in brackets in the chart show Okinawa Prefecture's national ranking.
19
Q1.What is the Current State of the Okinawa Prefectural Economy and What is the Future Forecast?
5
Trends in the Number of Incoming Tourists and Guest Rooms at Accommodation Facilities
FY2009 Result for incoming tourists: 5.69 million people( people(-4.1% in the previous year’ year’s figure) ※The target figures for 2010 are 6 million incoming tourists （ 10 Thousands of People）
Trends in the Number of Incoming Tourists and Guest Rooms at Accomodation Facilities
Target （Rooms） 45,000
850 Incoming Tourists Guest Rooms at Accommodation Facilities
800 750 700
31,238
600
25,423
23,781
23,297
550 490
500 450
①FY2010
33,654 32,320
27,533 28,303
650
463
450
557 513
571
589
35,005
40,000
36,359
35,000 600
593 569
517
447
30,000 25,000 20,000 15,000
10,000 （FY） 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Sources: “Summary of Okinawa Promotion measure” measure”, “Tourism Directory” Directory”, ”Visit Okinawa Plan” Plan” •The survey of guest rooms at accommodation facilities changed from a biennial to an annual basis from 2003.
Visit Okinawa Plan ・Incoming Tourists 6.00million (Including Tourists from foreign countries 0.3million) ・Tourist Income 438.0billion Yen
422
400 350
【Reference】 Reference】
②FY2009 Results ・Incoming Tourists 5.69million (Including Tourists from foreign countries 0.25million) ・-4.1% growth rate (YoY (YoY)) Because of holding back on traveling due to economic slump and H1N1 flu, the number fell below the previous year.
With the number of tourism related facilities (hotels, etc.) increasing increasing in association with increased numbers of incoming tourists, increases are forecast for demand for commercial commercial use electricity. The Okinawa Electric Power Company, Inc.
20
Q1.What is the Current State of the Okinawa Prefectural Economy and What is the Future Forecast?
6 (Billion Yen) 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0
Trend in U.S. Base Related Income （%）
Trend in U.S.Base Related Income
16.0 12.0 Base Related Income 8.0
Prefectural Aggregate Income
4.0
Level of Dependence on Bases
0.0 1972
1977
1982
1987
1992
1972 Base Related Income （Charges for Land Occupied by US Armed Forces）（ A） Forces）（A
Prefectural Aggregate Income（ Income（B） Level of Dependence on Bases（ Bases（A/B） A/B）
77.7
1997
1977 100.6
2003
2004
1982 134.6
2005
1987 128.2
2006
1992 156.3
2007
1997 184.0
2003 211.3
2004 211.1
（Unit: billion yen、 yen、%） 2005 2006 2007 201.0
215.3
208.8
501.3 1,163.1 1,822.6 2,516.5 3,192.9 3,582.1 3,826.7 3,798.9 3,869.1 3,908.3 3,937.9 15.5 8.6 7.4 5.1 4.9 5.1 5.5 5.6 5.2 5.5 5.3
■ U.S. Base related income has become an income source that supports the Okinawa economy. ■ However, the level of dependence on the bases has been falling year on year as the prefectural economy expands, and it had fallen to 5.3% in FY2007 from the 15.5% share at the time Okinawa was returned to Japan (1972). The Okinawa Electric Power Company, Inc.
Source: Okinawa Prefectural Government, Governor’s Office, US Base Countermeasure’s Office, “Okinawa Bases of the US Armed Forces and Self Defence Forces (Statistics), March 2010”
21
Reference : Main Economic Indicators Trends in Main Economic Indicators (Year-on-Year Comparison)
(Unit : %)
FY2009
FY2010 First Half
Indicators
Apr. Sales by largescale retailers No.of new car sold Wholesale shipments of household appliance
-2.5
Total unemployment rate Value of corporate failures
Aug. Sep.
Oct.
Nov. Dec. Jan.
Feb. Mar.
Apr.
May Jun.
Jul.
Aug. Sep.
-4.3
-5.9
1.1
-5.2
-8.8
-2.5
-4.9
-1.7
-2.2
-1.0
-2.0
-2.0
-1.9
0.0
－
-15.4 -26.4 -23.2
-12.1
5.7
4.3
6.8
11.7
12.5
20.1
29.4
30.2
42.8
31.7
39.6
20.4
31.9
4.1
12.8
15.2
-2.2
23.7
18.0
19.0
44.4
42.7
14.4
19.9
15.0
15.2
27.0
13.4
-0.8
11.9 -45.6 -32.2
4.5
-8.7
25.5 -10.8
-9.2
-6.1
-1.5
Jul.
-3.5
New residential -31.8 construction Value of public works -22.8 contracts No.of Inbound tourists
May Jun.
5.8
3.0
6.3
-0.3
16.9
-8.6
75.7 -17.4 -16.0 -34.3 -35.7
77.5 -12.9
27.6
-0.5
-7.4
-7.4
-2.7
0.5
-4.0
7.6
8.6
7.5
6.6
7.5
90.8
44.6
19.4
5.7
6.2
16.8
-3.7 -12.3 -12.2
7.7
-98.9 -58.0 -74.9
7.1
7.5
13.0 -39.3 -37.7 -25.2
-6.3 -68.4
39.3 -33.0
-6.1 -10.7
-7.3
-0.5
8.1
1.4
5.2
9.9
0.2
2.9
5.6
6.9
6.8
7.1
8.1
8.0
8.0
7.9
6.7
6.5
7.8
8.0
49.6 495.6 -26.8 -94.3 125.5
-7.1 -77.4 -95.2 -73.9
-4.4 -97.8 562.5
Note 1: The figures for ‘Sales by largelarge-scale retailers’ retailers’ are calculated from the values given in preliminary figures for August 2010 on an allall-store base. Note 2: The figures for ‘Total unemployment rates’ rates’ are raw data. Source: Okinawa General Bureau, Okinawa Prefecture, Okigin Economic Institute, and others.
The Okinawa Electric Power Company, Inc.
22
Q2. What is the Current State of U.S. Military Bases ? 【Proportion of Demand Taken Up By U.S. Armed Forces 】
U.S. Armed Forces demand was about 9.4% of total demand and about about 7.1% of revenue in fiscal 2009.
The proposal for reorganization of the U.S. Armed Forces was agreed agreed upon by the U.S.U.S.-Japan Security Consultative Committee on May 1, 2006, and the facilities to be returned were clarified.
The schedule for return of US military bases, which should have been developed by March 2007, has not been formulated yet and the detailed detailed plan remains uncertain.
Although Japan and the U.S. reached an agreement with the Henoko plan as a result of reviewing several plans for a new location of the U.S. Futenma Airbase after the change of government in September 2009, the Okinawa Okinawa Prefecture and Nago City have not agreed with the plan, making its future outlook uncertain.
Although there will be a temporary decrease in demand if facilities facilities are returned, activation of the regional economy is forecasted in line with the the redevelopment of returned sites.
From now on, the company shall analyze the effects of returns on operations while paying attention to state and prefectural activity with regard regard to the proposal for reorganization of the U.S. Armed Forces.
（FY 2009 result） result）
Total Demand 7,478million kWh
Planned return of facilities
1.4～ 1.4～3.4%※ 3.4%※
Total Demand of US Armed Forces（ Forces（9.4%） 9.4%）
※Range in figures due to planned return of facilities includes partial partial return.
【Summary of U.S. Armed Forces in Okinawa】 Okinawa】
No. of Facilities
Personnel*
Area Soldiers Other Staff, Families Total
(As of Mar. 2010)
33 229 k㎡ k㎡ 24,612 20,283 44,895
* The figures for personnel are as of the end of September 2009. Reference: No. of army employees: 9,155 *As of the end of November November 2009 * Source: Website of Japan Ministry of Defense ; “Bases of the U.S. Armed Forces and Japan’ Japan’s SelfSelf-Defense Forces in Okinawa (collection of statistics and materials) materials) March 2010,” 2010,” issued by the Military Base Affairs Office, Executive Office of the Governor, Governor, Department of General Affairs, Okinawa Prefectural Government; and the guide on recruitment of employees at U.S. Forces in Japan, prepared by the Labor Management Organization for USFJ Employees Employees
The Okinawa Electric Power Company, Inc.
[U.S.[U.S.-Japan roadmap drafted for realignment of U.S. forces] (Source: Website of Japan Ministry of Defense ) • Realignment of U.S. forces in Okinawa (main contents) (a) Construction of supplement facility of Futenma Airbase: Futenma Replacement Facility (FRF) Æ Relocation to Camp Schwab scheduled to complete in 2014. (b) Reduction of military forces and relocation to Guam Æ Relocation of 8,000 Marine Corps and their family (9,000 persons) persons) to Guam by 2014. (c) Return of land Æ Total or partial return of land of six bases south of Kadena airport. airport. * Said return of land will take place after completion of personnel personnel relocation, after 2014. [Others] In addition to the plan mentioned above, there is a plan plan to deploy a PACPAC-3 unit, which calls for relocation of 600 staffers and their 900 family members from Texas, the U.S., to Okinawa. Operation of PACPAC-3 will partially start by the end of 2006.
23
Q3. What are the Effects of Liberalization of Electric Power and What is the Future Forecast for Liberalization? Retail Market
Compared to other electricity companies, this will be a more cautious cautious step in the liberalization process
Special High Voltage Demand Over 20,000kW Over 60,000V
Over 2,000kW
High Voltage Demand Over 500kW
Over 50kW
Medium size and Small size Factories, LargeLarge-Scale Factory, Department Stores, Hotels, etc
OEPC Other Companies
The Scope of Liberalization 16%
March 20002000-
April 20042004-
Low Voltage Demand and Electric Lighting Under 50kW
Small size Factories , Stores , Houses etc
Buildings, Supermarkets, etc.
The plan to expand the range to just under the extraextra-high voltage range was postponed in the ongoing electric industry reform project in 2007.
To be reviewed again within a fivefive-year target period after the finalization the of basic report (March 2008).
The Scope of Liberalization 62%
March 2000 –
April 2004 –
April 2005 –
Full liberalization was postponed in the ongoing electric industry reform project in 2007.
* Ratio to electric power sales (FY2009 results)
The Okinawa Electric Power Company, Inc.
24
Q4. What are the Special Tax Measures? Need for Special treatment Currently Applied Special Tax Measures 1. Alleviation of Fixed Property Tax Basic Law:
Supplementary Provisions of the Local Tax Law (Article 15.14)
Details:
Alleviation to 2/3 of the Standard Tax Rate
Period:
April 1, 1982 – March 31, 2012
■ Special treatment is necessary for industrial development and improving the living standards of people in Okinawa Prefecture given that there has been no changes to the conditions of remote islands such as bearing of deficit arising from structural disadvantage.
(Extended for 5 years from April 1, 2007)
Value of Tax Alleviation Due to 2. Exemption from the Oil and Coal Tax Basic Law:
Special Measures Law for the Promotion of Okinawa (Article 65.2), Special Taxation Measures Law (Article 90.4.3.1)
Details:
Exemption from the Oil and Coal Tax for coal
Period:
October 1, 2003 –March 31, 2012
the Special Measures ■ The value of the alleviation measures in FY2009 was about 2.1 billion yen. ■ The average value of the alleviation measures after FY2010 will be about 2.3 billion yen per year.
(Extended for 5 years from April 1, 2007)
※ Alleviation of Business Tax was abolished on May 15,2007 Details
: Standard Tax Rate: 1.1% (Standard Tax Rate for Electric Utilities: 1.3%)
Period
Amount of reduction by applying special treatment is deducted in calculating the Total Unit Cost of electricity charge and consequently is returned to customers.
: December 31, 1971 – May 14, 2007
The Okinawa Electric Power Company, Inc.
25
Q5. What is the Current State of the Promotion of All -Electric Houses? All-Electric 1. Sales target for FY2010 ⇒ All-Electric Houses 4,100 (14.2million kWh) 2. Approach for the promotion and diffusion. ① Launching of effective promotion activities to facilitate penetration penetration of all electrification housing brand. ② Proactive activities to promote penetration of ecocute (CO2 refrigerant heat pump water heater) heater). ③ Expansion of sales activity in cooperation with subsub-users. ④ Strengthening of sales activity to collective housing and existing existing homes.
［％］
［Houses］ 35,000
No. of All-Electric Houses
30,000
(FY2010Target ： 24,712)
2.5
20,000
3.2
3.0
Diffusion Rate of All-Electric
25,000
1.6
10,000
10,589
Adoption rate （results for FY2009） FY2009）
AllAll-electric adoption rate in newly built houses = 12.6% multi-family dwellings etc.) 2.5 (included multiAllAll-electric adoption rate in newly built houses = 56.3%
1.5
1.3
8,120
【Reference】 Reference】
3
2
2.0
15,000
5,000
3.5
(FY2010Target： 3.5)
13,652
17,123
20,612
22,429
1 0.5 (FY) 0
0 2005
2006
2007
2008
The Okinawa Electric Power Company, Inc.
2009
2010.9
26
Q6.What is the Current State of the New Demand Creation Through the Promotion of Commercial Electrification Equip ment ? Equipment 1. Sales target (in total of three years from FY2010 to FY2012): 30 million kWh * Electrification system (electric airair-conditioning system including heat storage, electrified kitchen and electrified water heater)
2. Approach for the promotion and diffusion. ① Implementation of electrification proposal activities suitable for the power usage of customers. ② Promotion of heat pump equipment (air(air-conditioning and water heaters) ③ Expansion of sales activity in cooperation with subsub-users. ④ Launching sales activities that customers in various industries. industries.
¾ Sales target (in total of three years from FY2010 to FY2012): 30 million kWh The demand for commercial electrification equipment (10Thousands of kWh)
FY
2006
2007
2008
2009
2010.9
2010～2012 Target
Commercial Electrification Equipment
417
433
876
626
461
3,000
The Okinawa Electric Power Company, Inc.
27
Q7.What is the Past Trend of Ordinary Income and What is the Forecast for this Fiscal Year? Trend in Ordinary Income (Non-Consolidated)
（billion yen） yen）
（%）
7.0
16.0 Ordinary Income
6.0 14.0
5.5
5.2 4.5
4.5
Rate Revision -0.45% (FY 2008)
4.6 10.0
10.0
Rate Revision -3.72% (FY 1997)
8.3 8.0
4.0
14.0
11.5
12.0
6.0
ROA (Operating Income/Total Assets) 6.0 5.6
Rate Revision -5.96% (FY 1995)
5.9
3.4
2.8
4.0
4.2 3.7
8.6
5.1
3.9
3.9 3.7
5.7 4.8
4.0 7.0
3.5
3.0 2.7
Rate Revision -3.78% (FY 2000)
2.0
5.0
8.8
6.6
2.7
11.3 4.3
9.7
4.5 7.7
7.3
10.0
6.0
Rate Revision -5.79% (FY 2002)
Rate Revision -3.27% (FY 2005)
Rate Revision -3.24% (FY 2006)
2.0 1.0
0.0
0.0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (Forecast) Gushikawa Thermal Power Station Start of operations Generator No.1: FY 1993 Generator No. 2: FY 1994
Effects due to cost processing at the time of accounting standard changes in association with the introduction of retirement benefit accounting. (FY 2000)
The Okinawa Electric Power Company, Inc.
Kin Thermal Power Station Start of operations Generator No. 1: FY 2001 Generator No. 2: FY 2003
Reduction in retirement benefit costs due to revision of the retirement benefit system. (FY 2005)
28
Q8.What are the trends of the Capital Expenditure and Free Cash Flows? （billion yen)
80 70.9 70 60 50
Purchases of Capital Assets
65.3 52.0 47.9
34.5 28.7
28.2
30
10
46.9 36.6
40
20
Free Cash Flows
58.8
23.9
28.9
26.3
24.1 19.3
Gushikawa Thermal Power Station Start of operations Generator No.1: FY 1993 Generator No. 2: FY 1994
15.6
15.8
17.5
20.1
0 -10 -20 -30
Kin Thermal Power Station Start of operations Generator No. 1: FY 2001 Generator No. 2: FY 2003
-40 -50
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 （FY）
The Okinawa Electric Power Company, Inc.
29
Q9.What is the Status of Wind and Solar Power Electricity Generation Facilities? List of OEPC Group’s New Energy Facilities No. of Facilities （No. of Power Plants） Plants） Wind Power
OEPC Okinawa New Energy Development Co
Solar Power
OEPC Okinawa New Energy Development Co
Total
Electricity Output （kW） kW）
6 (8)
3,120
7 (12)
14,325
10
1,182
1
10
24
18,637
Iejima wind Power (2Power Plants) ：1,200kW Solar Power ：10kW
Urasoe Branch Solar Power:10kW Head Office Solar Power:2kW Naha Branch Solar Power:12kW
Iheya Wind Power (1Power Plant) :300kW
Sosu Wind Power (2Power Plants) :3,600kW
Aguni Wind Power (1Power Plant) :250kW
Nakijin Wind Power (1Power Plant) : 1,995kW Shin Karimata Wind Power (2Power Plants) :1,800kW Miyako Wind Power: (1Power Plant) : 600kW
Tokashiki Solar Power: 108kW
Gushikawa Wind Power (1Power Plant) : 1,950kW Sashiki Wind Power (2Power Plants) :1,980kW Kitadaito Solar Power :140kW (including Micro grid 100kW)
Sadefune Wind Power (2Power Plants) : 1,800kW Yonaguni Wind Power (2Power Plants) :1,200kW Yonaguni Solar Power (Micro grid) :150kW Hateruma retractable Wind Power (2Power Plants) :490kW
Miyako Solar Power: 490kW Miyako Branch Solar Power: 10kW Tarama Wind Power(1Power Plant): 280kW Tarama Solar Power (Micro grid) :250kW Yaeyama Branch Solar Power: 10kW
(As of September 30, 2010)
OEPC Group has new energy facilities with total output of 18,637kW 18,637kW （wind power: 17,445kW, solar power: 1,192kW） 1,192kW） Introducing Plan of New Energy Facilities. 9 Retractable windwind-power generator (Minamidaito (Minamidaito Island:2 plants: 245kW each, from January 2011). 9 New Energy verification studies for the Remote Island Independent Independent System (total 4,000kW solar power in Miyako island).
The Okinawa Electric Power Company, Inc.
30
Q10.What is a retractable wind -power generator? wind-power Overview of retractable wind-power generator Place
Hateruma Island
Manufacturer/country of manufacture
Vergnet/France Vergnet/France
Rated power output
245kW
Wind speed for power rating/startrating/start-up/stoppage
13m/s, 4m/s, 20m/s
Number of blade
Two
Diameter of blade
32m
Height of hub
38m
Advantages ¾ Wind-power generator can be folded nearly 90 degrees so that damages by big wind in typhoon can be avoided by folding it. ¾ Large-size cranes are not needed to construct the wind-power generator to enable construction in hilly areas. ¾ Wind-power generator is retractable, making it possible to perform maintenance on the ground. ¾ Wind-power generator is supported by wires.
※Also, we are planning to introduce retractable windwind-power generator at Minamidaito. Minamidaito.
The Okinawa Electric Power Company, Inc.
31
Q11.What is the New Energy verification studies for the Remote Island Independent System? Introduction ratio
Miyako Island Ikema Island Existing wind-power generation facilities 600kW X 1 900kW X 2
Ogami Island Control system
Maximum demand for electricity
50,000kW
NewlyNewly-established solar power generation facilities
4,000kW
Storage battery
4,000kW
Existing internalinternalcombustion power
Irabu 伊 良部Island 島
Existing wind-power generation facilities 900kW X 2
Shimoji 下地島Island
Existing new energy facilities Installation area Facilities utilization rate
Kuruma Island
8%
Maximum demand for electricity
Storage battery: 250kW Existing wind-power generation facilities: 280kW
WindWind-power generation 4,200kW
About 12%
Storage battery
3.0MWX 1
・NAS battery:4.0MW ・lithiumlithium-ion rechargeable battery:200kWh
(1) Purpose The purpose of performing introduction demonstration for the independent independent power generation system of Remote Islands with different scale of system system is as follows: ■ Grasping the impact of largelarge-scale introduction of solar power generation to the actual system ■ Calculation of allowable amount of solar power generation introduction introduction ■ Obtaining knowledge on stabilization technology concerning the system (2) Plan ■ Grasping the impact of solar power generation on four remote islands islands with different scale of system ■ Analyzing operation data on solar power generation and secondary secondary battery ■ Verifying the method of system stabilization for remote island independent system
Storage battery
250kW
Installation area Facilities utilization rate
28,771m2
Introduction ratio
Yonaguni Island
Maximum demand for electricity
Solar power generation facilities:150kW
Storage battery: 150kW
Existing wind-power generation facilities: 600kW×2
Solar power generation facilities: 100kW
Storage battery: 100kW
2,063m2 About 12% 7% 2,160kW
Storage battery
150kW
Existing internalinternalcombustion power
2,910kW
Existing new energy facilities
1,200kW
Installation area
1,251m2 About 12% 12%※ 12%※1
Maximum demand for electricity
860kW
NewlyNewly-established solar power generation facilities
100kW
Storage battery
100kW
Existing internalinternalcombustion power
1,540kW
Existing new energy facilities
４0kW
Installation area
839m2
Facilities utilization rate
The Okinawa Electric Power Company, Inc.
280kW
150kW
Introduction ratio
Existing solar power generation facilities: 40kW
1,590kW
NewlyNewly-established solar power generation facilities
Facilities utilization rate
Kitadaito Island
1,160kW
250kW
Existing new energy facilities
Solar power generation facilities:250kW
22%
NewlyNewly-established solar power generation facilities
Existing internalinternalcombustion power
76,500kW
Solar power generation
150kW X 4 4kW X 100
Introduction ratio
Tarama Island
※1: Including existing solar power generation facilities(40kW) : 16%
About 12%
32
Q12.How do Current Electricity Rates Compare to Rates at Other Companies? While the detailed comparison of electricity rates is not available due to limited amount of reported data, the following is the comparison of electricity rates for the main supply contracts. Model Unit Rates for All Companies （As of November 2010, including fuel cost adjustments and consumption consumption taxes ）
Metered Residential
（ Unit: yen/kWh） yen/kWh）
OEPC
Co. A
Co. B
Co. C
Co. D
Co. E
Co. F
Co. G
Co. H
Co. I
24.50
23.90
22.59
21.82
21.86
21.16
21.48
22.69
22.07
20.94
⑩
⑨
⑦
④
⑤
②
③
⑧
⑥
①
19.99
17.42
17.47
17.03
16.83
15.50
16.55
17.67
16.41
16.29
⑩
⑦
⑧
⑥
⑤
①
④
⑨
③
②
17.78
16.33
15.92
15.46
16.33
14.83
15.75
16.53
16.52
15.82
⑩
⑥
⑤
②
⑥
①
③
⑨
⑧
④
Model Basic Unit 300
Commercial Use Electricity （High Voltage） Voltage） Model Basic Unit 250 （Power Factor 100%） 100%）
HighHigh-voltage Power A Model Basic Unit 250 （Power Factor 100%） 100%）
Note: The circled numbers indicate price level rankings (higher numbers numbers indicate more expensive rates).
The Okinawa Electric Power Company, Inc.
33
Q13. What are the CO22 Emission Volumes by Fuel Type? LNG (Liquefied Natural Gas) produces less carbon dioxide, a major cause of global warming, than coal or oil. Chart: Comparison of CO2 Emission Volumes by Fuel Type Fuel Type
CO2 Emission Volume Per Unit Heat Value [g-CO2/MJ] *1
vs.Coal
Coal
90.6
C Heavy Oil LNG
vs.Oil *3
CO2 Emission Volume Per kWh [kg-CO2/kWh] *2
vs.Coal
vs.Oil *3
1.00
1.27
0.84
1.00
1.24
71.5
0.79
1.00
0.68
0.81
1.00
49.5
0.55
0.69
0.35
0.42
0.51
*1 The values from the Law Concerning the Promotion of the Measures to Cope with Global Warming were used as the CO2 emission factors to calculate gg-CO2/MJ. *2 Thermal Efficiency at Generation End of 39%, 38% and 51% were assumed assumed for coal, oil and LNG respectively in calculations. *3 Oil comparisons were based on type C heavy oil. The Okinawa Electric Power Company, Inc.
34
Q14. What is the Current State of the Progress of Discussion in the Gas Industry ? As Ｔhe integrated energy company As LNG is expected to have potential needs as raw material for town gas and industrial fuel for its superior environmental and safety profiles, the Company is considering the supply business of LNG which will be introduced in the Yoshinoura Thermal Power Station.
Current status of the gas business in Okinawa (Conversion of heat consumed in FY2009) Public gas (Okinawa gas) LNG conversion: approximately 20,000t per year.
Current status The Company is proceeding with discussions with Okinawa Gas Co., Ltd., which is a public gas provider in Okinawa Prefecture, about LNG supply and business schemes including wholesale supply system while assessing the status of procurement of LNG fuel and the progress of construction works of Yoshinoura Thermal Power Plant.
For the promotion of LNG In addition to the wholesale supply of LNG to Okinawa Gas, the Company is examining the possibility of supplying it to heavy consumers for commercial and industrial uses in consideration of energy environment and market trends.
The Company aims to launch gas business from 2015 after the launch launch of operation at the Yoshinoura power plant， plant，in consideration of the LNG fuel supply situation and the stable operation at the Yoshinoura thermal plant.
11.1%
2.8%
LP gas
86.1% Source： Source：Agency for Natural Resources and Energy website, Japan LP Gas Association website, Gas Energy newspaper
【Reference: Corporate profile of Okinawa Gas】 Gas】 Date of foundation : July 22, 1958. Capital : JPY 250,222,000 Sales :
Perspective for the launch of business
community gas
JPY 6.3bn (December 2009)
Supply area : Most of Naha city, A part of Urasoe city, Tomishiro city, Haebaru town, Nishihara town, Nakagusuku village No. of customers: General gas: approx.52,000 units LP gas: approx.16,000units
The Okinawa Electric Power Company, Inc.
35
Q15. What is the PCB Waste Treatment ? PCB wastes must be treated by July 2016 in conformity with the "Special Measurement Law on Promotion of Appropriate Treatment of Polychlorinated Biphenyl Wastes."
■As for the highly-concentrated PCB wastes (transformers, capacitors, etc.), we concluded a commission contract with the Kitakyushu Facility of Japan Environmental Safety Corporation (JESCO) in May 2009, and began commissioned treatment in December 2009. The quantities possessed and treated of highly-concentrated PCB wastes (as of March 31, 2010) Quantity possessed
Equipment
Quantity treated
High voltage and low voltage capacitors
519 units
51 units
High voltage and low voltage transformers
9 units
－
Ballasts, etc.
102 units
－
Metal pollutants, sludge, etc.
Approximately 430 kg
－
●The storage condition of PCB wastes
■With respect to low-concentrated PCB wastes (contaminated oil, pole transformers, etc.), the government has conducted systemic revisions necessary for treatment measures of low-concentrated PCB wastes such as a partial revision of the Waste Disposal Law in an attempt to promote the treatment of low-concentrated PCB wastes. While carefully watching the government's action on the treatment measures, we will continue to review safe and low-cost treatment measures and complete the treatment of the wastes by the legal term. We already set aside provisions for PCB waste treatment except some PCB wastes. (FY2004 :highly-concentrated PCB , FY2010 :low-concentrated PCB )
■ PCB wastes are properly managed in accordance with laws and ordinances on the premises of the company. ■ In addition to storage management facility patrols conducted monthly by each storing department, we perform a patrol by a combination of relevant departments in the company on a regular basis (once a year) in an attempt to strengthen storage management. ■ With regard to the storage condition, we report to the Okinawa Prefectural Government on a regular basis (once a year) in conformity with the "Special Measurement Law on Promotion of Appropriate Treatment of Polychlorinated Biphenyl Wastes." The Okinawa Electric Power Company, Inc.
36
Change in Okinawa Electric Power ’s Stock Price Power’s Change in Stock Price (January 5, 2009～ 2009～September 30,2010) Okinawa Electric Power
Average of 9 Other Power Companies
Nikkei Average
¥6,520
¥2,567
¥9,043
AllAll-time high
¥6,520 as of January 5, 2009(± 2009(±0.0%)
¥2,567 as of January 5, 2009(± 2009(±0.0%)
¥11,339 as of April 5, 2010(+25.4%)
AllAll-time low
¥3,885 as of September 30, 2010(2010(-40.4%) 40.4%)
¥1,927 as of November 10, 2009(2009(-24.9%)
¥7,055 as of March 10, 2009(2009(-22.0%)
Stock price on January 5, 2009 2009
Latest stock price Closing quotation on September 30 , 2010 2010
400 350 300
¥3,885(3,885(-40.4%)
Changes in the Stock Price of the Company, the Nikkei Stock Average and Average Stock Price of Other Electric Power Companies * Each stock price indexed to the closing quotation at the time of listing of our company (March 1, 2002) as 100
OEPC
¥1,943(1,943(-24.3%)
¥9,369(+3.6%)
Changes in the Highest and Lowest Prices of the Stock of the Company
(￥)） （円 10,000
8,800
9,000 7,880
8,000 6,580
7,000
6,700
6,750
250 6,000
200
Nikkei Average 5,000
150
50
5,110
4,000
100
3,000
Average of 9 Other Power Companies
0 02/3 02/9 03/3 03/9 04/3 04/9 05/3 05/9 06/3 06/9 07/3 07/9 08/3 08/9 09/3 09/9 10/3 10/9
The Okinawa Electric Power Company, Inc.
5,360
6,200
4,850
4,660
4,380 2,770
3,080
3,870
3,460 2,925
2,000
2,250
2,370
2002
2003
1,000 2004
2005
2006
2007
2008
2009
2010（年 ）
37
Earnings Per Share and Payout Ratio Earnings per Share and Payout Ratio (Non-consolidated) FY Net Income
Million yen
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2,606
4,807
4,430
5,594
7,591
9,163
6,398
6,590
3,635
7,293
Earnings per Share
Yen
171.77
316.86
286.52
363.37
494.77
571.05
402.25
376.84
207.89
417.26
Dividend per Share
Yen
60
60
60
60
60
60
60
60
60
60
34.9
18.9
20.9
16.5
12.1
10.5
14.9
15.9
28.9
14.4
Payout Ratio
Date
% Issued number of shares of common stock
1992.02.10
14,728,132
Listed
1995.11.20
14,875,413
Split 1 : 1.01
1999.05.25
15,172,921
Split 1 : 1.02
2005.05.20
15,931,567
Split 1 : 1.05
2007.04.01
17,524,723
Split 1 : 1.10
The Okinawa Electric Power Company, Inc.
38
Reference
・ http://www.okiden.co.jp/english/index.html
(The Okinawa Electric Power Company Incorporated)
・ http://www.pref.okinawa.jp/english/index.html (Okinawa Prefecture) ・ http://www.fepc.or.jp/english/index.html (The Federation of Electric Power Companies of Japan) ・ http://criepi.denken.or.jp/en/
The Okinawa Electric Power Company, Inc.
(Central Research Institute of Electric Power Industry)
39
This h Thisdocument documentincludes includesstatements statementsconcerning concerningfuture futureresults. results.Suc Such statements ther statementsare arebased basedon oncalculations calculationsand andpredictions predictionsand andare arenei neither definite definitenor norguaranteed. guaranteed.Please Pleasebe beaware awarethat thatfuture futureresults resultsmay may change changeininaccordance accordancewith withchanges changesininassumptions assumptionsrelated relatedtotothe the management environment and the like. management environment and the like.
【【Enquiries Enquiries regarding 】 regardingthis thisdocument document】 Finance FinanceSection, Section,Accounting Accounting&&Finance FinanceDepartment Department Okinawa OkinawaElectric ElectricPower PowerCompany, Company,Inc. Inc. TEL -98-877-2341 FAX -98-879-1317 TEL：： +81 +81-98-877-2341 FAX：： +81 +81-98-879-1317 Email Email：：[email protected] [email protected]
The Okinawa Electric Power Company, Inc.
