economic activities of customers in the Kyushu region and
grow together with the regional community by delivering a
stable supply of low-priced, high-quality energy.
We formulated a Medium-Term Management Policy
(fiscal 2013–2015) in April 2013, and amid the severe
financial situation and supply–demand relations caused by
the suspension of operation of all our nuclear power sta-
tions, we have worked to achieve greater managerial ef-
ficiency, resume operation of nuclear power stations, take
measures to cope with such supply–demand relations and
gain greater public confidence.
On the other hand, looking at the external business
environment, we are going to enter a period of real com-
petition in the years to come as the full liberalization of
the retail market due to the electric power system reforms
scheduled for April 2016.
In this competitive environment, in order to achieve
our mission to "Make a brighter future for generations to
come" and continue to be trusted and chosen by custom-
ers as an energy supplier (See page 1 for details), we need
to accelerate our reforms on a groupwide basis. We there-
fore recently formulated the new Kyushu Electric Power
Group Medium-Term Management Policy, which covers
the five years from fiscal 2015 to fiscal 2019.
This policy consists of our "Vision for 2030" and the
three main strategies to attain the vision. It also shows
the priority measures we should take during the five-year
period from fiscal 2015 to fiscal 2019.
We aim to achieve sustained growth and provide all
stakeholders with enhanced value by pushing forward with
these initiatives on a groupwide basis.
We ask all stakeholders to give their continued support
and cooperation to our Group.
The Kyushu Electric Group’s Medium-Term Management Policy
The Kyushu Electric Group’s Medium-Term Management Policy Interview with the President
Message from the Chairperson and the President7/90Section 1
Kyushu Electric Power Summary
Section 2
Management Message
Section 3
Special Feature
Section 4
Management Base
Section 5
Financial Information
Kyushu Electric Power Company Annual Report 2015
Kyushu Electric Group Medium-term Management Policy
Vision for 2030
Aiming to become a corporate group that provides Japan’s best energy services
—Everyone eventually asks the Kyuden Group for energy!—
Three Pillars of strategy
Grow into a corporate group that provides energy services in Kyushu where we operate from a company that
delivers electricity and develops together with the regional community and society by meeting the diverse energy
needs of customers
Make the most of the Kyuden Group strengths to achieve sustained growth through energy service businesses
for overseas and outside Kyushu and renewable energy business
Enhance the organizational strength required to implement strategies to establish a robust business foundation
[Reference: Current generating power, etc.]
Overseas power generation (equity ownership in power output): 1.5 million kW
Renewable energy: 1.5 million kW
Direction of Future Strategy
Kyushuisthe
basisforall
businesses
Expanding
business
activitiestocoverAsiaandtheworld
Robust
business
foundation
Energy service business in Kyushu
Business development in a growing market
Overseas energy business
(Goal) 5 million kW
Outside Kyushu energy business
(Goal) 2 million kW
Renewable energy business
(Goal) 4 million kW
Electricity, gas, distributed, energy-saving, etc.
Active use of
strengths, input of
management
resources
Organizational abilities for
reform and growth and new
sources of profit
Future
business
Always
pursuit
Favorable growth
cycle
Overseas/outside
Kyushu
KyushuareaEnergy service business
Electricity business Gas business, etc.
Overseas & outside
Kyushu electricity business
(Including renewable energy business)
Overseas and outside Kyushu
energy services business*1
*1 In overseas and outside Kyushu markets, for the immediate future, we will focus on the electrical power
business where we can display our strength in high-level maintenance and operation technology but will
also enter the energy service business starting from services that we can provide.
*2 Relationships with energy service business and expected synergistic effects will be taken into consideration.
Image of Expansion of Business Areas
Actively use our strengths to
move into a growing area
Evolution
Corporate group
that provides
energy services
Company that delivers electricity
(Current) Gas
Fuel tradingESPSocial and lifestyle
services business*2
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Message from the Chairperson and the President8/90Section 1
Kyushu Electric Power Summary
Section 2
Management Message
Section 3
Special Feature
Section 4
Management Base
Section 5
Financial Information
Kyushu Electric Power Company Annual Report 2015
(1) Gaining more Kyuden fans through provision of diverse energy services
[One-stop energy services (for corporate clients)]
Energy-related sales operations will be integrated into Kyuden’s retail operations to offer all optimal combinations of energy services through a
single channel.
[Services closely tied to the lives of customers (for ordinary households)]
We will offer service menus that suit the lifestyles of customers to provide enjoyment and excitement.
We are considering making customers’ power consumption visible at our website’s "Energy-saving, Comfortable Life" page starting from April
2016. Data on power consumption will be obtainable every 30 minutes through smart meters, which have been installed since November 2009.
[Gas business]
In addition to the previous wholesaling of gas supplies, we will start retail sales gas in earnest as part of our energy services.
Outline of the Fiscal 2015 Management Plan
Meeting the diverse energy needs of customers in the Kyushu region
Strategy
PillarI[Gas Retail Business]
*2 Facilities for LNG storage, vaporization and delivery
LNG terminal
<Regions equipped with pipelines >
<Regions not equipped with pipelines>
Supply via outsourced gas pipeline operator*1
Satellite equipment*2
Trucks
Supply via LNG trucks
*1 We will consider the business systems needed in response to the
full liberalization of the gas retail business, slated for 2017.
Factories,
commercial facilities, etc.
Ordinary households
Factories,
commercial facilities, etc.
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Message from the Chairperson and the President9/90Section 1
Kyushu Electric Power Summary
Section 2
Management Message
Section 3
Special Feature
Section 4
Management Base
Section 5
Financial Information
Kyushu Electric Power Company Annual Report 2015
(2) Enhancing the competitiveness of power sources and fuel procurement abilities
We will secure stable and competitive power sources with
the imminent full liberalization of the retail market in mind.
We will develop System No. 3 x 4 for the Shin-Oita
Power Station (LNG, output of 480,000 kW, operations
to commence in July 2016) and Unit 2 for the Matsuura
Power Station
We will maintain our competitiveness so that we can
respond flexibly even if the strengths and weaknesses of
power sources change with various environmental changes
and possess nuclear power, coal or LNG-burning thermal
power, and renewable energy such as hydraulic and geo-
thermal power in a well-balanced manner.
Firmly determined not to cause accidents like the one that occurred at the Fukushima Daiichi Nuclear Power Station, we will continuously work
to improve the safety and reliability of nuclear power and use it as a power source that is effective in ensuring energy security, mitigating global
warming, and supplying electrical power economically.
We will enhance competitiveness in fuel procurement and enhance its flexibility by stepping up our initiatives for the entire fuel value chain such
as introducing fuel trading and promoting investments for upstream interests.
(3) Improving and making effective use of power
transmission and distribution networks
As a company with equipment covering the entire Kyushu region, we will
contribute to sustained development and growth of the region through
business activities such as creation and operation of equipment.
Building a 500,000 V Hinuka trunk line
Test project to improve the supply–demand balance for large-
capacity electricity storage systems
Building smart grids
In order to ensure that high-quality power is supplied in a reli-
able manner even if sunlight and other types of renewable energy
whose output is unstable comes into wide use, we will conduct
tests on both the supplier and user sides, obtain data that meet the
conditions of our equipment and the characteristics of local mar-
kets, and examine such data, thus solving issues to be addressed
in building smart grids in the future.
Building related systems in preparation for the full-fledged intro-
duction of smart meters
As of March 31, 2015, we have introduced approximately 830,000
smart meters. We aim to increase this number to around 8 million
by fiscal 2023.
Construction of the 500,000-Volt Himuka Trunk Line
Kanmon link line
Omarugawa
Higashikyushu
Kumamoto
Nakakyushu
Minamikyushu
Miyazaki
Reihoku
Matsuura
J-Power’s
Matsuura
Sendai (nuclear)
Himuka
Genkai (nuclear)
BuzenChuo500,000-volt
Himuka trunk line
Kitakyushu
Sefuri
Nishikyushu
[Legend]
: 500,000-volt
transmission line
: 220,000-volt
transmission line
: 500,000-volt
Himuka trunk line
being built in
this project
Location
Matsuura, Nagasaki
Prefecture
Generating
power
1 million kW
Power
generation
method
Pulverized coal-burning
ultra-super critical (USC)*
thermal power generation
Fuel Coal
Start of
operation
June 2020 (scheduled)
Conceptual drawing of the Matsuura Power Station Unit 2 at its completion
*Ultra-super critical (USC)
This is a highly efficient method of generating electricity that reduces environmental impact, boosting thermal
efficiency by operating at temperatures and pressures above the critical point of water.
Outline of the Matsuura Power Station Unit 2 Plan
J-Power’s Matsuura
Power Station
Matsuura Power
Station Unit 2
Length About 124 km
Number of
steel towers291Start of
construction
November 2014
Start of
operation
June 2019
The Kyushu Electric Group’s Medium-Term Management Policy Interview with the President
Message from the Chairperson and the President
10/90
Section 1
Kyushu Electric Power Summary
Section 2
Management Message
Section 3
Special Feature
Section 4
Management Base
Section 5
Financial Information
Kyushu Electric Power Company Annual Report 2015
(1) Strengthening the overseas electricity business [2030 goal for equity ownership in electricity output: 5 million
kW (3.5 million kW more than the current level)]
We will expand the IPP business mainly in
Asia whose market has high growth potential
Construction is currently underway at the
Sarulla geothermal IPP project in Indo-
nesia (generating power: 320,000 kW
[three systems]). The generators will start
operation in 2016 or thereafter as soon
as they are online.
We will strive to contribute to the interna-
tional community by developing human
resources and overcoming issues such as
low-cost, stable power supply through IPP
business and overseas consulting
Developing in growth markets to make the most of Kyuden Group strengths
Strategy
PillarIILocation of the Sarulla geothermal IPP project
in Indonesia
View from a production test site
Large-Scale Storage Battery Demonstration Business
In the future, in order to ensure stable power supply, we will continue to take measures to connect renewable energy sources smoothly. As part of these initiatives,
we will carry out a government-subsidized test project to improve the supply–demand balance for large-capacity electricity storage systems.
• Demonstration content
—We will conduct a demonstration to improve the
supply–demand balance by connecting a large-scale
storage battery to the grid, utilizing its electrical stor-
age capacity in the same manner as pumped storage.
—We will conduct a demonstration of measures to
effectively utilize the large-scale storage battery
through appropriate grid voltage control.
• Storage battery capacity
—Output: 50,000 kW
(storage: approximately 300,000 kWh)
Note: One of the largest in the world
• Storage battery location
—Within the site of the Buzen Power Station (Buzen,
Fukuoka Prefecture)
• Demonstration period
—FY2015–2016
[Demonstration Business of Improving the Supply–Demand Balance Using a Storage Battery
(Demonstration Concept)]
Buzen Power Station (thermal) Buzen, Fukuoka Prefecture)
• Site the storage battery in empty space within the site of the
power station
• Storage battery capacity: 50,000 kW
(approximately 300,000 kWh*)
*Equivalent to the amount of electricity used by 1,000 homes
in one month
*Storage battery site area Approximately 12,000 m2
(Equivalent to 1.5 soccer pitches)
Storage battery unit
AC/DC rectifier
Sarulla area
Indonesia
(Sumatra
Island)
Malaysia
Singapore
Equator
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Section 1
Kyushu Electric Power Summary
Section 2
Management Message
Section 3
Special Feature
Section 4
Management Base
Section 5
Financial Information
Kyushu Electric Power Company Annual Report 2015
Geothermal: Sugawara Binary Cycle Power Station (Kokonoe, Kyushu Prefecture)
The Sugawara Binary Cycle Power Station* (5,000 kW), which makes effective use of geothermal wells owned
by the town of Kokonoe in Oita Prefecture, commenced operations in Jun 2015. This is Japan’s first geother-
mal power development project that involves collaboration between a local government and a private enterprise
(Kyuden Mirai Energy).
* Binary power generation utilizes comparatively low-temperature steam and heated water that cannot be used by conventional geothermal power generation systems. This
method is expected to find application on islands that have abundant geothermal sources and for generation at hot springs. Sugawara Binary Cycle Power Station
Planned site
3-1, Nakasode, Sodegaura-shi, Chiba Prefecture
(The site is owned by Idemitsu Kosan.)
Power generation
method
Ultra-super critical (USC) power generation
Scale of power
generation
Maximum: 2 million kW (1 million kW x two units)FuelCoal (Burning a mixture of biomass and coal is
also under consideration.)
Start of operation Scheduled for the mid-2020s
Planned power station
site (Sodegaura, Chiba
Prefecture)
(2) Develop the electrical power business outside Kyushu [2030 goal for power sources developed outside Ky-
ushu: 2 million kW (2 million kW more than the current level)]
We will develop power sources outside Kyushu for our own use mainly through alliances with other companies
We established Chiba-Sodegaura Energy Co., Ltd. (May 2015)
We will consider ways to secure electrical power supply capabilities for our retail sales until power sources are developed by using material
exchanges and other means of procurement effectively in addition to power transmission from within Kyushu region
(3) Expanding renewable energy business
[2030 development goal: 4 million kW (2.5 million kW more than the current level*)]
* Breakdown: +800,000 kW for geothermal power; +200,000 kW for hydroelectric power; +1.1 million kW for wind power, and +400,000 kW for other in Japan and abroad
In July 2014, we established Kyuden Mirai Energy Co., Inc., a general developer of renewable energy sources. By liaising with Kyushu Electric,
Kyuden Mirai Energy will meet the local community’s broad-ranging needs through a single channel.
We will aim at risk diversification and portfolio development with future policy trends and technological innovation in mind
Developing Renewable Energy in Collaboration with Group Companies
Through development of the Sugawara Binary Cycle Power Station and by participating in demonstration tests for next-generation floating
wind generation (offshore).
Leveraging the expertise we have cultivated in the Kyushu region to expand our business in other parts of Japan, as well as overseas.
Outline of the power station plan
We recently agreed with Idemitsu Kosan Co., Ltd. and Tokyo Gas Co., Ltd. to form an alliance to consider developing coal-burning thermal power stations
jointly. To that end, the three companies established the Chiba-Sodegaura Energy Co., Ltd. on May 1, 2015.
Taking into consideration the impending full liberalization of the electricity retail market, the three partner companies will make the best use of the strength
of their respective value chains and other assets to achieve safer, lower-priced, and more stable power supply, thus meeting the demands and expectations of
society as energy companies. They will also aim at making the utmost effort to take appropriate environmental measures and contribute to local economies.
Chiba
Tokyo
Kanagawa
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Message from the Chairperson and the President
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Section 1
Kyushu Electric Power Summary
Section 2
Management Message
Section 3
Special Feature
Section 4
Management Base
Section 5
Financial Information
Kyushu Electric Power Company Annual Report 2015
(1) Developing innovative human resources who take on new challenges
Through a groupwide, cross-functional team project, we will cultivate an organizational culture that embraces challenges.
(2) Creating organizations that respond swiftly to changes
We will respond to full liberalization and the licensing system.
To win out over the competition, we will concentrate on sales and establish systems to enhance competitiveness
We will guild an organizational management and business administration system to further enhance our neutrality in the transmission sector
(3) Bolstering the financial foundation of the Kyuden Group as a whole and enhancing its competitive power
We will make effective use of external knowledge of the Procure-
ment Reform Promotion Committee, established in February 2014,
to promote material/equipment procurement reforms, create a
greater cost awareness of the need for continuous cost reductions,
and step up cost management.
From the perspective of reducing fuel consumption, we are striving
to improve thermal efficiency at thermal power stations by replacing
existing equipment with high-efficiency equipment.
(4) Pursue safety and security
Establishing internal systems in preparation for compound disasters
We have established internal systems so that if a multiple disaster that involves both a natural one such as an earthquake and tsunami and a
nuclear one occurs, a natural disaster response headquarters and a nuclear one will be combined to form a comprehensive center for integrated
action.
Reinforcing management of nuclear power risks
We are enhancing communication with local communities about nuclear power For details, see the Special Feature on pages 25-31.
Establishing a robust business foundation
Strategy
PillarIIIFY2011
level
(before
earthquake)Goal10% average
cost reduction
for FY2013–2015
Result
12% FY2014
cost reduction
Further future
reductions
Major Efforts
-Review of specifications
and construction methods
-Applying competitive ordering to a wider range of
projects, using ingenious ideas for ordering methods
making the most of the principles of competition, etc.
[Goal for Reduction in Material/
Equipment Procurement Costs and Results]
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Message from the Chairperson and the President
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Section 1
Kyushu Electric Power Summary
Section 2
Management Message
Section 3
Special Feature
Section 4
Management Base
Section 5
Financial Information
Kyushu Electric Power Company Annual Report 2015
(5) Ensuring thorough CSR management
Reinforce the CSR management cycle.
Conduct environmental preservation activities in the aim of being an eco-friendly corporate group.
Prioritize such programs as the burning of fields in the Kuju Bogatsuru wetlands in Oita Prefecture.
Offer environmental education targeting the next generation.
Promote compliance management.
Conduct volunteer activities in collaboration with the local community to resolve local issues.
We will participate in such initiatives as Korabora Q-den, a volunteer activity aimed at solving local problems in cooperation with NPOs and
other groups.
A scene from the burning of a field
Project to build terraces at the courtyard of the Aya junior high
school (Miyazaki)
Kuju Bogatsuru wetlands and Mt. Hiiji (Oita)
Environmental protection activities at Niji-no-Matsubara (Saga)
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Message from the Chairperson and the President
14/90
Section 1
Kyushu Electric Power Summary
Section 2
Management Message
Section 3
Special Feature
Section 4
Management Base
Section 5
Financial Information
Kyushu Electric Power Company Annual Report 2015