Management Policy
[FY2015-FY2019]
April 2015
Kyushu Electric Power Co., Inc.
Aiming to become a corporate group that provides
Japan’s best energy services
—Everyone eventually asks the Kyuden Group for energy!— 1Table of contents
1. Introduction
2. Long-term vision
3. Priority initiatives 21. Introduction
{ Up to now, we have continued to support the lives and economic activities of customers in Kyushu
region and grow together with the regional community by delivering a stable supply of low-priced, high-
quality energy.
{ Recently, we formulated the medium-term management policy (FY2013-FY2015) in April 2013, and
amidst the severe financial situation and supply-demand relations caused by the suspension of
operation of all our nuclear power stations, we have worked to achieve greater managerial efficiency,
resume operation of 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
competition in the years to come as the full liberalization of the retail market due to the electric power
system reforms scheduled for 2016.
{ In this competitive environment, in order to achieve our mission "Enlighten Our Future" and continue to
be trusted and chosen by customers as an energy supplier, we need to accelerate our reforms on a
group-wide basis. We therefore recently formulated the new Kyushu Electric Power Group Medium-term
Management Policy, which covers the five years from FY2015 to FY2019.
* In the future, the basic principle is that each member of the Kyuden Group develops their business independently, but
the Group also needs to work as one team since business growth will be even harder than before. Therefore, we have
revised the previous Kyushu Electric Power Medium-term Management Policy and renamed the revised one the Kyushu
Electric Power Group Medium-term Management Policy.
* We will reexamine the quantitative financial goals when we become confident that we can resume operation of all our
nuclear power stations (Sendai’s Units 1 and 2 and Genkai’s Units 3 and 4) for which we have filed applications for
examinations to ensure conformity to the new regulatory standards. 3{ While the population and energy demand in the world are increasing, the
population and energy demand in Japan are decreasing.
{ With the full liberalization of the electricity and gas retail markets in mind,
players are forming alliances and competing with one another in earnest
across industry boundaries.
{ With the introduction of the feed-in tariff system, renewable energy is
spreading rapidly.
{ While nuclear power is positioned as an important base load power source
that continues to contribute to the stability of energy supply-demand
structure, there are many uncertain factors involved such as spent nuclear
fuel, nuclear damage compensation systems, and regulatory risks.
{ There are also growing expectations for fossil fuel since unconventional
types of fossil fuel can be used effectively.
(Reference) Recognition of the business environment 4(1) Vision for 2030
2. Long-term vision
We aim to become a corporate group that provides Japan’s best energy
services by encouraging each and every one of our employees
to display leadership at their workplaces.
Aiming to become a corporate group that provides
Japan’s best energy services
—Everyone eventually asks the Kyuden Group for energy!—
Aiming to become a corporate group that provides
Japan’s best energy services
—Everyone eventually asks the Kyuden Group for energy!—
{ In order to continue to be trusted and chosen by customers in the future competitive
environment, it is necessary to continually take on the mission of stable power supply and
maintain our enthusiasm for fulfilling the mission as in the past, as well as outgrow our policy of
controlling the overall costs while pursuing operational efficiency and service improvement.
{ The Kyuden Group strives to continuously enhance its corporate value by taking a hard look at
the future, aiming high and working to move forward as one team to succeed in its business
activities. 5Basic policy
Services
{ Aim at Japan’s highest level of customer satisfaction by providing diverse
services including not only electrical power but also gas and other types of
energy, focusing on customers more than any other company, and making
swifter managerial decisions.
Competitive
power
{ Taking maximum advantage and further developing the strengths we have
cultivated in various fields to acquire the technological capabilities that we can
proudly claim as Japan’s best in each field.
(Examples include operation of power stations, geothermal development, and
response to emergencies and disasters.)
{ Aim at Japan’s highest level of productivity through constant daily business
improvements and reforms.
Organizational
strength
{ Develop a group of highly motivated employees who view the competitive
environment positively and take on new challenges.
{ Energize communication within the group to create a closely united corporate
group that is more vibrant and active in Japan.
2. Long-term vision 62. Long-term vision
Fulfillment of
missions
Ensuring priority allocation of managerial
resources and creation of new value
(2) Perspectives to devise strategy
{ Consider medium- to long-term strategy from the perspectives listed below in order to
attain a vision of where we should be in 2030.
Fulfill Kyushu Electric Power’s mission
Attractiveness of markets (market growth potential and competitiveness)
Competitive advantages (making the most of and further developing Kyuden Group
strengths and obtaining synergistic effects among businesses)
<Conceptual diagram>
Appeal of markets
Competitive
advantages 7(3) Three pillars of strategy to achieve a vision of where we should be
I. 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
II. 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
III. Enhance the organizational strength required to implement strategies to establish a robust
business foundation
Expanding
business
activitiestocoverAsiaandtheworld
Kyushuisthe
basisforall
businesses
Business development in a
Growing Market
Energy service business in Kyushu
Electricity, gas, distributed, energy-saving, etc.
Organizational abilities for
reform and growth and new
sources of profit
Oversea energy business Outside Kyushu energy business
Active use of
Strengths Input of
management
resources
Favorable growth
cycleIIIIIIFuture
businesses
Always pursuit
Renewable energy business
2. Long-term vision
Robust
business
foundation
[Goals for growth businesses]8Equity ownership in overseas
electricity output
1.5 million kW 5 million kW
(3.5 million kW more than
the current level)
Amount of power sources developed
outside Kyushu−2 million kW
(2 million kW more than
the current level)
(4) Growth roadmap
New medium-term management
policy
(FY2015-2019)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Next medium-term management policy
Medium-term management policy after
the next medium-term
Current
policy
Achievement
Achievement
Accelerated initiatives
Accelerated initiatives
Attaining a vision of
Attaining a vision of
what we should be
what we should be
Initiatives for growth
Initiatives for growth
2. Long-term vision2030Current
Current
condition
* The breakdown is +800,000 kW for geothermal power, +200,000 kW for hydraulic power, +1.1
million kW for wind power, and +400,000 kW for other types of energy in Japan and abroad.
Amount of renewable energy
developed
4 million kW
(2.5 million kW more than
the current level*)
1.5 million kW 9Overseas & outside Kyushu
electricity business
(incl. renewable energy business)
Company that delivers
electricity
(Current)
Electrical power business Gas and other businesses
KyushuareaOverseas/outside
Kyushu
Overseas & outside
Kyushu energy
services business*1
Evolution
Energy service business
*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.
Actively use our
strengths to move
into a growing area
(5) Image of Expansion of Business Areas
Corporate group that
provides energy services
Fuel trading
Gas ESP
Social and lifestyle
service*2
2. Long-term vision((E
Energy
nergySService
ervicePProvider)
rovider) 103. Priority initiatives
Pillars of strategy Priority initiatives
I. Meeting the diverse
energy needs of
customers in Kyushu
(1) Acquiring more Kyuden fans by providing diverse energy services
(2) Enhancing the competitiveness of power sources and fuel procurement
abilities
(3) Improving and effectively using power transmission and distribution network
technology
II. Making the most of
Kyuden Group
strengths to develop in
growth markets
(1) Strengthening overseas electricity business
(2) Developing electrical power businesses outside Kyushu
(3) Expanding renewable energy business
III. Establishing a robust
business foundation
(1) Developing innovative human resources who take on new challenges
(2) Creating organizations that respond swiftly to changes
(3) Reinforcing our financial foundation and enhancing competitiveness on a
group-wide scale
(4) Pursuing safety and security
(5) Promoting thorough CSR (corporate social responsibility) management
{ Priority initiatives for the next five years to attain a long-term vision 11(1) Acquire more Kyuden fans by providing 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)]
{ Service menus that suit the lifestyles of customers will be offered to provide
entertainment and excitement.
[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.
[Reflecting customer needs on energy services]
{ The opinions of customers will widely be collected through business activities and used
to improve the services and create new ones.
{ Social and lifestyle service businesses will be restructured taking into consideration
their relationships with energy service business and synergistic effects between the two.
I. Meeting the diverse energy needs of customers in Kyushu
Develop together with the local community and society as a whole by meeting the
diverse energy needs of customers in Kyushu where the Kyuden Group is based 12I. Meeting the diverse energy needs of customers in Kyushu
(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 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
geothermal 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.
{ By operating our own supply/demand-related functions such as fuel adjustments, power trading,
and supply/demand management in an integrated manner, we will enhance our supply &
demand adjustment abilities, thus maximizing the Group’s profitability. 13I. Meeting the diverse energy needs of customers in Kyushu
(3) Improving and effectively using power transmission and distribution
network technology
{ In order to deliver electrical power to support the industries of Kyushu region and the lives of its
people at a low cost in a stable manner, we will ensure stable operation of our electric power
systems and steady maintenance of our power transmission and distribution equipment.
{ We aim to achieve both high electricity quality and cost reductions by enhancing technological
capabilities and using ingenious ideas at work sites.
{ We will strengthen power transmission and distribution networks under transparent and neutral
business administration systems. We will also contribute to the spread of renewable energy and
attainment of smart communities.
{ We will effectively use the technology and know-how gained through our power transmission and
distribution businesses for business development in growth areas.
{ 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. 14(1) Strengthen overseas electrical power business [2030 goal for equity ownership in overseas electricity
output: 5 million kW (3.5 million kW more than the current level)]
{ Expand the IPP business mainly in Asia whose market has high growth potential
{ Strive to contribute to the international community by developing human resources and overcoming
issues such as low-cost, stable power supply through IPP business and overseas consulting
{ Aim to expand business domains for the future
(2) Develop the electrical power business outside Kyushu [2030 goal for power sources developed
outside Kyushu: 2 million kW (2 million kW more than the current level)]
{ Develop power sources outside Kyushu for our own use mainly through alliances with other companies
{ Secure the ability to supply electrical power 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) Expand renewable energy business [2030 development goal: 4 million kW (2.5 million kW more than the
current level]
{ Meet the diverse needs of customers for renewable energy through a single channel
{ Aim at risk diversification and portfolio development with future policy trends and technological
innovation in mind
{ Make the most of the know-how developed in Kyushu for business expansion in and outside Kyushu
region
II. Making the most of Kyuden Group strengths to develop in growth markets
Make the most of the technology and know-how that have been accumulated up to now in Japan and
abroad to develop the overseas electrical power business mainly in Asia
Work to develop the electrical power business outside Kyushu in order to meet the needs of customers
Actively develop renewable energy business and a globally growing market in Japan and abroad taking
into account factors such as stable supply and environmental performance 15III. Establishing a robust business foundation
Step up efforts to develop human resources and organizations required for implementing strategies
Strengthen the financial foundation and enhance competitiveness on a group-wide scale
Promote meticulous CSR (corporate social responsibility) management to enhance the trust of
customers, local communities, and society
(1) Develop innovative human resources who take on new challenges
{ We will ensure that all employees of the Kyuden Group share the mindset of contributing to society by
fulfilling Kyuden’s mission in addition to the actual task of attaining stable power supply.
{ As we enter a new period of competition, we will create among all employees an awareness of the
need to view the changing times positively and take on new challenges.
{ We will develop and choose personnel who will lead reforms with enthusiasm as the business
environment undergo major changes.
{ We will develop personnel who exert their originality and ingenuity to promote business
improvements and reforms.
(2) Create organizations that respond swiftly to changes
{ We will build a swift, flexible organizational management and business administration system.
{ We will make the most of information and communications technology (ICT) to achieve operational
efficiency and invigorate communication and collaboration across the boundaries of organizations.
{ In order to shift our focus from electricity business to group-wide energy service business, we will give
a concrete shape to group management functions. 16III. Establishing a robust business foundation
(3) Strengthen our financial foundation and enhance competitiveness on a group-wide
basis
{ We will make all-out efforts to achieve greater efficiency in all business activities and work
continuously for cost reductions.
{ We will increase profitability and restore the financial foundation.
{ We will promote technical development to establish competitive advantages.
{ We will maintain the technological capabilities and skills we have developed on a group-wide basis
and hand them over to the next generation.
(4) Pursue safety and security
{ In principle, we will give top priority to safety and security in all business activities.
{ We are keenly aware that there is no end to efforts to ensure the safety of nuclear power. Under the
top managers’ strong leadership, we will step up risk management and promote initiatives to reduce
nuclear risks. We will also promote face-to-face dialogues with local residents and reflect their
opinions in our business administration.
(5) Promote meticulous CSR (corporate social responsibility) management
{ Aiming to become an environmentally friendly corporate group, we will develop initiatives for protection
of the global environment and coexistence with the local environment.
{ We will make all-out efforts to ensure sincere, fair business administration through actions trusted by
society, not to mention compliance with laws and ordinances.
{ We will promote closer communication with society and reflect the opinions collected on business
administration in an appropriate manner. We will also disclose information in an easy-to-understand
way to increase the transparency of business activities.
{ We will contribute to solutions to social problems through collaboration with local residents, including
volunteer activities, and develop together with the local communities.
{ We will respect human rights and create environments easy to work in, where people with diverse
backgrounds can display their abilities to the maximum extent.
1-82, Watanabedori 2-chome, Chuo-ku,
Fukuoka-shi, Fukuoka-ken, Japan 810-8720
Phone: (092)761-3031 (operator)
Website: http://www.kyuden.co.jp