Fujifilm Enters Japan Power Market to Sell Excess Output

Fujifilm Holdings Corp. (4901), a maker of cameras, optical devices and medical equipment, will begin trading in wholesale electricity, aiming to profit from government plans to ease power-industry regulations.

Fujifilm won a license to begin trading from the Japan Electric Power Exchange in October, spokesman Takahiro Taguchi said in an interview. The Tokyo-based company plans to sell excess electricity from power generators in its plants in Kanagawa and Shizuoka prefectures on the Pacific coast southwest of Tokyo, and a plant on the southern island of Kyushu, he said, without giving a timeline.

Japan plans to boost trade and competition on the wholesale market as power prices, already twice those in the U.S., are set to rise due to closure of nuclear reactors after the Fukushima disaster. Transactions on the wholesale market accounted for 0.6 percent of electricity supplied by the nation’s 10 regional power utilities in the year ended March 2011, according to the trade and industry ministry.

The lack of trading reflects that utilities run regional monopolies and have little interest in selling surplus, cheap electricity to competitors.

Nippon Paper Group (3893) also won a power trading license in June last year and is selling surplus electricity to regional utilities to avoid power shortages, spokeswoman Miho Fujita said by phone. The company also plans to sell surplus electricity to the wholesale exchange and companies, she said.

Nippon Paper, among Japan’s major non-utility power producers, has about 1,740 megawatts of generation capacity, Fujita said. The capacity can provide electricity to 580,000 typical Japanese homes, according to data provided by Tokyo Electric Power Co.

The Japan Electric Power Exchange, which was established in 2003, has 59 trading members including electricity and gas utilities, trading companies and refiners, according to its membership list.

To contact the reporters on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net; Tsuyoshi Inajima in Tokyo at tinajima@bloomberg.net

To contact the editors responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net; Jason Rogers at jrogers73@bloomberg.net

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