Group companies

Following on from integration of the thermal power generation business into JERA in April 2019, we are slated to split off from the power transmission and distribution and sales divisions by April 2020. By having each business operate independently, we will steadily implement the four priority measures and realize sustainable growth for the Group.

New business structure

Business goal (consolidated ordinary income)

Aiming to become a total energy service corporate group that is one step ahead—Setting new business goals toward realization of our management vision—

Consolidated ordinary income was around 163 billion yen in �scal 2018 (excluding the time-lag impact of accrued income incurred by the fuel cost adjustment system). With this result, we have achieved the business goal we have been working toward (150 billion yen or more by �scal 2018). In “the Fiscal 2019 Initiatives to Address Management Challenges,” we have set a new business goal (consolidated ordinary income of 170 billion yen or more by FY2021) as a milestone on the way to realization of the vision we aim to realize that is stated in our management vision (consolidated ordinary income of 250 billion yen or more in the second half of 2020s) and have also shown concrete actions to be taken to achieve these goals. By acting without fail to implement these initiatives, we will advance toward “Putting the New Business Model into Actual Practice.”

Management vision

Second half of the 2020s(the vision we aim to realize)

Realize sustainable growth

Power generationand sales

Group companies

Powertransmission/ distribution

Overseas energybusinesses

New growth�elds

Previous goal

Achieved the goal

FY2018 FY2021 2020s

New goal

FY2021

Sustainable growth toward realization of our management vision

• Business model that separates power generation from sales to maximize energy business income• Further strengthen our resilience• Commercialize new growth �elds and increase income• Address social responsibility (ESG management, SDGs)

Results (FY2016–FY2018)

• Expanded sales area and services• Realized stable supply of electric power• Developed organizational structure• Thoroughgoing improvement in management ef�ciency• Formation of global value chain by JERA

Strengthen business base for growth

JERA

1:4 1:1Construction of a balanced business portfolio

JERA

Group companies

JERA

April 2019 April 2020

by FY2018

billion yenor more150 billion yen

or more250billion yenor more170Achieved

Chubu Electric Power Group

Power NetworkCompany

Power transmission/distribution business company

Customer Service &Sales Company

Retail electric powerbusiness company

Nuclear power

Renewable energy

Corporate planning and strategy, Business development,

Research and development, etc.

Nuclear power

Renewable energy

Split off

Split off

:New growth �eldsOverseas energybusinesses, etc.

Domestic energybusiness

:Overseas energy businesses, etc.

Domestic energybusiness

Second halfof the

Corporate planning and strategy, Business development,

Research and development, etc.

19

Feature 1

Group companies

Following on from integration of the thermal power generation business into JERA in April 2019, we are slated to split off from the power transmission and distribution and sales divisions by April 2020. By having each business operate independently, we will steadily implement the four priority measures and realize sustainable growth for the Group.

New business structure

Business goal (consolidated ordinary income)

Aiming to become a total energy service corporate group that is one step ahead—Setting new business goals toward realization of our management vision—

Consolidated ordinary income was around 163 billion yen in �scal 2018 (excluding the time-lag impact of accrued income incurred by the fuel cost adjustment system). With this result, we have achieved the business goal we have been working toward (150 billion yen or more by �scal 2018). In “the Fiscal 2019 Initiatives to Address Management Challenges,” we have set a new business goal (consolidated ordinary income of 170 billion yen or more by FY2021) as a milestone on the way to realization of the vision we aim to realize that is stated in our management vision (consolidated ordinary income of 250 billion yen or more in the second half of 2020s) and have also shown concrete actions to be taken to achieve these goals. By acting without fail to implement these initiatives, we will advance toward “Putting the New Business Model into Actual Practice.”

Management vision

Second half of the 2020s(the vision we aim to realize)

Realize sustainable growth

Power generationand sales

Group companies

Powertransmission/ distribution

Overseas energybusinesses

New growth�elds

Previous goal

Achieved the goal

FY2018 FY2021 2020s

New goal

FY2021

Sustainable growth toward realization of our management vision

• Business model that separates power generation from sales to maximize energy business income• Further strengthen our resilience• Commercialize new growth �elds and increase income• Address social responsibility (ESG management, SDGs)

Results (FY2016–FY2018)

• Expanded sales area and services• Realized stable supply of electric power• Developed organizational structure• Thoroughgoing improvement in management ef�ciency• Formation of global value chain by JERA

Strengthen business base for growth

JERA

1:4 1:1Construction of a balanced business portfolio

JERA

Group companies

JERA

April 2019 April 2020

by FY2018

billion yenor more150 billion yen

or more250billion yenor more170Achieved

Chubu Electric Power Group

Power NetworkCompany

Power transmission/distribution business company

Customer Service &Sales Company

Retail electric powerbusiness company

Nuclear power

Renewable energy

Corporate planning and strategy, Business development,

Research and development, etc.

Nuclear power

Renewable energy

Split off

Split off

:New growth �eldsOverseas energybusinesses, etc.

Domestic energybusiness

:Overseas energy businesses, etc.

Domestic energybusiness

Second halfof the

Corporate planning and strategy, Business development,

Research and development, etc.

Four Priority Measures (Speci�c Actions)

Strengthening our business base for growth and achieving sustainable growth3Provide services that continue to be chosen by customersSales

Accelerate commercialization in new growth fields4Provide new forms of community through the creation of Community Support InfrastructureNew Growth

Stable power supply for a new age2Assure quality of electric power and strengthen resiliencePower Network

See page 39

See page 35

See page 37

See page 33

See page 29

See page 22

See page 45

See page 23

Improving safety further at Hamaoka Nuclear Power Plant1Continue measures aiming for a safer, more reliable power plantNuclear

Improve energy self-suf�ciency and realize a low-carbon societyRenewable Energy

Increase our corporate value through management of the entire value chainJERA

Overseas deployment of utility business and clean energy businessOverseas Business

Deepen business management in light of ESG and realize sustainable growth while improving our corporate valueESG

Chubu Electric Power Company Group Integrated Report 2019 20

Aiming to become a total energy service corporate group that is one step ahead—Setting new business goals toward realization of our management vision—

We will quickly and steadily implement measures to further increase

safety at our facilities, including the Hamaoka Nuclear Power Plant. We

will also keep steadily investing in equipment needed for stable supply

while continuing to streamline. When making investments, we will

thoroughly ensure ef�ciency.

In order to make sustainable growth a certainty into the future, we will

conduct appropriate risk management, and on that basis engage in

strategic investment for business growth and development.

We envision a 7% or higher ROE level when we

achieve the �scal 2021 business goal. For the

medium- to long-term ROE level, we will aim for a

level that exceeds the cost of capital while closely

monitoring the necessary shareholders’ equity ratio

and other such factors.

Chubu Electric Power Group will continue to invest in

plants and equipment for a safe and stable supply of

electricity as well as in growth sectors to maintain

sustainable growth and improve our corporate value.

Providing strong shareholder returns is an important

mission for our Group. We will continue to pursue stable

dividends, and consider our pro�t growth. Our target

consolidated payout ratio is over 30%.

Growth �eldsBasic conceptual approach to investment and capital policy

ROE

% or higher7Level when the �scal 2021business goal is achieved

Consolidatedpayout ratio

% or higher30

[5-year total up to �scal 2023]

billion yenor more300

billion yen100billion yen100billion yen100

Renewable energy:

Overseas business:

New growth:

Renewable energy• As to renewable energy, we have declared the goal of new

development of 2 GW or more (up to around 2030). In order to accelerate this initiative, we established the Renewable Energy Company in April 2019.

• We will collaborate with various corporations with a view to realizing a low-carbon society, working to develop and popularize domestic renewable energy power sources by participating in investment funds and related activities. We will additionally engage in implementation and support for the model of local production for local consumption and other such activities at the regional level.

Overseas businesses Engage in business centered in Europe, North America, and Southeast Asia

Using its own resources (electric power grid, sales and solutions, renewable energy generation), Chubu Electric Power will aim to provide new community services that contribute to the resolution of social issues in every country and region, as we do in Japan, with a focus on Utility business that supports local communities by providing stable, affordable public infrastructure services and Clean energy business that contributes to global realization of a low-carbon society

New GrowthIn order to support the vision for society as it changes toward a human-centered smart society (Society 5.0), Chubu Electric Power will provide new forms of community by taking the resolution of social issues as a point of departure and bringing about the precise inclusion of technological innovation (Industry 4.0) together with the evolution of conventional energy infrastructure into Community Support Infrastructure (Utility 3.0).

Strengths cultivated in the energy business• Connections and relationships of trust with customers• Knowledge of building and operating electricity infrastructure• Energy-saving and CO2 reduction proposals based on optimal use of energy that

leverage our technical capabilities and proposal capabilities

Services to raise the quality of life of individuals by using various data

Community services based on connecting and evolving several kinds of social infrastructure

Necessary investmentin electric power safety

and stable supply

Strategic investment in growth �elds

Ef�ciency indicator (ROE)

Shareholder return policy

Submarine power transmission business for offshore wind power plants

Investment business, incubation, human asset development

Power distribution/electricity retail business

Expansion throughM&As and alliances

Expansion throughM&As and alliances

Country Project (Business in operation)

Europe

Asia

Africa Paci�c Central and South America

Middle East

North America

Germany

Singapore

Philippines

Electric power company: Utility 3.0

Evolution of the energy industry by means of social change and technological innovation

New growth fields

Around 2030As of December 2017(including Group companies)

Installed capacity

Biomass 0.007

Wind power 0.172

Solar power 0.292

Hydro power 2.143

2.61 GW2.56 GW

2 GW or moreof new development

(excluding pumped storage)

As of December 2018(including Group companies)

Human-centered smart society Greater efficiency and customizationby means of AI and IoT

Society: Society 5.0 Industry: Industry 4.0

Resolving social issues(from perspective of needs)

Technological innovation(from 4th Industrial Revolution perspective)

Provide new forms of community by creating Community Support Infrastructure

Chubu Electric Power Group’s strengths(from core competence perspective)

See page 33 Renewable Energy Company

21

Aiming to become a total energy service corporate group that is one step ahead—Setting new business goals toward realization of our management vision—

We will quickly and steadily implement measures to further increase

safety at our facilities, including the Hamaoka Nuclear Power Plant. We

will also keep steadily investing in equipment needed for stable supply

while continuing to streamline. When making investments, we will

thoroughly ensure ef�ciency.

In order to make sustainable growth a certainty into the future, we will

conduct appropriate risk management, and on that basis engage in

strategic investment for business growth and development.

We envision a 7% or higher ROE level when we

achieve the �scal 2021 business goal. For the

medium- to long-term ROE level, we will aim for a

level that exceeds the cost of capital while closely

monitoring the necessary shareholders’ equity ratio

and other such factors.

Chubu Electric Power Group will continue to invest in

plants and equipment for a safe and stable supply of

electricity as well as in growth sectors to maintain

sustainable growth and improve our corporate value.

Providing strong shareholder returns is an important

mission for our Group. We will continue to pursue stable

dividends, and consider our pro�t growth. Our target

consolidated payout ratio is over 30%.

Growth �eldsBasic conceptual approach to investment and capital policy

ROE

% or higher7Level when the �scal 2021business goal is achieved

Consolidatedpayout ratio

% or higher30

[5-year total up to �scal 2023]

billion yenor more300

billion yen100billion yen100billion yen100

Renewable energy:

Overseas business:

New growth:

Renewable energy• As to renewable energy, we have declared the goal of new

development of 2,000 MW or more (up to around 2030). In order to accelerate this initiative, we established the Renewable Energy Company in April 2019.

• We will collaborate with various corporations with a view to realizing a low-carbon society, working to develop and popularize domestic renewable energy power sources by participating in investment funds and related activities. We will additionally engage in implementation and support for the model of local production for local consumption and other such activities at the regional level.

Overseas businesses Engage in business centered in Europe, North America, and Southeast Asia

Using its own resources (electric power grid, sales and solutions, renewable energy generation), Chubu Electric Power will aim to provide new community services that contribute to the resolution of social issues in every country and region, as we do in Japan, with a focus on Utility business that supports local communities by providing stable, affordable public infrastructure services and Clean energy business that contributes to global realization of a low-carbon society

New GrowthIn order to support the vision for society as it changes toward a human-centered smart society (Society 5.0), Chubu Electric Power will provide new forms of community by taking the resolution of social issues as a point of departure and bringing about the precise inclusion of technological innovation (Industry 4.0) together with the evolution of conventional energy infrastructure into Community Support Infrastructure (Utility 3.0).

Strengths cultivated in the energy business• Connections and relationships of trust with customers• Knowledge of building and operating electricity infrastructure• Energy-saving and CO2 reduction proposals based on optimal use of energy that

leverage our technical capabilities and proposal capabilities

Services to raise the quality of life of individuals by using various data

Community services based on connecting and evolving several kinds of social infrastructure

Necessary investmentin electric power safety

and stable supply

Strategic investment in growth �elds

Ef�ciency indicator (ROE)

Shareholder return policy

Submarine power transmission business for offshore wind power plants

Investment business, incubation, human asset development

Power distribution/electricity retail business

Expansion throughM&As and alliances

Expansion throughM&As and alliances

Country Project (Business in operation)

Europe

Asia

Africa Paci�c Central and South America

Middle East

North America

Germany

Singapore

Philippines

Electric power company: Utility 3.0

Evolution of the energy industry by means of social change and technological innovation

New growth fields

Around 2030As of December 2017(including Group companies)

Installed capacity

Biomass 7

Wind power 172

Solar power 292

Hydro power 2,143

2,610 MW2,560 MW

2,000 MW or moreof new development

(excluding pumped storage)

As of December 2018(including Group companies)

Human-centered smart society Greater efficiency and customizationby means of AI and IoT

Society: Society 5.0 Industry: Industry 4.0

Resolving social issues(from perspective of needs)

Technological innovation(from 4th Industrial Revolution perspective)

Provide new forms of community by creating Community Support Infrastructure

Chubu Electric Power Group’s strengths(from core competence perspective)

See page 33 Renewable Energy Company

Chubu Electric Power Company Group Integrated Report 2019 22

Feature 1