Japan's electricity industry- financial impact [ by eurotechnology.com ]

Japan's electricity industry suffers huge losses from

nuclear to fossil switch Sept. 2006, 2012

Greetings!

What is the financial impact of Japan's switch from nuclear to fossil on Japan's electricity industry? Answer: Japan's electricity operators switched from about US$ 10 billion/year combined net profits to US$ 20 billion/year losses - far more dramatic than the impact of the Lehman shock. - Graphics below in this newsletter, and detailed analysis in the 169-page 3rd edition of our report on Japan's electricity industry.

annual net income of Japan's electricity operators

Electricity operator losses may drive innovation:

Losses are caused by high costs of fossil fuels and additional generation capacity brought online, and drive innovation, by forcing operators to look for new solutions to time-shift demand such as smart grids, and smart meters.

net margins of Japan's electricity operators

Electricity sales revenues were affected much more by the Lehman shock than by switching from nuclear to fossil

The figure below shows combined sales revenues of Japan's 10 regional electricity operators. Sales were strongly affected by the industrial downturn after the Lehman shock in September 2009, and have recovered since. There is no strong effect of the Fukushima disaster and nuclear -> fossil switch on electricity sales:

US$ 200 Billion/year = combined annual income of Japan's electricity operators

Because Japan's electricity operators have monopoly status in their regions, their financials are mainly affected by the economic status of their regions. All were affected dramatically on the sales side by the Lehman shock. This figure also shows that Japan's electricity industry has been very static for many years. Japan's Governments recent energy strategy provides for liberalization - executing this strategy will be the challenge.

Our report on Japan's electricity sector includes a 19-page explanation of Japan's new energy strategy which was announced on September 14, 2012 (Japan's Electricity Sector, 3rd edition of Sept. 26, 2012, 196 pages) [download a free sample outline]

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