Tokyo, October 28, 2014 - Following the recent enactment of the revised Electricity Business Act, today Rakuten, Inc., Global Engineering Co., Ltd., and Takaoka Toko Co., Ltd. have established and registered a limited liability partnership (LLP) through joint investment in order to create a platform for developing energy demand. Moreover, on the same day ENNET Corporation has concluded an agreement as a member of this partnership in which it agrees to newly join the LLP with the objective of developing new services.
1. Background behind the Establishment of the LLP
Having set forth the objective of becoming the “number one internet service company in the world,” Rakuten has developed a business model known as the “Rakuten Ecosystem,” which provides a wide variety of services, including the globally unique B2B2C marketplace Rakuten Ichiba, a comprehensive travel site, financial services, and contents businesses, and more through a shared membership program. Under the “Rakuten Ecosystem” there are more than 70,000 contracted companies in different industries and with different configurations, as well as more than 94 million Rakuten members in Japan. To date, Rakuten has mainly specialized in the electricity demand side and has developed a variety of new services in partnership with new power companies and the like in order to apply the “Rakuten Ecosystem” model to the power business. Global Engineering and Rakuten have racked up cooperative achievements such as a power management services for accommodations which are contracted with Rakuten Travel, as well as the creation of a supply-side power system that utilizes lodging reservation data. Takaoka Toko, along with Rakuten and Global Engineering, has a history of promoting demand response for corporations that complies with the Open ADR standard.*
*Open ADR is the international standard for Automated Demand Response (ADR) technology. This is a mechanism that automates everything from the notifications about peak electricity demand to power saving and summaries of the results thereof, while also curbing peak electricity in real time by factoring in the circumstances of the consumers.
Rakuten, Global Engineering, and Takaoka Toko have agreed to build a platform for efficiently advancing the development of services for the power demand side. This decision was made in light of the greater development of services that are expected following the recent enactment of the revised Electricity Business Act and in anticipation of the across-the-board liberalization of the retail power market that will begin in 2016. The decision was made to proceed with a partnership organized pursuant to the Limited Liability Partnership Act as the vehicle for this business, in the interest of smoothly promoting the business by unifying various agreements pertaining to service development, the flexibility of internal governance, the rapidity of decision making, and the simplicity in allocating deliverables. ENNET Corporation, which joined this partnership today, is a major player in the new power business. ENNET and Rakuten are offering a demand response service aimed at households that uses a point service shared among visitors to their stores on an experimental basis. ENNET will lend its cooperation to developing new services for the LLP based on its extensive know-how in the retail power business.
2. Aims of Establishing the LLP
While various businesses are expected to grow increasingly active ahead of the across-the-board liberalization of the retail power market that will begin in 2016, the current reality is that the Japanese power market is still monopolized by general power providers. As things stand, new entrants have inefficient rules imposed upon them, with the imbalance calculations representative of these. Having an adequate number of market participants and eliminating the oligopolistic conditions are necessary requirements for creating a healthy competitive environment for a fair power market.
However, since Western markets are still in a state of underdevelopment ahead of their own liberalization of power, it is thought that a considerable amount of time and preparation is required in order to reinvigorate the Japanese energy market and achieve market development. For this reason, this partnership was established with the objective of creating a platform for developing services on the power demand side and to act as a model case for future institutional design.
3. Overview of the LLP
Energy Demand Development LLP
Shinagawa Seaside Rakuten Tower, 4-12-3 Higashi-shinagawa, Shinagawa-ku, Tokyo
(3) Business description
・Service development and sales through the use of big data on energy
・Planning and sales of energy management systems
・Services supporting the popularization of renewable energies
・Other ancillary projects related to the above items
(4) Overview of the constituent members of the partnership
Address: Shinagawa-ku, Tokyo
・E-commerce, e-books, travel, and other internet services and various financial services
2．Global Engineering Co., Ltd.
Address: Koga City, Fukuoka Prefecture
・Demand response proposals
・New power businesses
・Engineering and maintenance for non-utility generators
・Energy monitoring system proposals ESP business
3．Takaoka Toko Co., Ltd.
Address: Koto-ku, Tokyo
・Electrical equipment business, meter business, information and electronics equipment business, and construction work
Address: Minato-ku, Tokyo
・ Power trading business and power generation business
(5) Functional Managers
Functional manager: Yuichiro Sugawara (Manager of Energy Business, Rakuten, Inc.)
Functional manager: Hirotada Takahashi (Director, Global Engineering Co., Ltd.)
Functional manager: Fukuo Aoyanagi (Operating Officer / Manager of the Smart Grid
Business Promotion Division, Takaoka Toko Co., Ltd)
Functional manager: Naoyuki Taniguchi (Manager of the Corporate Planning Division,