Japanese Power Company to Begin Negawatt Exchange to Meet Peak Demand

Kansai Electric Power Co. (KEPCO) announced on June 21, 2012, that it would introduce a negawatt (negative watt) exchange scheme this summer in an attempt to stabilize the balance of power supply and demand. The scheme was implemented between July 2 and September 7, 2012, targeting large commercial users outside of KEPCO's service area, as part of the utility's efforts to tackle what might be a tight power supply this summer.

Specifically, the scheme would apply to power users with contracts of 500 kilowatts or more in the service areas of Chubu Electric Power Co., Hokuriku Electric Power Co., and Chugoku Electric Power Co. To participate in the scheme, eligible users would need to inform an aggregator of the volume of power (in kilowatts) they expect to save and their preferred sales price. KEPCO will invite power users to bid for the scheme between Friday of the previous week and the day before the date when power supply is expected to be tight. KEPCO would call for bids for each day it assumes additional power supply would be needed.

Bidders offering lower prices would win in the order of their bid price until the kilowatts KEPCO put out to tender are satisfied. The power companies would transmit surplus electricity collected from successful bidders to KEPCO. The amount of collected electricity should be more than 1,000 kilowatts to pass through the transmission lines interconnecting each of the three utilities' service areas.