Policy / Systems / Technology

April 6, 2013


Japanese Economy Ministry Unveils Time Schedule for Electricity System Reform

Keywords: Government Policy / Systems Renewable Energy 

A panel of experts on the electricity system reform under the Japanese Ministry of Economy, Trade and Industry released on Feb. 15, 2013, its final report, which includes a specific time schedule for fundamental changes to Japan's electricity system. As the reform requires large-scale restructuring of the electricity industry as well as preparation for implementing related regulations, the report sets out a step-by-step timetable.

The first step is to establish a national transmission organization by 2015 to improve planning for inter-regional transmission use and the adjustment of power supply and demand, two problems that surfaced after the Great East Japan Earthquake. The second step is to promote free entry into the retail market by 2016, which would require revitalization of the wholesale electricity market and the transition to a new regulatory system for monitoring transactions in the electricity market. Following the first two steps, the third step is to accelerate neutrality in the power transmission and distribution sector, which is necessary for electricity deregulation, and realize legal unbundling sometime between 2018 and 2020.

The committee has been discussing electricity system reform for about a year now, focusing on such topics as electricity deregulation and separation of utilities into electricity generation and transmission operators. Its goal is to stabilize the power supply without relying on nuclear power generation and to achieve large-scale diffusion of renewable energies. Although Japan's feed-in tariff system, started in July 2012, has helped paved the way toward a broad introduction of renewable energies in Japan, it is necessary to watch the rulemaking process closely as well as the effects of such reforms.

Written by Hironao Matsubara, Institute for Sustainable Energy Policies