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![[1] A. Yanagisawa et al., “Economic and Energy Outlook of Japan through FY2019.
Decelerating growth and growing disquiets.,” no. July, pp. 1–30, 2018.
[2] T. Shinkawa, “Electricity System and Market in Japan,” IT World, no. March, 2018.
[3] I. Kurihara, “Deregulation of Electric Power Industry in Japan and the Present Practice,” pp.
143–146, 2000.
[4] H. Asano, “Restructuring the electricity industry and emerging issues in Japan,” 3rd Int.
Conf. Deregul. Restruct. Power Technol. DRPT 2008, no. April, pp. 162–166, 2008.
[5] International Atomic Energy Agency, “Country Nuclear Power Profiles – Germany,” 2018.
[6] I. Kurihara, “Restructuring of the electric power industry and the current state of the power
market in Japan,” 2006 IEEE Power Eng. Soc. Gen. Meet. PES, pp. 1–6, 2006.
[7] M. Marmiroli and Y. Tsukamoto, “Technical impact of deregulation in Japan [power
industry],” PowerCon 2002 - 2002 Int. Conf. Power Syst. Technol. Proc., vol. 1, pp. 178–181,
2002.
[8] “Classification of Businesses Specified in the Electricity Utilities Business Act ( extract from
the Act ),” p. 2019, 2019.
[9] T. C. Exchange, “Overview of TOCOM Electricity Market Electricity Market in Japan,” no.
September, 2019.](https://image.slidesharecdn.com/japanpowersectorliberalizationrohitvijay-191119070439/85/Japan-power-sector-liberalization-17-320.jpg)
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Japan power sector liberalization
1. Japan has two interconnected power grids operating at different frequencies that are connected by a 1.2 GW HVDC link. It has the second highest pumped storage capacity and is the third largest producer of solar power. 2. Following the 2011 Fukushima nuclear disaster, Japan restructured its power sector to increase competition and diversify its energy mix away from nuclear and fossil fuels. This included establishing independent system operators and power exchanges to liberalize the market. 3. Reforms over the past decade have included establishing a capacity market, requiring utilities to divest generation assets, and mandating greater participation in wholesale markets. These changes aim to improve security of supply, reduce costs for consumers, and expand business opportunities in the power
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Japan power sector liberalization
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- 2. 1.Two wide areasynchronous grids connected by HVDC connection. 2. 2nd Highest Pumped storage capacity 27GW, 3rd largest solar PV capacity (50 GW) 3. 2011 Fukushima Nuclear Disaster. (EASTERN GRID) 4. Japan is an island and resource poor country (optimal combination of power resources is very necessary) EASTERN JAPAN 50 HZ WESTERN JAPAN 60 HZ 1.2 GW CAPACITY HVDC LINK
- 3. YEAR 2010 20152017 2019 GENERATED (TWH) 1028 920 1027 1026 HYDRO 9% 9% 9% 8% FOSSIL FUEL 62% 83% 75% 71% COAL 25% 31% 28% 28% LNG 29% 45% 41% 38% OIL 8% 8% 7% 5% NUCLEAR 29% 1% 3% 6% RENEWABLES 1% 4% 8% 9% OTHERS 1% 2% 5% 5%
- 4. 1995 WHOLESALE MARKET FOR IPP 2000 EHV LIBERALIZATION 2003 JPEX 2004 ESCJ NTO 2005 HV LIBERALIZATION 2008 HOUR AHEAD MARKET 2011 EARTHQUAKE 2013 ELECTRICITY BUSINESS ACT 2015 OCCTO ESTABILISHMENT 2016 EMSC ESTABILISHMENT LV LIBERALIZATION 17TH SEP 2019 TOCOM APRIL 2020 UNBUNDLING OF T&D
- 5. IPP INDEPENDENT POWEREPRODUCER JEPXJAPAN ELECTRIC POWER EXCHANGE ESCJ ELECTRIC POWER SYSTEM COUNCIL OF JAPAN NTO NEUTRAL TRANSMISSION ORGANIZATION OCCTOORGANIZATION FOR CROSS REGIONAL COORDINATION OF TRANSMISSION OPERATORS EMSC ELECTRICITYMARKET SURVEILLANCE COMMISSION TOCOM TOKYO COMMODITY EXCHANGE
- 7. APRIL 2015 • Establishmentof OCCTO APRIL2016 • Full liberalization of entry to electricity retail business APRIL 2020 • Legal unbundling of transmission/ distribution sector ELECTRICITY BUSINESS ACT (2013) PROCESS OF ELECTRICITY SYSTEM REFORM 3 GOALS, 3STEPS 1. Securing Stable Electricity Supply 2.Suppressing Electricity Rates to the Maximum Extent Possible 3. Expanding Choices for Consumers and Business Opportunities
- 9. 1. General ElectricityUtilities(Total 10, Private Owned Company) Responsible for supplying electricity from power generation to distribution to the consumers in their respective service area. Before earthquake these companies are Regional Electricity Operator. 2. IPP 3. JEPX, TOCOMMARKET OPERATOR 4. OCCTO ISO 5. TDSO REGIONAL SYSTEM OPERATOR 6. EMSC ELECTRICITY MARKET SURVEILLANCE COMMISSION UNDER METI (MINISTRY OF ECONOMY TRADE AND INDUSTRY)
- 11. JEPX:-Privately owened incorporatedorganization (2005) FORWARD DAY AHEAD INTRADAY BIDDING :- MCP, MCV 30% OF TOTAL ELECTRICITY DEMAND Base-load Market, Balancing Market, Capacity Market and Non-Fossil Value Trading Market, and Future transaction are under discussion for near future establishment. TOCOM FUTURE CONTRACT MARKET – 17TH SEP. 2019
- 12. 2016 • Nuclear mostlyoffline, only 4% of generation mix • Utilities required to move generation into separate business unit and compete – by April 2018 • Utility generators not required to offer supply into wholesale market – JEPX • Utility generators are not offering bilateral supply contracts to retailers • Feed in Tariff (FIT) doesn’t exist for biomass, however does for wind and solar – however, utilities making transmission access for wind very difficult. Today • Nuclear steadily coming back online, now 12% of generation mix • Utilities completed move of generation into separate business unit • Utility generators are required to offer supply into wholesale market – JEPX • Rules now in place whereby if utility generator offers supply into JEPX at a high price and receives no buy bids, utility retail company is required to purchase the power at the high offer price • Utility generators now offering bilateral supply contracts to retailers • Feed in Tariff (FiT) does exist for biomass, wind and solar – now OCCTO decides who gets transmission access • Regulatory initiative to eliminate FiT within a couple years • Growth in IPP generation is now outpacing utility projects
- 13. Today • In thefirst year about 100 companies received their METI retail license • Predominantly existing companies with some sort of customer base for other products/services – not energy • Most retailers only offered simple savings vs tariff product on a month-to- month basis • Many retailers entered balancing pool agreements with wholesale service providers • Sumitomo, Marubini, etc. --- 3 or 5 year contracts • Pool operator controlled supply price, provided scheduling and balancing services, “jail” for retailers • Pool operators did not offer credit sleeve type agreements • New market entrants receive their METI license in about 4 months
- 14. 2016 • OCCTO recentlyformed and assigned how to create (with METI) a capacity, transmission and ancillary market • OCCTO assigned all enrollment and switching activities between retailers and utilities • OCCTO mandated to manage transmission market, including siting of new generation and access • OCCTO has a staff of about 70 people Today • OCCTO launching capacity market in April 2019 with full market implementation by 2021 • Market rules published. Starting with small volumes on 3 year bids, by 2021 full market • OCCTO launching ancillary market (called balancing market) in April 2019 • Bid style market --- will replace utility back up supply by 2020 • OCCTO now has a Megawatt market (Demand Response) • Utilities mandated to bid and buy 20 MW each to start • OCCTO in full control of transmission sitting and access
- 15. 2016 • JEPX hassame day/next day market for each of the 9 utilities • Volumes pre-2016 about 2.5% of the overall market – in 2016 volume increases to 5% • Little or no utility generation participation • Forward “bulletin board” style market with no activity at all • No trading – bilateral or hedging market exists Today • JEPX consolidates 9 markets into 2– east & west • Improves deliverability and liquidity enabling previous utilities with no head room to become viable • JEPX volumes steadily increase to about 20% of the overall market • METI mandates utility generators must offer initially 10% of their generation with steady growth by year-end 2018 to 18% • JEPX experiences high heat and cold price spikes in 2018, so METI mandates utility generators must double their offered volumes for 2019 • METI forces JEPX to modify its forward market rules – however, volumes haven’t grown much • Now several trading companies, ability to hedge, and emerging bilateral market.
- 16. IEX and JEPXEnter MoU for Cooperation in Electricity Market.
- 17. [1] A. Yanagisawaet al., “Economic and Energy Outlook of Japan through FY2019. Decelerating growth and growing disquiets.,” no. July, pp. 1–30, 2018. [2] T. Shinkawa, “Electricity System and Market in Japan,” IT World, no. March, 2018. [3] I. Kurihara, “Deregulation of Electric Power Industry in Japan and the Present Practice,” pp. 143–146, 2000. [4] H. Asano, “Restructuring the electricity industry and emerging issues in Japan,” 3rd Int. Conf. Deregul. Restruct. Power Technol. DRPT 2008, no. April, pp. 162–166, 2008. [5] International Atomic Energy Agency, “Country Nuclear Power Profiles – Germany,” 2018. [6] I. Kurihara, “Restructuring of the electric power industry and the current state of the power market in Japan,” 2006 IEEE Power Eng. Soc. Gen. Meet. PES, pp. 1–6, 2006. [7] M. Marmiroli and Y. Tsukamoto, “Technical impact of deregulation in Japan [power industry],” PowerCon 2002 - 2002 Int. Conf. Power Syst. Technol. Proc., vol. 1, pp. 178–181, 2002. [8] “Classification of Businesses Specified in the Electricity Utilities Business Act ( extract from the Act ),” p. 2019, 2019. [9] T. C. Exchange, “Overview of TOCOM Electricity Market Electricity Market in Japan,” no. September, 2019.