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Liberalization of Japan's Energy Markets
Reform of the Japanese Energy Market: Liberalization of the Retail Electricity Market Commences from April 2016, Retail Gas Liberalization Commences From April 2017. See http://www.enecho.meti.go.jp/en/category/electricity_and_gas/electric/electricity_liberalization/
In Japan, liberalization of the electricity/gas markets which operated as local monopolies has been in progress for some time now. These reforms were initiated in response to the aftermath of the Great East Japan Earthquake on March 11, 2011, which led to the shutdown of all nuclear power plants throughout the country.
Liberalization is being implemented in stages, and commenced in 1995 for the gas market, and 2000 for the supply of electricity to corporate customers. Full liberalization was achieved from April 2016 (http://www.enecho.meti.go.jp/en/category/electricity_and_gas/electric/electricity_liberalization/supply/).
In the lead-up to this next stage, 2 organizations have been created. In April 2015, the “Organization for Cross-regional Coordination of Transmission Operators (OCCTO)” (http://www.occto.or.jp/en/index.html)was formed with the aim of securing the stability of the electricity supply and demand, through monitoring of the stability of supply and setting out rules concerning wheeling rates. In September of the same year, the Electric Power Transactions Monitoring Committee was formed to monitor for unfair transactions and to ensure the protection of consumers.
The final stage of the reforms will be implemented by 2020, and requires power plants to legally unbundle the transmission and distribution sectors (Tokyo Electric Power Co completed this stage in April, 2015). It is anticipated that, as the number of new retail suppliers increases (as of Jan. 2017 there have been approx. 2,570,000 switches to other power companies, representing a little over 4% of the total number of contracts), greater choice for consumers in their selection of supplier and pricing plans, more suppliers offering renewable energy sources, and keeping electricity costs at an economical level. On the other hand, barriers to competition will be further eliminated with the liberalization of the gas market commencing in April 2017. This may possibly resulting in an increase in consumer complaints, as was seen in countries which have already undergone liberalization.
In preparation for this next stage of liberalization in Spring this year, the surveillance committee mentioned above has been reformed and renamed the Electricity and Gas Market Surveillance Committee (http://www.emsc.meti.go.jp/english/). The restructured committee has concluded a cooperation agreement with the National Consumer Affairs Center (http://www.kokusen.go.jp/e-hello/news/data/n-20160401_1.html) in order to deal with issues concerning transactions between consumers and suppliers, such as contractual issues, and misleading or deceptive practices.
In the future, various policies and issues will need to be addressed, such as the further strengthening of the OCCTO and the monitoring committee, securing a stable network for electricity generation, establishment of rules for marketing, and activation of power interchange. (by Keiko ONISHI )
Reform of the Japanese Energy Market: Liberalization of the Retail Electricity Market Commences from April 2016, Retail Gas Liberalization Commences From April 2017. See http://www.enecho.meti.go.jp/en/category/electricity_and_gas/electric/electricity_liberalization/
In Japan, liberalization of the electricity/gas markets which operated as local monopolies has been in progress for some time now. These reforms were initiated in response to the aftermath of the Great East Japan Earthquake on March 11, 2011, which led to the shutdown of all nuclear power plants throughout the country.
Liberalization is being implemented in stages, and commenced in 1995 for the gas market, and 2000 for the supply of electricity to corporate customers. Full liberalization was achieved from April 2016 (http://www.enecho.meti.go.jp/en/category/electricity_and_gas/electric/electricity_liberalization/supply/).
In the lead-up to this next stage, 2 organizations have been created. In April 2015, the “Organization for Cross-regional Coordination of Transmission Operators (OCCTO)” (http://www.occto.or.jp/en/index.html)was formed with the aim of securing the stability of the electricity supply and demand, through monitoring of the stability of supply and setting out rules concerning wheeling rates. In September of the same year, the Electric Power Transactions Monitoring Committee was formed to monitor for unfair transactions and to ensure the protection of consumers.
The final stage of the reforms will be implemented by 2020, and requires power plants to legally unbundle the transmission and distribution sectors (Tokyo Electric Power Co completed this stage in April, 2015). It is anticipated that, as the number of new retail suppliers increases (as of Jan. 2017 there have been approx. 2,570,000 switches to other power companies, representing a little over 4% of the total number of contracts), greater choice for consumers in their selection of supplier and pricing plans, more suppliers offering renewable energy sources, and keeping electricity costs at an economical level. On the other hand, barriers to competition will be further eliminated with the liberalization of the gas market commencing in April 2017. This may possibly resulting in an increase in consumer complaints, as was seen in countries which have already undergone liberalization.
In preparation for this next stage of liberalization in Spring this year, the surveillance committee mentioned above has been reformed and renamed the Electricity and Gas Market Surveillance Committee (http://www.emsc.meti.go.jp/english/). The restructured committee has concluded a cooperation agreement with the National Consumer Affairs Center (http://www.kokusen.go.jp/e-hello/news/data/n-20160401_1.html) in order to deal with issues concerning transactions between consumers and suppliers, such as contractual issues, and misleading or deceptive practices.
In the future, various policies and issues will need to be addressed, such as the further strengthening of the OCCTO and the monitoring committee, securing a stable network for electricity generation, establishment of rules for marketing, and activation of power interchange. (by Keiko ONISHI )