Regulation Reform (Second Stage) in the Energy Sector

ABSTRACT

The stagnation of new energy input in Japan is striking compared to other countries, particularly in electricity generation. This is a result of the obligatory input amount being set too low in accordance with the RPS system. The electricity industry, which is being called on to promote free competition, is beginning to compete with other industries such as gas, and shows no desire to introduce electricity generation using new energies beyond the obligatory RPS level.

On the other hand, the input of dispersed power systems such as co-generation facilities which are based on natural gas are expected to steadily grow in electricity generation. Power generation that utilizes new energy, such as wind and solar power, also comes from dispersed electric power plants, and it is necessary to promote the introduction of power plant facilities (including wind and solar power) that are highly efficient and friendly to the environment. There have been no plans, however, to introduce dispersed power in the existing transmission and distribution systems of power companies, and these companies are dragging their feet when it comes to the expansion of new energy utilization and power purchasing.

It is increasingly necessary to consider environmental problems. To maximize the use of new energies in usable areas, there must be modifications of the existing systems as well as institutional change. The introduction of a micro grid system, which effectively utilizes electricity distribution lines, ensures a stable energy source by linking dispersed power systems and burden distribution, and sells power, is expected to play a significant role in the future. It has become necessary to develop institutions that will promote this system.