The Possibility of Japanese Households' Acceptance of Power Outages as an Incentive-Based Demand Response Program for Power System Maintenance

To boost electricity generation from renewable energy (RE) resources, Japan enacted Feed-In-Tariff policy on July 2012 (METI, 2012). In 2013, Japan decided to reform its electricity system, under which the retail electricity market is planned to be fully liberalized by 2020 (METI, 2015a). In 2015, Japan set a goal to increase the total share of renewable energy in 2030 to account for 22% -24% of electricity generation, about 2.5 times bigger than RE share in Japan’s electricity generation in 2011 (METI, 2015b). These efforts strongly indicate a large-scale integration of RE in Japanese power system. However, due to the variability of RE resources, a large deviation of electric frequency or voltage may happen due to an over-generation of renewable power supply. An inadequacy of supply during peak demand may cause unplanned outages. Demand Response (DR) is a considerable approach to alleviate the variability of renewable resources. DR is a demand-side approach defined as changes in electric use by demand-side resources from their normal consumption patterns in response to changes in the price of electricity, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized (Kathan et al., 2012). Because of its capability to provide fast, predictable and reliable response during contingencies, DR can be used as ancillary services including reserve provision through load shifting and peak demand reduction through load curtailing (Aghaei and Alizadeh, 2013). Peak demand reduction can benefit the power system operators in various cost reduction, including operating cost of peaking power plants (Lund et al., 2015). From the consumers’ viewpoint, the DR approach offers the opportunity to obtain benefits in the form of acceptable rebates (Aghaei and Alizadeh, 2013) and more options to buy electricity. The effect of DR in the form of pricing control during peak demand (price-based DR) on the electricity consumption of Japanese residential customers has been studied in Ito et al. (2015). RE resources are low-density, unstable regional resources that are rich in rural areas. To supply RE in large quantities, many supply-plants or huge areas are needed. Inevitably, supply-plants are scattered in many rural areas. Considering the characteristic of the RE resources, decentralized small-scale supply and demand system can be more applicable for RE resources development, as demonstrated in a study of an existing off-grid system in Scotland that effectively harnesses electricity from solar, wind, and hydro in remote areas (Chmiel and Bhattacharyya, 2015). Hence, in planning RE resources development in rural areas, studies on a feasibility of the small-scale system are required from the engineering point of view. This study investigates the level of willingness of Japanese residential electricity customers to participate in incentive-based DR programs in the context of large-scale integration of renewable energy in Japanese power system. This study is a preliminary study on the feasibility of decentralized power grid development in rural areas where many renewable energy resources are found. A questionnaire survey was conducted to achieve this research objective.