The Electric Power
Industry in Japan2023

JEPICJapan Electric Power Information Center, Inc. (JEPIC) was established in 1958 as a non-profit association of
the electric utility industry in Japan. Our primary purpose is to meet the increasing need for a systematicand sustained exchange of information with the electric utility industries around the world.
In response to government policy, JEPIC also initiated technical cooperation programs for developing
countries in the field of electric power soon after our founding. These programs remain one of our main
activities today.
Research and Information Activities
JEPIC conducts research on the electric power industry in foreign countries in light of situations and issues
facing the industry in Japan currently. We provide information from those studies in various ways tocontribute to the industry worldwide. JEPIC also works to enhance cooperation with foreign electricutilities and other related organizations.
International Exchange Activities
JEPIC is promoting information exchanges with the foreign electric utilities and organizations in theelectric utility industry by holding regular meetings, and taking part in international conferences andsymposia.
International Cooperation
With the support of the member companies, JEPIC promotes integrated international cooperation
programs for developing countries, mainly in Asia, for the purpose of improving power infrastructure andnuclear power safety in those countries and sharing of general information. These programs include
human resource development efforts such as seminars that JEPIC coordinates. JEPIC both receives theparticipants of these seminars to Japan and dispatches experts to their countries. Including these seminarprograms, JEPIC carries out the following tasks:• Cooperation with electric utilities in ASEAN countries• Technical cooperation under ODA programs• Technical cooperation for nuclear power safety

Contents
EXECUTIVE SUMMARY

2

I. STRUCTURE OF THE ELECTRIC POWER INDUSTRY

5II. ENERGY AND ENVIRONMENTAL POLICY

10

III. SUPPLY AND DEMAND

26

IV. ELECTRIC POWER FACILITIES

32

V. RETAIL BUSINESS AND TRADING MARKETS

45

TOPICS: Electric Power Company Projects for Promoting Hydrogen 54
Statistical Data

59

Overseas Activities of Member Companies

63

Member Companies Data

78

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The Electric Power Industry in Japan 2023

EXECUTIVE SUMMARY
The information in this document, including the Executive Summary, was current as of September 6, 2022, unless otherwise specified.

Japan’s Sixth Strategic Energy Plan, approved by the Cabinet in October 2021, lays out a path for achievingcarbon neutrality in 2050 and the earlier goal of reducing greenhouse gas emissions in 2030 by 46% versus
2013. It also sets forth the core principle of “S+3E” for guiding all actions for overcoming the challenges inJapan’s energy supply/demand structure. This principle makes safety the fundamental premise for thoseactions, places top priority on realizing energy security, and calls for a balance between economic efficiency
and environmental consciousness.
The Japanese government has also been working on formulating a “Clean Energy Strategy” for linking global
warming measures with growth. In May 2022, it released an interim report outlining the key concepts forthis endeavor: maximum utilization of pro-growth carbon pricing, and utilization of investment promotion
measures based on a combination of regulation and support, including a roadmap for improving investment
predictability. While the Strategic Energy Plan had stated that Japan would “reduce the dependence on
nuclear power as much as possible,” the Basic Policy on Economic and Fiscal Management and Reform 2022,
issued in June 2022, calls for efforts to strengthen energy security by thoroughly improving energy efficiency
and by making “maximum use” of energy sources such as renewable energy and nuclear power. In July, the
GX (Green Transformation) Implementation Council was launched to develop economic, social, and industrial
structural reforms for maintaining energy security and achieving decarbonization. Speaking at the inaugural
meeting, Prime Minister Fumio Kishida, the Council’s chair, noted that Japan faced an extremely tense energy
situation that was driven in large part by disruptions and soaring prices in global energy markets, and thatrisked becoming the country’s first energy crisis since the 1973 oil crisis. He also instructed the members toclearly identify matters requiring political decisions to support the stable supply of electricity and gas. The
second meeting, convened in August, unveiled a policy to resume operation of 17 nuclear power reactors
starting in the summer of 2023, and laid out various issues that need to be resolved, including extension of
the operating lives and development and construction of innovative next-generation reactors. The Council
also recognized that destabilizing factors for the economy grow with increased dependence on fossil fuels,and put forth a recommendation to study the development of next-generation nuclear power plants as one
step for realizing the stable supply of electricity and the 2050 carbon neutrality goal.

I. STRUCTURE OF THE ELECTRIC POWER INDUSTRY
Liberalization of entry to the power generation sector commenced in 1995 at a time when generation andtransmission were integrated along regional lines under 10 general electric utilities. Liberalization of theretail supply of electricity to all except low-voltage customers was then implemented in stages between
2000 and 2005.
Policy on reform of the electricity system was adopted in April 2013, and liberalization of the electric power
retailing and generation sectors was completed in April 2016. The legal separation of transmission anddistribution from vertically integrated businesses was implemented in April 2020, resulting in the spin-off of
new transmission and distribution companies from the former general electricity utilities. Meanwhile, plans
to abolish regulated electricity rates in April 2020 have been deferred.
Today, Japan’s electrical power industry comprises three major sectors: electricity generation, transmission
and distribution, and retailing. The number of operators in these sectors was 1,038 (as of April 15, 2022), 35(February 4), and 738 (July 1), respectively.

2

E XECUTIVE SUMMARY

II. ENERGY AND ENVIRONMENTAL POLICYThe Prime Minister announced in October 2020 the goal of making Japan carbon neutral by 2050. In April
2021, the Prime Minister also declared that Japan would seek to reduce its greenhouse gas emissions by 46
percent in fiscal 2030 from its fiscal 2013 levels, and would thereafter further strive toward 50%. To lay out thepath to realizing these goals, the Cabinet issued a draft of the Sixth Strategic Energy Plan in July 2021, andthen approved the plan in October.
International developments surrounding the crisis in Ukraine have brought into relief the risks posed bydependence on a single country for the supply of fossil fuels and resources. Resource-poor Japan has cometo recognize the importance of putting together a well-balanced electric power portfolio.
Prior to the March 2011 Fukushima Daiichi Nuclear Power Plant accident, Japan had 57 nuclear reactors inoperation. All were provisionally shut down in 2014. Currently, 24 have been selected for decommissioning,and 10 of the remaining 36 (including three under construction) are back in operation.
Installed capacity of renewables (especially solar) began increasing in 2012 as the result of a feed-in tariff(FIT) scheme. In April 2022, the government launched a feed-in premium scheme that adds premiums to
the market prices of power sources such as large-scale commercial solar and wind power, with the aim of
firmly establishing renewables as the main source of electricity.
The government has positioned offshore wind power, which can be introduced on a large scale atcomparatively lower cost, as the trump card for making renewables the main source of electric power, andhas accordingly set forth long-term installation targets and actions for attaining them.
In fiscal 2020, Japan’s GHG emissions measured 1,150 million tons (CO2 equivalent), and emissions of CO2
accounted for 90.8% of this total, down 20.8% from the fiscal 2013 level.

III. SUPPLY AND DEMAND
In fiscal 2021, electricity demand1 in Japan was 881.6 TWh (up 2.2% YoY) and the peak load 3-day averagecame to 162.3 GW (up 1.9% YoY).
In fiscal 2021, electric power generated2 in Japan came to 863.5 TWh (up 2.1% YoY), of which 19.0 TWh was
generated by solar power and 7.4 TWh by wind power.
The lackluster trading prices in the electric power market in recent years have weakened the power
generation business. There is concern that a one-in-ten-year weather event could reduce power reserves
below the 3% margin in some service areas.
Electricity supply was strained in the early half of 2022 by abnormal weather events that occurred outside
the summer and winter peak demand periods. Unseasonal cold and heat waves prompted the government
to issue an electricity supply warning in March and an advisory in June.

1 Total of utilities’ net system energy demand, specified service demand, and self-consumption demand.
2 Electric power generated by electricity utilities.

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The Electric Power Industry in Japan 2023

IV. ELECTRIC POWER FACILITIES  Total generating capacity in Japan came to 314.7 GW at the end of fiscal 2021. This consisted of 49.4%
thermal power (15.4% coal, 24.8% LNG, and 9.2% oil), 10.5% nuclear power, 15.6% hydro, and 24.2%
renewables (excluding hydro). Development of 20.6 GW of generating capacity is planned to be completed
by fiscal 2031. This portion made up by new power plants to be constructed and planned changes incapacity of existing plants, excluding planned decommissioning, consists of 0.2 GW of thermal power, 9.6
GW of renewables (excluding hydro), and 10.3 GW of nuclear power.
In response to the increased intensity of natural disasters in recent years, the Japanese government enacted
the Act for Establishing Energy Supply Resilience in June 2020, and is leading efforts to improve theresilience of Japan’s energy supply.
Plans have been laid out for the enhancement of interregional interconnections in order to improve theresilience of electricity infrastructure and realize interregional utilization of distributed energy sources.
The Organization for Cross-regional Coordination of Transmission Operators (OCCTO) is working to complete
the formulation of the Cross-regional Network Long-term Policy by March 2023 as a master plan forstrengthening the domestic grid.

V. RETAIL BUSINESS AND TRADING MARKETSThe number of registered electricity retailers has continued to rise since the full liberalization of the retailelectricity market in April 2016, reaching 738 retailers as of July 2022. As of March 2022, PPSs accounted for a
21.3% share of the total volume of electricity sold.
The volume of trades on the JEPX spot market in fiscal 2021 was 327.2 TWh (equivalent to more than 30% of
all electric power sold nationwide). As of July 2022, the average system price for fiscal 2022 was 19.62 yen/kWh, and is continuing to trend upward.
  In the baseload trading market, a total volume of 748.1 MW was sold for delivery in fiscal 2022, with clearing
prices ranging from 9.47 to 15.69 yen/kWh.
  Following a radical change in the capacity market’s pricing system, contracts for delivery in 2025 amounted
to a total volume of 165.3 GW. As a step for expanding the use of decarbonized power sources, a long-term
decarbonized energy auction is scheduled to be held in fiscal 2023.
A balancing market began operating in April 2021 for Replacement Reserve for FIT (balancing capacity witha long response time that balances errors in renewable energy predictions). There are plans to successively
add other products traded in this market.
In November 2021, the non-fossil value trading market launched in 2018 was divided into two markets:a renewable energy value trading market dealing in FIT renewable energy certificates, and a market forachieving the target mandated by the Sophisticated Methods Act, which deals in non-FIT renewable energy
certificates and is aimed at achieving the target for non-fossil fuel power source representation in thewholesale electricity market.

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I. S T R U C T U R E O F T H E E L E C T R I C P O W E R I N D U S T R Y

I. STRUCTURE OF THE ELECTRIC POWER INDUSTRY

1. H
 istory of Electric Power Industry
in Japan1970s, they lowered rates several times between the 1980s
and 2000s, successfully providing the power that supported
the development of Japan’s economy.

(1) Establishment of a System Comprising
10 Electric Utilities(2) Beginning of Liberalization of the Electricity
MarketJapan’s electric power industry came into being in 1886 withthe commencement of operations by the Tokyo ElectricLight Company, which was formed with private capital.
Numerous electric utilities were subsequently establishedaround Japan to serve growing demand for electricity driven
by increasing industrialization. By the early 1930s there
were more than 800 utilities. However, fierce rate reduction
competition engendered by the prolonged depression led
to a series of mergers and acquisitions, and Japan’s electric
power industry ultimately developed into an oligopoly of
five utilities.

Following the trend toward deregulation in the electric
power industry in Western countries, the liberalization ofentry into the electricity generation sector started in 1995 in
Japan, followed by retail supply liberalization for customers
receiving extra-high voltage (20 kV or above) in 2000. The
scope of deregulation was expanded further in stages
thereafter: to high voltage (6 kV) customers with contracted
demand of 500 kW or above, in principle, in April 2004, andto all customers in the high voltage category (those with acontracted demand of 50 kW or above) in April 2005.

As Japan headed into World War II, the electric utilities
came under the control of the government. In 1939, thegovernment established the Japan Electric Generation
and Transmission Company, electricity generation andtransmission facilities came under centralized control. The
government also consolidated the electricity distribution
business into nine separate regional blocks. Following
World War II, the Japan Electric Generation and Transmission
Company was dissolved in May 1951, the company’s
facilities and functions were transferred to nine privatelyowned electricity distribution utilities. As a result, a regimeof regional monopolies was established based on integrated
systems of electricity generation and transmission in nine
regions. The number of utilities then increased to 10 withthe establishment of Okinawa Electric Power Co. following
the reversion of Okinawa to Japanese control in 1972.
These electric utilities made focused investments in power
supply facilities to meet a growing demand for electricity
driven by Japan’s rapid economic growth. As private
enterprises, they simultaneously sought to deliver affordable,
stable supplies of electricity while emphasizing the interestsof shareholders. As a result, they contributed significantly
to Japan’s nearly 20-year period of rapid economic growthby providing high-quality, affordable electricity with aminimum of outages. Although these utilities introduced
electricity rate hikes in the wake of the global oil crises of the

However, power shortages and other issues caused by the2011 Great East Japan Earthquake prompted discussion of theideal configuration of the nation’s electric power system andits reform. Based on this discussion, reform of the electricity
supply system has been pursued in three stages since 2015.

(3) Electricity System Reform
The Policy on Electricity System Reform describing theoverall shape of reform was approved by the Cabinet in
April 2013. This policy divided the reform process into threephases: (1) establishment by 2015 of an Organization for
Cross-regional Coordination of Transmission Operators(OCCTO) to act as a command center responsible formanaging supply and demand spanning different service
areas; (2) full liberalization of entry into the retail electricity
market by 2016; and (3) the legal unbundling of thetransmission and distribution sector, and elimination ofregulated retail rates by 2020.
Based on this policy, a new entity called the Organization
for Cross-regional Coordination of Transmission Operators(OCCTO) was established in April 2015 with the aim ofenhancing the capacity to adjust supply and demandnationwide in both normal and emergency situations.
In preparation for the second phase of liberalization of
the retail market, another entity, the Electricity Market
Surveillance Commission (now called the Electricity and
Gas Market Surveillance Commission) was established in

5The Electric Power Industry in Japan 2023

Roadmap to Electricity System Reform

Implementation: April 2013

[Phase I][Phase 2][Phase 3](Establishment of the OCCTO)(Deregulation of entry into
retail electricity market)(Ensuring neutrality in transmission anddistribution; Deregulation of electricity rates)

Implementation: April 2015

Implementation: April 2016

Implementation: April 2020

Approval of establishment

Preparation for establishmentof the OCCTO

Determination of policy on electricity system reform

Figure 1 . 1

1) Formulation of plans for cross-regional supply and demand

Establishment of
the OCCTO

2) Formulation of plans for improvement of interconnected lines and cross-regional transmission lines
3) Cross-regional supply and demand/grid operation4) Supply and demand adjustment in times of supply shortages

Full deregulation ofretail sales
Preparation of environment for full deregulationof retail sales(liberalization of entry into
retail electricity market)

Customer freedom to select electric utilities and supplier freedom
to set electricity rates extended to small-customer sector(including households)
Period of transitional
measures foreliminating rate
regulations

Elimination of Establishment of
requisite systems forrate regulations customer protection(end of transitional
measures)(last-resort service,universal service, etc.)

Review of competition conditions

Detailed system design

Transition to
new regulatory
systemVitalization of wholesale electric power market

Preparation for creation of new system forsecuring supply capacity

Preparation for hour-ahead market

1) Regulation of transmission and distribution (wheeling service fees, conduct of business, etc.)
2) Wholesale/retail market transaction monitoring, competition condition review, and rule development3) Operations related to stable electric power supply, including issuance of supply orders andimplementation of appropriate rolling blackouts in emergencies
Market monitoring

Elimination of regulations
on wholesale market

Conducting acapacity market main
auction (2020)

Creation of new system
for securing supply
capacity

1) Obligation tosecure supply capacity
2) Establishment of capacity market for future supply capacitytransactions
3) System for power source procurement bidding in anticipation of
future shortages

Creation of hour-aheadmarketMarket-based cross-regional supply and demand adjustment

Review, development and issuance of rules as preconditions for improving neutrality in transmission anddistribution operations Verification and implementation of means of securing power supply stability,
including disaster response measures, cooperation on transmission and distribution facility maintenanceand operation, and supply securement
Preparation for system transition

Gradual creation ofbalancing market(from April 2021)

Legal separationof transmission
and distribution
from the verticallyintegrated business

Regulation oftransmission anddistribution andmonitoring of neutrality
assurances

Realization ofcompetitive market
environment

Source: Compiled from the Report of the Expert Committee on Electricity Systems Reform (February 2013)

September 2015 to strengthen oversight of the liberalized
electric power market. A licensing system was then launchedin April 2016, liberalization of the electric power retailing andgeneration sectors was completed. In the third phase, legal
unbundling of the transmission and distribution sector was
implemented in April 2020, and new spin-off transmission
and distribution companies were established by eight former

6

general electricity utilities other than Tokyo Electric Power
Company Holdings, which was ahead on setting up newcompanies, and Okinawa Electric Co., which was not subject
to legal unbundling. Meanwhile, plans to abolish regulated
electricity rates scheduled for the end of March 2020 havebeen deferred due to insufficient competition (see Figure 1.1
and “1. Electricity Rates” in Section 1, Chapter V).

I. S T R U C T U R E O F T H E E L E C T R I C P O W E R I N D U S T R Y

The necessary legal groundwork for the third phaseof electricity system reform was completed with theenactment of revisions to the Electricity Business Act inNovember 2013, June 2014, and June 2015.

(4) Updated System Design
The Ministry of Economy, Trade and Industry (METI)
emphasized the need to increase economic efficiency byfostering further competition in the electric power sector,
while addressing a number of issues that could not be
resolved solely by relying on the market alone. These issues
include ensuring safety, supply stability, and implementationof climate change measures, including promotion ofrenewable energies. METI also indicated that in order tosolve these issues, steps should be taken to make existing
markets more liquid and to actualize new forms of value by
creating completely new markets, such as a capacity market
and a non-fossil value trading market.
Based on these guidelines, a number of new types of market
have been considered, including (1) a baseload power market,(2) a capacity market, (3) a balancing market, and (4) a nonfossil value trading market. Trading is underway in markets(1), (2), and (4). Trading in certain products commenced in (3)in April 2021 and April 2022, and will be gradually expanded
to other products. Market (4) was split into two markets infiscal 2021, a market for achieving the target mandated by theSophisticated Methods Act, and a renewable energy value
trading market. A special auction, the long-term decarbonizedenergy auction, is being considered for adoption in (2) (see“Trading Markets” in Section 3, Chapter V).

2. Current Electricity Supply System(1) Classification of Electricity Utilities
Japan’s electricity utilities had been divided into the following
five categories: general electricity utilities, wholesale electricity
utilities, wholesale suppliers, specified electricity utilities, andpower producer and suppliers (PPSs). Subsequently, with theimplementation of full liberalization of the retail market, theseclassifications were reviewed and a new system of issuinglicenses to business operators was introduced in April 2016. At
present, the licenses define three main categories of electricity
generation, transmission and distribution, and retailing. METI’s
Agency for Natural Resources and Energy imposes necessary
regulations for each sector. The 10 general electricity utilities
that have historically been engaged in power supply since1951 are now called “former general electricity utilities” (seeFigures 1. 2 and 1. 3).
Data show that 1,038 entities had obtained power
generation licenses in the electricity generation sector as ofApril 15, 2022, and generating capacity was 269 GW1 as ofMarch 2022. The group of former general electricity utilities,
J-Power, and the Japan Atomic Power Co. accounted for
80% of generating capacity. In addition, power generation
licenses have been obtained by firms from industries suchas paper manufacturing, steel manufacturing, and gas andpetroleum, as well as by some local governments. As a resultof a partial revision of the Electricity Business Act in May
2022, large storage batteries are now regarded as a power
generation business.
In the transmission and distribution sector, a total of 10
utilities (the 9 utilities spun out from the former generalelectricity utilities other than Okinawa Electric Co., andOkinawa Electric Co.) have been conducting business as
general electricity transmission and distribution utilities.
Three other companies, including J-POWER Transmission
Network Co., Ltd., are conducting business as electricity
transmission utilities. In addition, 35 corporations (as ofFebruary 4, 2022), including Sumitomo Joint Electric Power
Co., Ltd., are operating as specified electricity transmission
and distribution utilities.
In the electricity retail sector, data released by Agency for
Natural Resources and Energy show that a total of 738
entities had obtained retail licenses (as of July 1, 2022).
In addition to the former general electricity utilities,
electricity retailers include telecommunications carriers,
trading companies, gas and petroleum companies, steel
manufacturers, and subsidiaries of former general electricity
utilities. Net system energy demand in fiscal 2021 cameto 881 TWh, of which former general electricity utilities
accounted for about 75%.
Amidst the spread of distributed energy resources (DER),
the Electricity Business Act was partially revised by the
Act for Establishing Energy Supply Resilience enacted inJune 2020. The revisions included licensing provisions
regarding the (1) specified wholesale supply business andthe (2) electricity distribution business, effective from April
2022. Also known as aggregators, (1) licensees aggregate
and adjust the electricity of many DER, including throughdemand response, and supply the electricity to electricity
retailers and other buyers. According to data released by the1 Figure represents the total of electricity utilities’ generating capacity, and excludes that of non-electricity utilities.

7

The Electric Power Industry in Japan 2023

Electricity Supply System after Introduction of Licensing

Figure 1 . 2

A. Electricity generation business[notification only]

D. Specified wholesale supply business[notification only] *Commencing in April 2022

JERA, The Kansai Electric Power
Company, J-POWER, JFE Steel,
local governments, etc.
(1,038 entities)TEPCO Energy Partner, The Kansai ElectricPower Company, Tokyo Gas, NTT AnodeEnergy, ENEOS , etc. (32 entities)
Aggregation

B. Electricity transmission anddistribution business ( (1)-(4) )(4) Specified electricity transmission
and distribution business[notification only](1) General electricity transmission anddistribution business [license required]
TEPCO Power Grid, Kansai Transmission
and Distribution, etc. (10 companies)

System of general electricity transmission
and distribution utilities(3) Electricity distribution
business [license required]

SUMITOMO JOINT ELECTRIC
POWER, JR East, etc. (35 entities)*Commencing in April 2022

(2) Electricity transmission business[license required]

Grid operated byelectricity distributor

J-POWER Transmission Network Co., Ltd.,North Hokkaido Wind Energy Transmission,etc. (3 companies)

Specified supply area

C. Retail electricity business[registration required]
TEPCO Energy Partner,
The Kansai Electric Power Company, ENNET,
Tokyo Gas, KDDI, etc. (738 entities)

Homes, businesses, stores, etc.

Utilities maintaining and operating electricity transmission and distribution facilities
General electricity transmission
Electricity transmission utilities
and distribution utilities

Electricity distribution utilities

Specified service points
distinguished fromgeneral demand.

Specified electricity transmission
and distribution utilities

Source: Compiled from Agency for Natural Resources and Energy, “(Reference) Electricity Power Supply Structure (from April 2016)”

Agency for Natural Resources and Energy, 32 entities wereoperating as (1) licensees as of July 8, 2022. (2) licenseesbalance electricity supply and demand by matching
local renewables and power consumers, and engage inother distribution operations in a specified area, using the
distribution grid of a general electricity transmission anddistribution utility. As of July 8, 2022, no entities had been
licensed for (2). (For more information on (2), see section 2-5,

With regard to the electric power industry, the agency
is responsible for developing the electricity market andelectricity sources, adjusting electricity market supply anddemand, and planning, devising, and promoting policies
relating to nuclear power, renewables and smart communities
to ensure a stable and efficient supply of electricity. The
agency is given the role of supervising electric utilities.

“Efforts to Improve Resilience and Increase Use of Renewables inb. Electricity and Gas Market Surveillance Commission

Power Transmission and Distribution Sector,” in Chapter IV.)

The Electricity and Gas Market Surveillance Commission
was established in September 2015—as a separate
entity from the Agency for Natural Resources and Energy
directly reporting to the Minister of Economy, Trade andIndustry—in advance of the liberalization of electricity, gas,and heating supply, with the aim of further strengthening
monitoring of the energy markets and related functions
and encouraging sound competition. The Commission’s(2) Regulatory Organizations
a. Agency for Natural Resources and Energy

The Agency for Natural Resources and Energy is an externalorgan of METI. It is responsible for policies regarding energy
conservation, new energies, and securing a stable, efficient
supply of energy from oil, electricity, gas, and other sources.

8

I. S T R U C T U R E O F T H E E L E C T R I C P O W E R I N D U S T R Y

General Electricity Transmission and Distribution Utilities Spun Off
from Former General Electricity Utilities following Legal Unbundling (after April 1, 2020)

Figure 1 . 3

Former general electricity utilities

General electricity transmission and distribution utilities• Hokkaido Electric Co.

• Hokkaido Electric Power Network, Inc.

• Hokkaido Electric Power Co. (generation & retail)• Tohoku Electric Co.

• Tohoku Electric Power Network, Co.

• Tokyo Electric Power Co.

• TEPCO Power Grid, Inc.*2• Chubu Electric Power Co.

• Chubu Electric Power Grid Co.

• Hokuriku Electric Power Co.

• Hokuriku Electric Power Transmission & Distribution Co.

• Tohoku Electric Power Co. (generation & retail)• Tokyo Electric Power Company Holdings, Inc.,JERA*3, TEPCO Renewable Power, Inc. (generation),
TEPCO Energy Partner, Inc. (retail)*2• Chubu Electric Power Co., JERA (generation),
Chubu Electric Power Miraiz Co. (retail)• Hokuriku Electric Power Co. (generation & retail)• Kansai Electric Power Co.

• Kansai Transmission and Distribution, Inc.

• Kansai Electric Power Co. (generation & retail)• Chugoku Electric Power Co.

• Chugoku Electric Power Transmission & Distribution Co.

• Chugoku Electric Power Co. (generation & retail)• Shikoku Electric Power Co.

• Shikoku Electric Power Transmission & Distribution Co.

• Shikoku Electric Power Co. (generation & retail)• Kyushu Electric Power Co.

• Kyushu Electric Power Transmission and Distribution Co.

• Kyushu Electric Power Co. (generation & retail)• Okinawa Electric Power Co.

• Okinawa Electric Power Co.

• Okinawa Electric Power Co. (generation & retail)*1 Only major utilities are listed.
*2 TEPCO Power Grid, Inc. and TEPCO Energy Partner, Inc. were spun out in April 2016.

powers include the ability to collect reports, conduct on-site
inspections of utilities, recommend business improvements,
act as an arbitrator/mediator, approve wheeling service
charges, and carry out reviews of retailer registrations. It also
has the power to monitor the fairness of transactions andregulate business conduct to safeguard the neutrality of theelectricity and gas network sectors.

(3) Organization for Cross-regional Coordination ofTransmission Operators (OCCTO)
OCCTO was established in April 2015 as a governmentauthorized organization that all electricity utilities are
required to join. Its objectives are to promote developmentof the transmission and distribution networks required
to make cross-regional use of generating sources, andto strengthen the industry’s capacity to adjust supply
and demand nationwide in both normal and emergency
situations. OCCTO is operated as a public organization
authorized under the Electricity Business Act.
OCCTO’s main functions include:
Securing stable electricity supply on short-, medium-, andlong-term basis• Collect all supply plans and use this information to
perform centralized evaluation of supply-demandbalance nationwide• Study, design in detail, and run the capacity market, andstudy and design in detail the balancing market• Formulate cross-regional network long-term policy andElectricity generation utilities and retailers*3 JERA took over the thermal power generation business of TEPCO and Chubu ElectricPower in April 2019.

development plans
Promoting the fair, equitable, and efficient use of electricity
transmission and distribution facilities• Formulate/revise guidelines on implementation oftransmission/distribution businesses• Review the methods of interconnection line use• Accept system impact studies of generation facilities• Take action to facilitate network use and lower the cost
• Study new rules for network use
Monitoring nationwide conditions of supply-demand andnetwork operation• Monitor supply-demand and network operation
conditions 24 hours a day, 365 days a year
• Track nationwide supply-demand balance by managing
the annual, monthly, weekly and day-ahead plans• Instruct electricity companies to transmit or receive power
when their supply-demand balance becomes unstable• Provide training for dealing with supply shortages
New functions added by the Act for Establishing Energy
Supply Resilience (enacted in June 2020)• Check the content of disaster response coordination plans• Operate a mutual assistance system for disaster recovery costs• Formulate cross-regional network development plans andsubmit them to the government• Grant subsidies related to the feed-in tariff (FIT) scheme
for renewable energy and grant premiums related to thefeed-in premium (FIP) scheme• Manage the reserve fund for the disposition of solar
panels and other hardware components

9The Electric Power Industry in Japan 2023

II. ENERGY AND ENVIRONMENTAL POLICY

1. Strategic Energy Plan
In October 2020, the Japanese government announced its
goal of making Japan carbon neutral by 2050, and unveiled
the “Green Growth Strategy Through Achieving Carbon
Neutrality in 2050” in the following December. This strategy
defines challenges and action timetables for 14 promising
fields that are expected to grow, and calls for further
innovation toward decarbonizing the electric power sector,
advancing electrification and the use of hydrogen for heatingin the industrial, transport, office, and household sectors, andcapturing carbon dioxide.
In April 2021, the government declared that it would seek
to reduce greenhouse gas emissions in fiscal 2030 by
46% from the level in fiscal 2013, and thereafter further
strive toward 50%. To lay out the path to realizing thesegoals, the government issued a draft of the Sixth Strategic
Energy Plan in July 2021, and the Cabinet approved it in
the following October. The basic concept of the Plan is toachieve “S+3E”—namely, striving for energy security in way
that gives top priority to safety and balances both economic
efficiency and environmental protection.
The Plan maps out the challenges and actions for achievingcarbon neutrality in 2050, as well as government policy
measures to be implemented towards 2030 based on thosechallenges and actions.
Following the Cabinet’s approval of the Plan, the government
began formulating a “Clean Energy Strategy” for linking global
warming measures with growth. In May 2022, it released
an interim report outlining the strategy’s key concepts:
maximum utilization of pro-growth carbon pricing, andutilization of investment promotion measures based on a
combination of regulation and support, including a roadmap
for improving investment predictability.
In the following July, the GX (Green Transformation)
Implementation Council was launched to create a ten-yearroadmap for implementing economic, social, and industrial
structural reforms needed to maintain energy security andachieve decarbonization. Speaking at the inaugural meeting,Prime Minister Fumio Kishida, the Council’s chair, noted that

10

Japan faced an extremely tense energy situation that was
driven in large part by disruptions and soaring prices in global
energy markets, and that risked becoming the country’s
first energy crisis since the 1973 oil crisis. He also instructed
the members to clearly identify matters requiring politicaldecisions to support the stable supply of electricity and gas.
The second meeting, convened in August, unveiled a policy
to resume operation of 17 nuclear power reactors starting inthe summer of 2023, and laid out various issues that need tobe resolved, including the possible extension of the reactors’
legally mandated operating lives, which is currently set at 40
years in principle and up to 60 years maximum. The Council
also recognized that destabilizing factors for the economy
grow with increased dependence on fossil fuels, and put forth a
recommendation to study the development of next-generation
nuclear power plants as one step for realizing the stable supplyof electricity and the 2050 carbon neutrality goal.

(1) Challenges and Actions for Achieving Carbon
Neutrality in 2050
The Plan emphasizes the importance of securing a stable
and affordable supply of energy while giving top priority toensuring safety. Working from this premise, it calls for steady
implementation of decarbonization efforts for achieving thegoal of carbon neutrality in 2050, using currently practical
decarbonized electric power sources. It also advocatesmaximizing the adoption of renewable energy, under the
principle of giving top priority to shifting to renewables as
the main energy source. At the same time, it looks beyond
currently practical decarbonization technologies to pursue
new options that need to be innovated, such as hydrogen/ammonia power generation, or thermal power generation
founded on carbon storage and reuse through CCUS (see “(2)Future Plans” in Section 1, Chapter IV).

(2) Policy Measures towards 2030
According to the Plan’s outlook for energy supply anddemand in fiscal 2030, electricity demand will be contained
at 864 TWh despite anticipated economic growthby pursuing thoroughgoing energy (electric power)
conservation efforts. Regarding the power generation
mix, the Plan aims to realize a well-balanced mix thatenables simultaneous achievement of the S+3E by making
renewables the main power source, restarting nuclear
power plants with top priority placed on safety, andII. E N E R G Y A N D E N V I R O N M E N TA L P O L I C Y

reducing dependence on thermal power generation as
much as possible. Specifically, the energy mix (in terms ofelectric power generated) in fiscal 2030 will be raised theshare of renewables from the previous Plan’s target of 22%–
24% to 36%–38% (the actual level in fiscal 2019 was 18%),
while nuclear power’s contribution will be kept at 20%–22%.
The share of thermal power will be minimized as muchas possible by steadily phasing out inefficient coal-fired
generation, while retaining the installed capacity needed toprovide a supply capacity capable of countering momentaryor sustained drops in electricity generation from renewables.
Specifically, the Plan aims to reduce dependence on LNG
and coal from 37% and 32% in 2019 to 20% and 19% (seeFigure 2.1).

Power Generation Mix in Fiscal 2030

Total power generation
approx. 1,024 TWh

Non-fossil
24%

Total power generation
approx. 934 TWh

Renewableenergy18%
Nuclear 6%

Hydrogen &ammonia1%

Non-fossil
59%

LNG
37%

In June 2022, the Cabinet approved the Basic Policy on
Economic and Fiscal Management and Reform 2022.
This policy entails, among other actions, accelerating
decarbonization efforts and increasing Japan’s energy selfsufficiency, under the key premise that the stable supplyof affordable energy be secured amid the energy market
effects of the Russian invasion of Ukraine. To achieve theseaims, Japan will pursue thorough energy conservation
measures and make maximum use of renewables, nuclear
power, and other energy sources that contribute to energy
security and have a high decarbonizing effect. At the sametime, Japan will strive to reduce its dependence on Russia
and prevent disruption of its energy supply by diversifying
suppliers, working with other major energy consumers toencourage producers to ramp up production, and taking
action to reduce energy consumption. The policy also
recommends strengthening Japan’s fuel supply systemthrough measures such as increasing the government’s
involvement in LNG procurement.
During the Group of Seven summit in June 2022, Japanjoined with the United States, Canada, and the European

Coal
32%

Renewableenergy36%–38%

Nuclear20–22%

Fossil76%(3) Strengthening Energy Security
International developments surrounding the crisis in Ukraine
have brought into relief the risks posed by dependence ona single country for the supply of fossil fuels and resources.
It is imperative for Japan, as a resource-poor country, to
put together a well-balanced electric power portfolio thattakes into account the characteristics of each type of fuel.
Moreover, given that the stable supply of energy is thefoundation for many different economic and social activities,
carbon neutrality cannot be achieved without energy
security.

Figure 2 . 1

LNG
20%
Fossil
41%

Coal
19%

Oil, etc. 7%

FY2019

Breakdown ofrenewables
Solar 14-16%
Wind 5%
Geothermal 1%
Hydro 11%
Biomass 5%

Oil, etc. 2%

FY2030Source: METI, “Energy Supply and Demand Outlook for FY2030” (2021)

members in voting for a ban on imports of Russian coal andoil. Russia accounted for 11% and 4% of Japan’s coal and oil
imports, respectively, in 2020. Approximately 9% of Japan’s
LNG imports are supplied by Russia, mostly the Sakhalin-2 oiland natural gas project in the Russian Far East. The Russianmajority state-owned Gazprom owns slightly over 50% of
the shares in the new company operating the project, withremainder held by the Russian government. Previously, theUK-based major oil and gas company Shell plc had owned
a 27.5% stake in Sakhalin-2, but announced in February
2022 its intention to withdraw from the project. While theJapanese government had decided to ban oil and coal
imports from Russia, in August it called on two Japanesetrading companies, Mitsui & Co., Ltd. and Mitsubishi
Corporation, to maintain their investments in Sakhalin-2 forthe sake of energy security. In response, both companies
decided to invest in the project’s new operating company.
Also, of the eight Japanese companies that had been
dealing with Sakhalin-2, the following four decided to renew
their contracts through the new operator: JERA, Kyushu
Electric Power Co., Tokyo Gas, and Hiroshima Gas.

11

The Electric Power Industry in Japan 2023

2. Nuclear Power Generation(1) Action on Nuclear Safety
a. Establishment of the Nuclear Regulation Authority

The March 2011 accident at the Fukushima Daiichi
Nuclear Power Plant led to an overhaul of the system ofadministration of nuclear power in order to separate safety
regulation from its use and to unify nuclear safety regulation
work. The Nuclear Regulation Authority (NRA), comprisinga chairman and four commissioners, was established in
September 2012 as an affiliated agency of the Ministry of
the Environment. As a result of this change, the resumptionof a nuclear power plant’s operation is predicated on theacquisition of licensing through a safety review performedin accordance with the NRA’s New Regulatory Requirements(described below), and on the local governments’ consents(not a legal requirement).
b. New Regulatory Requirements

The Act on the Regulation of Nuclear Source Material,
Nuclear Fuel Material and Reactors (Nuclear Reactors
Regulation Act) was revised following the Fukushima Daiichi
accident. The main revisions are as follows.

• Thorough reinforcement of regulatory standards fornuclear facilities to include measures against severe
accidents (see Figure 2.2).
• Requirement for bringing existing nuclear power facilities
into conformance with new standards informed by thelatest insights (introduction of a backfitting program).
• Setting the period of operation of electricity-generating
nuclear reactors at 40 years. Also, limiting the extension of thisterm to one time only and a length not to exceed 20 years.
• Integration of nuclear power safety regulations with the
Nuclear Reactors Regulation Act (separation from theElectricity Business Act).
The NRA verifies whether the installation, operation, etc.
of electricity-generating nuclear reactors conform to the
New Regulatory Requirements through the following
3-tier regulatory review process. Tier 1 grants permission
for changes in reactor installation; Tier 2 approves theconstruction plan and requires preservice inspections; andTier 3 approves the operational safety program and requires
the passing of pre-service inspections.
c. Initiatives by the Private Sector

Alongside the measures being taken by the regulatory

Safety Measures Required by New Regulatory Requirements
Establishment of emergency
response center
Measures against
deliberate plane crashes

Securing of electricity
supply capabilities

Figure 2 . 2

Strengthening of offsite
power supply
Securing of water supply capabilities
Measures against
natural disasters

Measures against flooding:door replacement for water-tightness
Measures against tsunami:
strengthening of seawalls

Securing of alternative
water injection capabilities

Installation offilter vents
Subsurface structure survey(over 1,000 m deep)
Measures against fire:
installation of earthquake-resistant firefighting equipment
Measures against tsunami: deeper pump inlets
Installation of bulkheads in reactor auxiliary seawater pump area
Source: Federation of Electric Power Companies of Japan (FEPC), “Energy and Environment” (2018)12

II. E N E R G Y A N D E N V I R O N M E N TA L P O L I C YCurrent State of Nuclear Plant Reviews and Restarts

Tier 1 review
completed(change ininstallation
license granted)(17 units)

Table 2.1

Restarted

10 units

Pending completion of Tier 2 and 3 reviews (construction
approval, safety regulations, pre-service inspections), andconsents of local communities

10 units

Applications not yet filed (including 1 unit under construction)

9 units

Total (including 3 units under construction)

36 units

To be decommissioned

24 units

agencies, in November 2012 the nuclear power industry,
seeking to prevent the occurrence of accidents like the
Fukushima Daiichi accident, launched the Japan Nuclear
Safety Institute (JANSI) as an organization for encouraging
nuclear power plant operators to voluntarily strive for safety
excellence. JANSI advances efforts to ensure a higher levelof safety at each power plant through approaches that go
beyond the regulatory framework. In order to firmly implant
this initiative, the nuclear power industry also establishedthe Atomic Energy Association (ATENA) in July 2018 as anorganization whose role is to draft effective safety measuresby leveraging insights and resources across the industry andby engaging in dialogue with regulatory authorities. JANSI
and ATENA are working together to encourage nuclear
power plant operators to introduce more effective safetymeasures, with the goal of raising the safety standards ofnuclear power plants.

Feb. 26, 2016

KansaiTakahama Unit 4

Jun. 16, 2017

KansaiOhi Unit 3

Apr. 10, 2018

KansaiOhi Unit 4

Jun. 5, 2018

Kansai

Mihama Unit 3

Jul. 27, 2021

Shikoku

Ikata Unit 3

Sep.7, 2016

KyushuGenkai Unit 3

May 16, 2018

KyushuGenkai Unit 4

Jul. 19, 2018

KyushuSendai Unit 1

Sep. 10, 2015

KyushuSendai Unit 2

Nov. 17, 2015

Restart date7 units

Under Tier 1 review (including 2 units under construction)

Note: Excludes the three reactors of JPDR, Fugen, and Monju.

Electric Power
Plant
Company
KansaiTakahama Unit 3

Source: Compiled from Japan Atomic Industrial Forum, Inc.,“Current Status of Nuclear Power Plants” (August 10, 2021)
and other materialsof the New Regulatory Requirements, 24 of the reactors,
representing aging small and medium-sized models, wereselected for decommissioning. As a result, the number ofreactors fell to 36 (including three under construction) as ofAugust 2022. Starting in 2015, some of those reactors werebrought back into service, with a total of 10 having restarted
by August 2022 (nuclear power provided around 7% of total
electricity generated in 2021).
One of the restarted reactors, the No. 3 reactor at Kansai
Electric Power Company’s Mihama nuclear power station,
had exceeded its mandated service life of 40 years but wasable to resume operation in July 2021 through an extension
approved by the NRA, which was the first such approval to be
granted. However, the reactor was stopped again in October
2021 for failure to complete its specialized safety facility1 onschedule. It went back into operation in September 2022
following the completion of the specialized safety facility.

(2) State of Nuclear Power Generation
Prior to the March 2011 Fukushima Daiichi accident, Japan
had 57 nuclear reactors in operation, and nuclear power
accounted for roughly 25% of the total electric power
generated in fiscal 2010. In 2014, all nuclear reactors
were provisionally shut down. After it became possible
to determine the economic viability of each plant in light

Of the 36 available reactors, 27 (including two underconstruction) applied for permission for change in reactor
installation under the Tier 1 review. Permission was granted
to 17 reactors, and 10 of them were able to resume
operation after passing the Tier 2 and 3 reviews and gaining
their local governments’ consents (see Table 2.1). However,1 Specialized safety facilities: As part of major accident countermeasures mandated by the New Regulatory Requirements, nuclear plant operators are
required to construct bunkered back-up control centers designed to withstand deliberate aircraft crashes and similar threats.

13

The Electric Power Industry in Japan 2023

all 27 need to return to full operation in order for Japan toachieve the goal of raising nuclear energy’s contribution
in the fiscal 2030 power generation mix to 20%–22%, asenvisioned by the Sixth Strategic Energy Plan approved by
the Cabinet in October 2021.
At the August 2022 meeting of the GX Implementation
Council, Prime Minister Kishida clearly signaled thegovernment’s intent to promote the construction of
new reactors, calling on the members to reach “a specificconclusion” on the following measures by the end of
the year: a phased restart of the seven reactors that hadreceived permission for change in reactor installation
beginning in the summer of 2023 (adding to the ten
already back in operation); maximum utilization of existing
reactors, including by extending their operating lives;and development and construction of innovative nextgeneration reactors2 with new safety mechanisms.
For reference, the capacity factor of nuclear power plants inJapan in 2021 was 22.1%.

(3) Nuclear Fuel Cyclea. Basic Policy

Japan, a country lacking in energy resources, has adopted
a basic policy that seeks to make effective use of resources
and reduce the volume and harmfulness of high-level
radioactive waste by pursuing a nuclear fuel cycle that
reprocesses spent fuel and effectively utilizes the plutonium
and uranium recovered (as outlined in the Fifth Strategic
Energy Plan approved by the Cabinet in July 2018 andretained as a basic policy of the Sixth SEP). To this end, theFederation of Electric Power Companies of Japan (FEPC)
unveiled in December 2020 its new “Pluthermal Program”(“pluthermal” is a portmanteau of “plutonium” and “thermal[reactor]”), the main focus of which is to expeditiously
maximize the use of MOX made from plutonium as a fuel for
light water reactors. This program responds to several needs,
such as maintaining energy security and fulfilling Japan’s
principle of not possessing plutonium stocks that have no
purpose. FEPC studied all operating reactors for inclusionin the program, and announced in December 2020 that it
would implement it for at least 12 reactors3 by fiscal 2030. In
February 2022 FEPC released a plan for plutonium use by 11
power companies from fiscal 2022 to 2024.
b. JNFL’s Nuclear Fuel Cycle Operations

Japan Nuclear Fuel Ltd. (JNFL), which is owned by a numberof electric power companies and other private-sector

14

enterprises, engages in five nuclear fuel cycle operations at
its sites in Rokkasho Village, Aomori Prefecture.
Its enrichment plant began operating in 1992. In May 2017,
JNFL received the NRA’s approval of its application for
permission to switch to using a new, cost-efficient type ofcentrifuge offering improved performance and to introduce
other operational changes in compliance with the New
Regulatory Requirements enacted after the Fukushima
Daiichi accident. JNFL voluntarily suspended its operation ofenrichment in the following September in order to carry out
construction for the upgrades being made to its enrichment
plant. Based on the progress in constructing safety facilities
mandated by the New Regulatory Requirements, operation
is expected to resume in February 2023.
JNFL’s reprocessing plant (maximum capacity: 800 tU/year), the construction of which began in 1993, started
accepting spent fuel in 2000 and launched active testingin 2006. An application was filed with the NRA for approvalof operational changes needed to conform with the
New Regulatory Requirements. Following a review, theapplication was approved by the NRA in July 2020. However,a portion of the construction plan remains under review
and preparatory work for adding the required safety
features is still underway. Consequently, JNFL has delayed
the completion date, originally scheduled for the first halfof fiscal 2022, to as early as possible in the first half of fiscal
2024.
Construction of the MOX fuel fabrication plant (maximum
capacity: 130 tHM/year) started in 2010. Approval of
operational changes for complying with the New Regulatory
Requirements was received in December 2020. The ongoing
construction work is tentatively scheduled for completion in
fiscal 2024.
The Vitrified Waste Storage Center receives vitrified highlevel waste (HLW) of ten Japanese utilities from theirreprocessing contractors in the UK and France, and holds
it in interim storage for 30 to 50 years. The return of HLWgenerated through reprocessing in France (1,310 casks intotal) started in 1995 and completed in 2007. JNFL has been
receiving the HLW processed in the UK since 2010.
The Low-Level Radioactive Waste Disposal Center has been
disposing of low-level waste (LLW) from nuclear power
plants in Japan since 1992 in underground pits.

2 This refers to five types: advanced light-water reactors that add enhanced safety features to existing light-water reactor technology (this approach isalready in use overseas, including in the EPR); small modular reactors with a capacity of up to around 300,000 kW that would reduce construction
time and cost because many of their components would be factory built; high-temperature gas-cooled reactors that achieve high-temperature
output and could be used to produce hydrogen; fast reactors that utilize fast neutrons for highly efficient combustion, resulting in less nuclear
waste; and fusion reactors that would harness the energy released by the nuclear fusion of hydrogen atoms.

II. E N E R G Y A N D E N V I R O N M E N TA L P O L I C Y

c. Recyclable-Fuel Storage Center (interim storage of spent
fuel)e. Development of Fast Reactors and High-temperature
Gas-cooled Reactors

Tokyo Electric Power Company Holdings (TEPCO) and theJapan Atomic Power Company are currently building afacility in Mutsu City, Aomori Prefecture, for dry-cask interim
storage of spent fuel until it is transported to a reprocessing
plant, which will start with 50-year storage of up to 3,000t, and its capacity will be ultimately expanded to 5,000 t.
Approval of the application for operational changes tocomply with the New Regulatory Requirements was granted
in November 2020, and operation is tentatively expected to
begin in fiscal 2023, following the completion of additionalsafety features and other construction.

In line with the Japanese government’s basic policy for
dealing with the country’s limited energy resources, theJapan Atomic Energy Agency (JAEA) constructed the Joyo
experimental fast-breeder reactor (thermal output: 140,000kW), and later the Monju prototype fast-breeder reactor(electrical output: 280,000 kW). However, in December
2016, the government finally decided to decommission
Monju for several reasons, including poor economic viability.
Fast reactor research and development using the Joyo
experimental reactor at Oarai Research & Development
Institute in Ibaraki Prefecture will continue to be pursued
in partnership with other countries following the roadmap
developed in accordance with the new policy on fast reactor
development adopted by the Inter-Ministerial Council for
Nuclear Power in December 2016. In December 2021, the
JAEA announced that resumption of the Joyo reactor’soperation would be moved back to the end of fiscal 2024,
amid delays in the NRA’s review of changes for complying
with the New Regulatory Requirements.

d. Disposal of High-level Radioactive Waste

As for high-level radioactive waste generated from spent
fuel, the Nuclear Waste Management Organization ofJapan (NUMO) was established in 2000 by mainly electric
power companies to implement final disposal of the waste.
In October 2020, Suttsu Town and Kamoenai Village in
Hokkaido each voted to accept a literature review,4 which isthe first step in the process of host selection. NUMO initiatedliterature reviews in both municipalities in the following
month. As of August 2022, the collection of literature anddata had been nearly completed for both municipalities,
setting the stage for candidate evaluation based on theinformation gathered.

In July 2021, the JAEA restarted the HTTR (High Temperature
Engineering Test Reactor; thermal output: 30,000 kW) at
Oarai Research & Development Institute after a hiatus often and a half years. The HTTR is a high-temperature gascooled reactor that was built to perform demonstration tests

Entrance door and equipment hatch of Tokai II Power Station made watertight (The Japan Atomic Power Co.)
Tokai II Power Station entered operation in November 28, 1978

3 In December 2009, the No. 3 reactor at Kyushu Electric Power Company’s Genkai Nuclear Power Plant became the first in Japan to commencecommercial operation using MOX fuel made from recovered plutonium. Since then, four other reactors have followed suit.
4 The literature review is followed by two more steps: an “overview survey” that includes drilling and other assays, and then a “detailed survey” thatinvolves studies in an underground facility. This three-stage process takes around 20 years to complete. At the conclusion of each stage, NUMO
takes comments from the heads of local governments, and does not proceed to the next step if doing so goes against the opinions expressed.

15

The Electric Power Industry in Japan 2023

such as extracting high-temperature helium gas (950˚C)and using it to produce hydrogen. The resumption of its
operation is expected to lead to implementation of researchcontracts from the OECD Nuclear Energy Agency and tobilateral collaborations with countries such as Poland, the UK
and the USA. In April 2022, the JAEA and Mitsubishi Heavy
Industries, Ltd. were contracted by METI’s Agency for Natural
Resources and Energy to conduct its Hydrogen Production
Demonstration Project Utilizing Very High Temperature. The
two companies have launched R&D on producing hydrogenusing an HTTR, with the project set to run until March 2031.
Full-scale hydrogen production testing is scheduled to startin the latter half of this decade.

(4) Decommissioning Work at Fukushima Daiichi
Nuclear Power Plant
Efforts to decommission the Fukushima Daiichi Nuclear
Power Plant’s reactors are being carried out throughan inter-ministerial council that reports to the Nuclear
Emergency Response Headquarters, which is led by thePrime Minister, so that the full support of the government
can be marshalled for the decommissioning process.
a. Decommissioning Roadmap

In December 2011, nine months after the Fukushima Daiichi
accident, Fukushima Daiichi’s reactors were declared to
be in cold shutdown and TEPCO released a roadmap for

Changes in Air Dose Rate

Figure 2.3

10 years later

November 5, 2011

October 25, 2021
Source: Reconstruction Agency, “Acceleration of Reconstruction Efforts”

Milestones on the Mid- to Long-Term Roadmap

Initiatives toward stabilization
Achievement of cold shutdown
Major reduction in radiation
releaseDecember 2011

Phase 1
Period from start of spent fuelassembly removal(2 years or less)November 2013

(start of spent fuel assembly
removal from Unit 4)

Figure 2.4

Phase 2
Period unit start of fuel debris
retrieval(10 years or less)
December 2021

Phase 3
Period until completion of
decommissioning measures(30 to 40 years later)

Phase 3-1

End of 2031

30 to 40 years later

Source: TEPCO website (https://www.tepco.co.jp/en/hd/decommission/project/roadmap/index-e.html)

16II. E N E R G Y A N D E N V I R O N M E N TA L P O L I C Y

decommissioning Units 1–4 and dealing with radioactive
contaminated water resulting from the decommissioning
process. Since then, the roadmap has been continuallyreviewed and revised as needed. Radiation levels in thesurrounding area have decreased (see Figure 2.3) and gradualprogress was being made in reconstruction and the returnof displaced residents. TEPCO is giving top priority tosafety and early reduction of risk under an approach thatseeks to simultaneously advance both reconstruction anddecommissioning work. Phase 3 of the roadmap began in
December 2021, and the entire decommissioning project is
expected to last for 30 to 40 years (see Figure 2.4).

diluting the concentration to below the legal limit. In July,an agreement was reached with the International Atomic
Energy Agency (IAEA) concerning the scope of its technicalassistance for the discharge of the treated water. Prior to thescheduled discharge in the spring or summer of 2023, the
IAEA will conduct a safety review of the plan, monitor thearea of release, and carry out other preparations. In August
2021, the TEPCO announced its intention to dilute the tritium
concentration of the water to one seventh of the WHO’s
drinking water standard by adding large volumes of seawater,
and to discharge the diluted water at a point approximately
one kilometer off the coast of the power plant, via a tunnel
that will be bored in the bedrock.

b. Removing Fuel from Spent Fuel Pools

After the accident, it was decided in the interests of risk
mitigation to remove the spent fuel then being stored in
the spent fuel storage pools at Units 1–4 and to store it ina shared pool at the site. The removal of spent fuel fromthe pool in Unit 4, where the most spent fuel was stored,
was completed in December 2014, and work to remove
spent fuel from Unit 3 ended in February 2021. Currently,
a platform for aiding fuel removal at Unit 2 is being
constructed, and rubble impeding fuel removal at Unit 1 isbeing taken away. The entire removal process is slated forcompletion in 2031.

An IAEA task force visited Fukushima Daiichi Nuclear Power
Plant in February 2022 to review the safety of ALPS-treatedwater, and released a report on its findings in April. The
report stated that TEPCO had conducted a “comprehensive
and detailed assessment” of radiological impact, and thatthe assessment indicated that “doses to the assumed
representative person are expected to be very low andsignificantly below the dose constraint set by the regulatory
body (NRA).” TEPCO received the NRA’s approval for the basic
design of the treated water dilution/discharge facility andrelated facilities in July 2022, and began constructing an
undersea discharge tunnel in August 2022.

c. Retrieval of Fuel Debris

Extensive fuel debris, consisting of fuel and internal reactor
structures that melted during the accident and then cooled
and solidified, is believed to be present in Units 1, 2, and 3.
Because the debris emits extremely high levels of radiationthat preclude entry by personnel, the debris in the Unit
2 reactor will be removed using a robotic arm, with work
tentatively scheduled to start in the latter half of fiscal 2023.
d. Control of Radioactive Contaminated Water

The amount of radioactive contaminated water has
increased in Units 1–3 as a result of the mixing of inflowing
groundwater with water pumped into the reactor buildings
to cool the fuel debris. In response, three strategies havebeen implemented: treatment of the contaminated water,
prevention of groundwater intrusion, and preventionof leakage of the contaminated water. The radioactive
contaminated water is being treated to a level below thedischarge standards using a Multi-nuclide Removal Facility(Advanced Liquid Processing System: ALPS) and otherequipment, and the treated water is stored on site. Since theamount of this water has continued to grow, the government
decided in April 2021 to release the water into the ocean after

3. Renewable Energy(1) Current Status and Targets
The Sixth Strategic Energy Plan, approved by the Cabinetin October 2021, sets as its top priority the transformationof renewable energy into the main electric power source.
It thus calls for maximizing the adoption of renewables. To
this end, it lays out the goal of raising the existing target for
renewable energy’s contribution to power generation in
2030 from 22%–24% to 36%–38% (see “1. Strategic Energy Plan”
in this chapter).
To assist the adoption of renewables, a system forpurchasing excess electricity generated by solar power
plants was launched in November 2009, and a feed-in tariff(FIT) scheme covering a wider range of power sources (seebelow for details) was introduced in July 2012. This scheme
accelerated capital investment in renewables, with installedcapacity growing by 65.5 GW between the launch of the
FIT scheme and the end of December 2021. Including pre-17

The Electric Power Industry in Japan 2023

Installed Capacity of Renewable Energy (as of end December 2021)

Table 2.2
[Unit: MW]

Combined total
by end June 2012

Combined capacity
installed under FIT

Total

Solar power (residential)

4,700

8,291

12,991

Solar power (non-residential)

900

51,052

51,952Wind power

2,600

2,202

4,802

Small / medium hydropower

9,600

815

10,415

Biomass

2,300

3,094

5,394

500

93

593

20,60065,547

86,147Type

Geothermal power
Total

Source: FIT scheme public information website: https://www.fit-portal.go.jp/PublicInfoSummary

Outline of the FIT Scheme

Figure 2.5

Those engaged in
the power generation
business using renewableenergy sources

Sale of electricity produced fromrenewable energy sources

Solar power

Purchase of electricity at a fixedprice for a governmentguaranteed period

Wind power

Small- andmedium-scalehydro power

Electric powercompanies

Electricity customers
Electricity supply

Collection of surcharge together
with electricity charge
Submission ofcollected surcharge

Payment forpurchase cost

Green Investment
Promotion Organization(organization to collect anddistribute the surcharge)

GeothermalPower

BiomassThose who generate power
at home

Decision on tariffs and durations,
respecting the opinion of the special
committee (each fiscal year)

Qualification of facilities(Government confirms whether
the facility can generate electricity
stably and efficiently. Qualification
is cancelled if the facility no longer
satisfies those requirements.)

Decision of surcharge
unit price per kWh(each fiscal year)

Minister of Economy,
Trade and Industry
Opinion on tariffs and duration
Special committee fordetermination of tariffs anddurations

Government

Source: Green Investment Promotion Organization website

18

II. E N E R G Y A N D E N V I R O N M E N TA L P O L I C Y

FIT capacity, total installed renewables capacity reachedapproximately 86 GW. In April 2022, the government
launched a feed-in premium (FIP) scheme for large-scalecommercial solar power, among other power sources.

(2) FIT Scheme and Issues
The government passed the Act on Special Measures

Concerning Procurement of Electricity from Renewable
Energy Sources by Electricity Utilities in August 2011, which
requires the general electricity utilities to purchase all
the electricity generated from renewable energy sources(including hydropower plants with a capacity of under 30
MW). This act led to implementation of the FIT scheme forrenewable energy on July 1, 2012.

Purchase Prices and Durations under the FIT Scheme
Purchase price [yen/kWh]Purchase category

Solar (household)Solar (commercial)

Onshore wind power

FY2021

FY2022Less than 10 kW

19

10 kW–50 kW

12

50 kW or above

11

Less than 50 kW

17

50 kW or above
Replacement capacity

FY2024

17

16

–

11

10

–

10

9.5

–

16

15

14

Less than 15,000 kW

15

14

–

–

32

29

Biddingsystem

–

36

36

40

40

15,000 kW or above

26

26

Geothermal(with all facilities upgraded)

Less than 15,000 kW

30

30

15,000 kW or above

20

20

Geothermal(with original underground facilities
in use)Less than 15,000 kW

19

19

15,000 kW or above

12

12

Less than 200 kW

34

34

200 kW–1,000 kW

29

29

Small & medium-sizedhydroSmall & medium-sizedhydro using existing
conduits*

BiomasDuration

FY20231,000 kW–5,000 kW

27

5,000 kW–30,000 kW

20

Less than 200 kW

25

25

200 kW–1,000 kW

21

21

1,000 kW–5,000 kW

155,000 kW–30,000 kW

12

10

27
20

–
16

15
12

–

–

Less than 10,000 kW

24

24

–

2,000 kW or above

32

32

–

Construction
material waste

All capacities

13

13

–

General waste/other All capacities

17

17

–

Biogas from methane
fermentation

39

39

20

–
9

Unused materials

All capacities

20

15

General wood, etc.

* Upgrades to electrical facilities and penstocks utilizing existing conduits.

[years]Bidding system

Offshore wind power(not covered by the Act on Promoting Bottom-fixed offshore wind power
the Utilization of Sea Areas for theDevelopment of Marine Renewable
Floating offshore wind power
Energy Power Generation Facilities)
Geothermal

Table 2.3

35

20

–

Source: Compiled from Agency for Natural Resources and Energy website

19

The Electric Power Industry in Japan 2023

Results of FIT Tenders in Fiscal 2021 & 2022
Technology

Table 2.4

TimingEligible facilities

Successful bids

June 2021

250 kW or above

Total output: 208,000.0 kW (135 bids)
Successful bid prices: 10.00–10.98 yen/kWh

August 2021

250 kW or above

Total output: 233,817.7 kW (208 bids)
Successful bid prices: 10.28–10.75 yen/kWh

November 2021

250 kW or above

Total output: 242,807.5 kW (82 bids)
Successful bid prices: 10.23–10.40 yen/kWh

March 2022

250 kW or above

Total output: 268,709.9 kW (273 bids)
Successful bid prices: 8.99–10.25 yen/kWh

June 2022

250 kW–1,000 kW

Total output: 24,764.7 kW (39 bids)
Successful bid prices: 9.80–10.00 yen/kWh

Onshore wind power

November 2021–

Total output: 936,408.9 kW (32 bids)
Successful bid prices: 14.98–16.16 yen/kWh

Biomass power

November 2021

Power facilities that generate 10,000 kW
or more using general wood material andother biomass / Biomass power facilities
that use liquid biomass fuelSolar power

Total output: 74,950.0 kW (1 bid)
Successful bid prices: 18.50 yen/kWh

Source: Compiled from Organization for Cross-regional Coordination of Transmission Operators website

The electricity supply sources, purchase prices and purchaseperiods covered by the FIT scheme for each fiscal year are
to be determined by METI. The purchase prices and periods
for fiscal 2021 onward are as shown in Table 2.3. Under the
FIT scheme, electricity utilities are permitted to pass on theircosts for the purchase of electricity generated by renewableenergy sources to their customers in the form of a surcharge
by including them in the electricity bill. The surcharge
for fiscal 2022 is 3.45 yen per kWh (2.7424 trillion yen forJapan as a whole), or 10,764 yen per year for the standard
model household. Under this system, electricity utilities
collect the surcharge from customers based on electricity
sales volume and transfer the funds to a cost-bearing
adjustment organization (the Organization for Cross-regional
Coordination of Transmission Operators), which refunds theirpurchase costs to them in due course (see Figure 2.5).
The scheme also contains a provision that reduces thesurcharge for industrial customers who use extremely highvolumes of electricity and who satisfy certain conditions.
As the investment in renewable energies has increased and
FIT-approved capacity has grown since 2012, problems haveemerged and the government revised the FIT scheme in2016. This included the introduction of a tender scheme forsolar power generation and biomass generation above acertain level to bring down purchase prices. The results of
FIT tenders made in fiscal 2021 are shown in Table 2.4.

20(3) Complete Overhaul of the FIT Scheme andLaunch of the FIP Scheme
As adoption of renewables has spread, a number ofproblems with FIT have emerged, including rising
renewable surcharges on electricity rates and difficulties
with receiving power generated by renewables on the gridside. In response, the government decided to overhaul
the FIT system in order to integrate renewables into theelectricity market as an economically self-sustaining coreelement of the power generation mix, maintain incentives
for investment, and contain the cost burden on the public.
In June 2020, the government revised the Act on Special
Measures Concerning Procurement of Electricity from
Renewable Energy Sources by Electricity Utilities throughthe enactment of the Act on Special Measures Concerning
Promotion of Utilization of Electricity from Renewable
Energy Sources (part of the Act for Establishing Energy
Supply Resilience). Under the amended act, a feed-in
premium (FIP) scheme was rolled out in April 2022 to add
premiums to the market price of renewables expected
to evolve into competitive power sources, such as largecommercial solar power generation and wind power
generation. Similar to the FIT scheme’s setting of a fixed unit
price per kWh for the purchase of renewable power, the FIP
scheme sets a base price through bidding, and a reference
price is calculated from this. The reference price represents
the expected revenue of electricity generation utilities and isrevised monthly by subtracting the balancing cost from theII. E N E R G Y A N D E N V I R O N M E N TA L P O L I C YResults of FIP Tenders
Technology
Solar power

Table 2.5

TimingEligible facilities

Successful bids

June 2022

1,000 kW or above

Total output: 128,940.0 kW (5 bids)
Successful bid prices: 9.85–9.90 yen/kWh

Source: Compiled from Organization for Cross-regional Coordination of Transmission Operators website

Sakai Solar Power Station (Kansai Electric Power Co.)

Hibiki-nada Offshore Wind Project (Kyusyu Electic Power Co.)
Project launch: scheduled in FY2025 / Operator: Hibiki Wind Energy Co., Ltd.

Setana Osato Windfarm(Electric Power
Development Co., Ltd. (J-POWER) )COD: 2020 / Owner: J-POWER / Capacity: 50,000 kW

Wasabizawa Geothermal Power Plant (Electric Power Development Co.,
Ltd. (J-POWER))
COD: 2019 / Owner: Yuzawa Geothermal Power Corporation / Equity:
J-POWER (50%), Mitsubishi Materials Corporation (30%) and Mitsubishi Gas
Chemical Company (20%) / Capacity: 46,199 kW

21

The Electric Power Industry in Japan 2023

Results of Tenders under the Act on Promoting the Utilization of Sea Areasfor the Development of Marine Renewable Energy Power Generation Facilities
Technology

Timing

Location

Operators

Floating

Goto Floating Wind Farm LLC
Off the coast of(Members: Toda Corporation, ENEOS Corporation,
June 2021 Goto City,
Osaka Gas Co., Ltd., Kansai Electric Power Co., Inc.,
Nagasaki Prefecture
INPEX Corporation, Chubu Electric Power Co., Inc.)

Installed Successful Start ofcapacity bid price operation

16.8 MWSee note–

Offshore Wind Power Project off the Coast of
Off the coast of
Noshiro City, Mitane Town and Oga City,
Noshiro City, Mitane
Akita Prefecture
Town, and Oga City,(Members: Mitsubishi Corporation Energy Solutions Ltd.,
Akita Prefecture
Mitsubishi Corporation, C-Tech Corporation)

478.8 MW

13.26
yen/kWh

December
2028

Bottom- December southern coasts of
2021
fixed
Yurihonjo City,

Offshore Wind Power Generation Project off
the Coast of Yurihonjo City, Akita Prefecture(Members: Mitsubishi Corporation Energy Solutions Ltd.,
Mitsubishi Corporation, Venti Japan Inc., C-Tech
Corporation)

819.0 MW

11.99
yen/kWh

December
2030

Off the coast of
Choshi City,
Chiba Prefecture

Offshore Wind Power Generation Project off
the Coast of Choshi City, Chiba Prefecture(Members: Mitsubishi Corporation Energy Solutions Ltd.,
Mitsubishi Corporation, C-Tech Corporation)

390.6 MW

16.49
yen/kWh

September
2028

Off the northern/
Akita Prefecture

Note: Only one bidder participated in this auction. The bidder’s plan was subjected to a review,
and was judged to satisfy the criteria set.

sum of the wholesale power price and the non-fossil value
trading market price. The difference between the base priceand the reference price is paid to the electricity generation
utilities as a premium. On the whole, the revenues for theelectricity generation utilities are on par with those under
the FIT scheme, but the FIP scheme is expected to provide
an incentive for power generation during hours when themarket price is high, and to contain the balancing cost ofother power sources, among other benefits. The FIP tenderresults published in June of fiscal 2022 are shown in Table
2.5.

(4) Development of Legal Framework for Advancing
Offshore Wind Farm Projects, and Start of Bidding
Because of the potential for installing large generation
capacity and reducing costs, the government sees offshore
wind power as a trump card for making renewable energy
the main source of electricity, and has set long-term
installation targets as part of its policy for advancing thisform of energy. Many Japanese companies are seeking toenter this field by collaborating with partners, particularly
European electric power enterprises experienced in offshore
wind power. The government enacted the Act on Promoting
the Utilization of Sea Areas for the Development of Marine
Renewable Energy Power Generation Facilities to lay out,

22

Table 2.6

Source: Compiled from METI website

among other things, rules for exclusive occupancy and useof sea areas and the process for coordinating the interests ofstakeholders such as members of the fishing industry. Under
this act, which went into effect in April 2019, the government
designates certain offshore areas suited for wind power
generation as promotion zones and selects developers bytender to carry out projects in those areas. Developers wereselected in June and December 2021 (Table 2.6).
Following the December 2021 auction, there emerged calls
for a cap on the number of successful bids made by eachbidder as a way to provide market entry opportunities to alarger number of enterprises, and for accelerated launch of
projects. In response, the government proposed changes
to bidding rules and gathered stakeholder feedback on the
proposal. Discussions are now underway toward holding
the next auction in 2022 under two revisions: providing an
incentive for speeding up project launches by giving higher
weight to bids with earlier start dates, and awarding higherscores to bids that offer benefits such as greater supply
chain resilience by contributing to stable supply of electric
power (i.e., early service recovery following outages).
Electricity utilities and other concerned parties haverecognized the need for a transmission system that can

II. E N E R G Y A N D E N V I R O N M E N TA L P O L I C YGovernment Action on GHG Reduction Targets
Date

Table 2.7

Trend

December 1997

Kyoto Protocol adopted at COP3. Japan’s GHG reduction target set at 6% below 1990 levels.

October 1998

Act on Promotion of Global Warming Countermeasures instituted in response to adoption of the Kyoto Protocol.

April 2005

Kyoto Protocol Target Achievement Plan outlining the measures necessary to attain Japan’s 6% GHG reduction
target approved at a meeting of the Cabinet.

July 2015

The Japanese government submits to the UNFCCC Secretariat its INDC target of reducing emissions by 26%
below fiscal 2013 levels by fiscal 2030.

December 2015

Paris Agreement adopted.

June 2019

The Long-term Strategy under the Paris Agreement approved by the Cabinet (decision to reduce emissions in
2050 by 80%).

October 2020

Prime Minister Suga declares goal to make Japan carbon neutral by 2050.

December 2020

Green Growth Strategy announced as plan for achieving carbon neutrality by 2050.

April 2021

Japan announces that its GHG emission reduction target for 2030 will be raised to 46% at US-hosted Leaders
Summit on Climate.
Source: Compiled from Agency for Natural Resources and Energy website, etc.

efficiently transmit power to service areas from the regions
where many offshore wind power projects are planned(Hokkaido, Tohoku, etc.). The government, general electricity
transmission and distribution utilities, and the Organization
for Cross-regional Coordination of Transmission Operators
are exploring options such as strengthening the grid
networks and building a submarine DC power transmission
system.

4. Global Warming Countermeasures(1) International Frameworks and Japanese
Government Initiatives
a. Greenhouse Gas Emission Reduction Targets

At the 21st Conference of the Parties to the United Nations
Framework Convention on Climate Change (COP21) heldin December 2015, 195 countries and regions adopted theParis Agreement, which addresses greenhouse gas (GHG)
emission reductions from 2020 onward. The Paris Agreement
sets forth various long-term shared global targets, including
containing the average global temperature increase at 2°C
above pre-industrial revolution levels and striving to keep it
no higher than 1.5°C.

The Japanese government set in 2015 the goal of reducing
emissions in fiscal 2030 by 26.0% from fiscal 2013, andestablished in June 2019 a reduction target of 80% for fiscal
2050. Both goals were reported to the UN Secretariat.
Subsequently, amidst the rise in the international
community’s interest in addressing global warming, in
October 2020 Prime Minister Yoshihide Suga declared in apolicy speech October 2020 that “by 2050 Japan will aim
to reduce greenhouse gas emissions to net-zero, that is, torealize a carbon-neutral, decarbonized society.” The goal ofachieving carbon neutrality in 2050 was codified as a corepolicy through a revision of the Act on Promotion of Global
Warming Countermeasures that was passed in May 2021.
Speaking at the Leaders Summit on Climate hosted onlineby the USA in April 2021, Prime Minister Suga stated thatJapan “aims to reduce its greenhouse gas emissions by 46
percent in fiscal year 2030 from its fiscal year 2013 levels,
setting an ambitious target which is aligned with the longterm goal of achieving net-zero by 2050” and “will continue
strenuous efforts in its challenge to meet the lofty goal of
cutting its emission by 50 percent.”

23

The Electric Power Industry in Japan 2023

Changes in CO2 Emissions by Sector

Figure 2.6[Emissions (Million tons) ]
500

503

464

<relative to fiscal 2013>(relative to preceding fiscal year)

Industrial (plants, etc.)
400

387

<-23.3%>356 (-8.1%)
300

Transportation (vehicles, etc.)
237

Operations and others

208(commercial operations,services and offices, etc.)

200

206

224
208
Residential

131
100

129

Energy conversion (excluding statistical errors

96
66
24
6.7

0

106

in the distribution of electricity and heat)

Industrial processes and use of products
Waste (incineration, etc.)
Other emissions (agriculture, indirect CO2 emissions, etc.)<-17.6%>185 (-10.2%)<-23.2%>191
182 (-4.7%)<-19.8%>159 166 (+4.5%)

90

82 <-22.7%>(-8.4%)

49
30
3.6

45 43 <-12.7%>(-5.3%)
31 31 <+4.0%>
3.0 3.0 (-0.7%)’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19’20<-17.8%>(-2.7%)[ FY ]

Note 1: Emissions by sector are calculated by distributing the emissions that accompany power
generation and thermal generation among the respective final consumption sectors.
Note 2: Percentages in angle brackets indicate change in emissions in each sector relative to fiscal
2013, and percentages in parentheses indicate change relative to fiscal 2005.

(2) GHG Emissions and Voluntary Efforts by thePrivate Sector
a. GHG Emissions in Japan

In fiscal 2020, Japan’s GHG emissions measured 1,150 million
tons (CO2 equivalent), and emissions of CO2 accounted
for 90.8% (1,044 million tons) of this total. CO2 emissions
decreased by 20.8% versus fiscal 2013 (see Figure 2.6).
CO2 emissions in individual sectors have been decreasing
since 2013, and declining by 17.0%, 18.8%, and 23.3%
respectively in the industrial sector, the commercial sector,
and the residential sector between fiscal 2013 and fiscal
2019. This was due largely to lower energy consumption
resulting from energy conservation in all sectors and to
improvements in the CO2 emission intensity for electricity.
b. CO2 Emission and Global Warming Countermeasures
Implemented by the Electric Power Industry

The Federation of Electric Power Companies of Japan(FEPC) (consisting of former general electricity utilities) is

24

Source: Ministry of the Environment, “Japan’s National Greenhouse
Gas Emissions in Fiscal Year 2020 (Final Figures)” (2022)

participating in the Commitment to a Low Carbon Societythat was announced by Japan Business Federation in 2013,and has been promoting measures on both the supply anddemand sides of the electricity. In July 2015, the 10 FEPC
members, J-POWER, the Japan Atomic Power Co. and 23 PPSs
announced their own Commitment to a Low-Carbon Society
in the Electricity Industry, which commits them to achievinga CO2 emission factor in the electricity in fiscal 2030 of
approximately 0.37 kg-CO2/kWh (equivalent to a reduction of
35% from the fiscal 2013 level). The Electric Power Council fora Low Carbon Society (ELCS) was established in February 2016
with the aim of moving forward with the attainment of thesetargets for all electricity utilities as a whole. According to data
released by ELCS, CO2 emissions in fiscal 2021 (final figures)came to 327 million tons-CO2 and the CO2 emission factor
was 0.436 kg-CO2/kWh.
For some time, ELCS has worked to reduce carbon emissions
from both electric power supply and demand, including
by establishing interconnections with renewable energyII. E N E R G Y A N D E N V I R O N M E N TA L P O L I C Y

CO2 Emissions in the Electric Power Industry

Figure 2.7(CO2 emission factor [kg-CO2 /kWh]) 0.75

600 (CO2 emissions [million tons CO2 equivalent])

0.70
500

484

409

400

CO 2 emissions

317
301

275

0.476

200

0.487

0.423

0.65

430

411
0.60

0.552
332

0.417

441

0.570

373

300

100

415

469

372
0.531
0.516
0.496

345

0.55

329 327
0.50

0.463

0.45

0.444

0.441 0.436

0.40

CO2 emission factor
0.373
0.351

0.350

0

0.35
0.30

’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

Note: Reflected adjustments made for Kyoto Mechanism credits

grids and improving the efficiency of thermal power plants.
With the Japanese government’s decision to raise theemissions reduction target, ELCS announced that it would
step up its efforts. In June 2022, ELCS partially revised theCommitment to a Low-Carbon Society in the Electricity
Industry to indicate its intention to contribute to theachievement of the nationwide reduction goal for 2030
(46% decrease from fiscal 2013) by striving to attain thegovernment’s ambitious emissions factor target (around0.25kg-CO2/kWh). Recognizing that the government’s
support is essential for reaching that target, ELCS has
stressed the importance of having the government establish
a clear positioning for nuclear power within its policies, andhaving the government directly take part in awarenessraising efforts for acquiring the understanding andcooperation of local governments and other stakeholders
in communities hosting nuclear power plants. ELCS has
already been promoting the use of nuclear power under afirm commitment to ensuring safety, and endeavoring tomaximize the use of renewables such as hydro, geothermal,
solar, wind, and biomass power. Going forward, it will also
pursue low-carbon and decarbonization approaches suchas co-firing with hydrogen or ammonia as promising next-’19 ’20 ’21

Source: Compiled from FEPC, “Energy and Environment” (2018)

generation fuels. On the demand side, ELCS will strive to
reduce the CO2 emissions of customers by promoting theefficient use of electricity, including efforts to spread the useof high-efficiency electrical equipment and to encouragecustomers to adopt energy-saving and emissions-reducing
practices.
The Transmission and Distribution Grid Council, comprising
the ten general electricity transmission and distribution
utilities, announced in May 2021 “Toward Carbon Neutrality
in 2050: A Roadmap to the Next-generation Electric Power
Network.” Among other policies, the roadmap states thatthe council members will contribute to the achievementof carbon neutrality in 2050 by realizing smooth andflexible grid access and utilization for renewables, etc. This
will involve efforts to secure the proper balancing, inertial,
and synchronization capacity necessary for maintaining
quality, develop grid codes, and establish demand control
technologies utilizing demand response, VPP, and other
distributed energy resources (DER).
Figure 2.7 shows CO2 emission trends in the electric powerindustry.

25

The Electric Power Industry in Japan 2023

III. SUPPLY AND DEMAND
to the impact of the COVID-19 pandemic, but has shifted
upward since December 2020.

1. Electricity Demand and Peak Load
Japan’s electricity demand increased for the most part until
the early 2000s. The real GDP growth rate in fiscal 2021,
a year in which the COVID-19 pandemic’s constraints on
economic activity began to loosen, was 2.2% compared tofiscal 2020, when it stood at -4.5% versus the preceding year.
Annual electricity demand1 has either declined or remained
unchanged since reaching 959.7 TWh in fiscal 2007, and in
fiscal 2021 came to 881.6 TWh (2.1% increase from previous
fiscal year) (see Figure 3.1). This trend is attributable to several
factors, including (1) the slowing of economic growth,(2) improved energy conservation, and (3) demographic
decline. More recently, however, growing solar power
generation in the residential sector, which is not includedin these statistics, also appears to have played a part. Peaknational demand has also remained largely unchanged since
fiscal 2011 and the average of the three highest daily loads
in fiscal 2021 came to 162.3 GW (1.9% increase from previous
fiscal year).
Demand had been trending downward since April 2020 due

Power consumption in fiscal 2020 breaks down by use as
follows: 29% residential demand, 33% commercial demand,and 36% industrial demand (see Figure 3.2). Industry remains
the largest consumer of electricity. Since the 1990s, however,industrial demand has entered a downward trend due
to changes in industrial structure and growing energy
conservation. Over the longer term, the growth in power
consumption has thus been driven by consumption in nonindustrial sectors, namely the residential and commercial
sectors. Growth in consumption in the commercial sector
has been propelled by growth in offices and commercial
facilities triggered by development of a service economy
and the accompanying use of air conditioners and otherappliances. In the residential sector, the rapid spread ofheating and cooling appliances, such as air conditioners andelectric carpets and other household appliances, driven byrising living standards, ensured that power consumption
continued to grow until fiscal 2005. Growth then leveled
off as the population continued to decline, applianceownership reached a saturation point, and energy-saving

Changes in Electricity Demand, 1975 – 2021

Figure 3.1[ TWh ]

1,000

918
858

927

960

926

897

931
884

875

876

900
855

842

914

896

877 863

882

777

750
678

541

500

464
374

250

0

1975 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
[ FY ]

Source: Compiled from Agency for Natural Resources and Energy, “Handbook of Electric Power Industry” (2021) and “Surveys and Statistics of Electricity” (2022)

1 Total of utilities’ net system energy demand, specified service demand, and self-consumption demand.

26

III. S U P P LY A N D D E M A N D

Breakdown of Power Consumption by Sector, 1975–2020

Figure 3.2

Transportation

100%

Industrial

Residential

Commercial

75%

50%

25%

0%

1975

1985

1995

2000

2005

2010

2011

2012

Note: The method of calculation was changed from fiscal 1990.

2013

2014

2015

2016

2017

2018

2019

2020 [ FY ]Source: Agency for Natural Resources and Energy, “Energy Balance in Japan” (2022)

devices began to capture a growing share of the market.
In fiscal 2011, increased awareness of the importance ofsaving electricity in the aftermath of the Fukushima Daiichi
accident caused consumption to go into decline. In fiscal
2019, non-industrial consumption accounted for 62% of final
power consumption.

In the years preceding the March 2011 Great East Japan
Earthquake, the rise in the non-industrial share of demand
widened the gap between summer/winter demand andspring/fall demand (see Figure 3.3), and between daytime andnighttime hours (see Figure 3.4) due to the use of electricity
for heating and cooling. Since the disaster, however, power

Electric Power Consumption over the Course of a Year
90

Figure 3.3[ TWh ]

80

FY2021
FY2005FY2015
FY199570
60
50

FY19854030

FY197520

FY1965

10
0

Apr.

May

June

July

Aug.

Sep.

Note 1: Figures for fiscal 1975 and 1985 exclude Okinawa Electric Power Co.
Note 2: Figures are totals for 10 electric power companies through fiscal 2015, and for
10 areas in fiscal 2016.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Source: Compiled from FEPC, “Electricity Demand” up to fiscal 2015, and OCCTO,“Information on Electricity Supply and Demand” from fiscal 2016

27

The Electric Power Industry in Japan 2023

Power Consumption over the Course of Days on Which Peak Loads Occurred
[GW]
200

Figure 3.4(Total for 10 electric power companies)
183

178

180

171
160

166

140

144

Power consumption

154

July 24, 2001
Aug. 23, 2010
Aug. 5, 2005
Aug. 25, 1995
Aug. 20, 2020
Aug. 7, 2015
Aug. 7, 1990

120
100

110

92
90

80

88

92

76

July 31, 1975

50

40

32

20
0

Aug. 29, 1985

73

65

60

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

[Time of day]
Note: Figures for fiscal 1975 exclude Okinawa Electric Power Co.

Source: Compiled from Japan Atomic Energy Relations Organization, “Graphical Flip-chart of Nuclear & Energy
Related Topics” (2022), and OCCTO, Cross-regional Organization System, “Supply/demand-related Information”

Annual Load Factor, FY1975–FY2020

Figure 3.5

70%

65%

60%

55%

Annual average load / peak load 3-day average
Annual average load / peak load

50%

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020
[FY]

Source: Compiled from Agency for Natural Resources and Energy, “Handbook of Electric Power Industry” for annual
average load / peak load 3-day average (up to fiscal 2015); and OCCTO, “Outlook of Electricity Supply-Demand andCross-regional Interconnection Lines” for annual average load / peak load (from fiscal 2015)28

III. S U P P LY A N D D E M A N D

conservation, wider adoption of solar power generation, andother measures have curbed daytime grid power demandduring the summer, thus shrinking the disparities between
the summer and other seasons, and between daytime andnighttime hours during the summer.
Efficiency in the use of generation facilities declines withgrowing variation in demand, pushing up power supply
costs. Nevertheless, while the annual load factor (i.e.,
the ratio of annual average load to annual peak load, an
indicator of the efficiency of use of generation facilities)
followed a downward trend up to the mid-1990s, it actually
improved to 60%–70% from the mid-2000s. This is thanks inlarge part to the introduction of electricity rates designed tolevel loads and nighttime electricity use (see Figure 3.5).

2. E
 lectric Power Generated
Electric power generated2 came to 863.5 TWh in fiscal 2021
(2.1% increase from previous fiscal year). The progressive

shutdown of nuclear power plants following the March 2011
Fukushima Daiichi Nuclear Power Plant accident increased
dependence on thermal power plants and caused thermal’sshare of power generated to hover around 80% during thepast several years (see Figure 3.6). While nuclear power’s sharestood at 31.4% in fiscal 2010, the shutdown of all nuclear
power plants in September 2013 caused this figure to drop to
0% in fiscal 2014 while thermal’s share rose to 90.8%. Since therestart of Unit 1 of Kyushu Electric Power Co.’s Sendai Nuclear
Power Plant in September 2015, several other plants have
gradually come back online. As a result, nuclear’s share of
power generated in fiscal 2021 rose to 7.8%.
On the other hand, the construction of renewable energy
installations such as wind and solar power plants has
increased. In fiscal 2021, 7.4 TWh of electric power was
generated by wind power, and 19.0 TWh by solar power (seeFigure 3.7). As an effect of the FIT scheme launched in July
2012, the use of solar power has saliently increased sincethen, and solar power installations have been growing witheach passing year, not only for business use, but also for
self-consumption.

Power Generation Mix, FY1975–FY2021

Figure 3.6

ThermalNuclear

100
90
80

19%

13%

10%

9%

8%

8%

9%

9%
8%

8%

2%

1%

9%

Hydro

1.5%

1.8%

2.1%

2.5%

3.1%

3.3%

10%

9%

10%

10%

10%

1%

10%

10%

2%

3%

7%

7%

4%

81%

81%

83%

2018

2019 2020 2021 [FY]

12%
6%
26%

70

33%

34%

31%

Renewables (excluding hydro)

0.3%

8%

31%

60

90%

50

91%

89%

88%

85%

79%

75%
40

90%

60%

60%

57%

56%

1995

2000 2005

2010

60%

30

79%

20
10
0

1975

1985

2011 2012

Note: Figures on electric power generated for electric utilities are generation-end figures
through fiscal 2015, and transmission-end figures from fiscal 2016.

2013

2014

2015

2016

2017

Source: Compiled from Agency for Natural Resources and Energy, “Handbook ofElectric Power Industry” (2021) and “Surveys and Statistics of Electricity” (2022)

2 Electric power generated by electricity utilities.

29

The Electric Power Industry in Japan 2023

Trends in Electric Power Generated by Wind and Solar Energy

Figure 3.7[TWh] 20
19.0

19
18
Wind (for business use)

16

Solar (for business use)

14

Wind (self-consumption)
Solar (self-consumption)

12
10
8

7.4

6
4
2
0

2000

2005

2010

2011

2012

2013

2014

Note: Figures on electric power generated for electric utilities are generation-end figures
through fiscal 2015, and transmission-end figures from fiscal 2016.

3. E
 lectricity Supply and Demand
Balance(1) Present and Projected State of Supply and
Demand Balancea. Recent Developments

Eleven years since the Great East Japan Earthquake, Japan’s
electricity supply and demand situation is improving. Dueto the prolonged shutdown of many nuclear power plants,
however, the country still remains dependent on thermal
power to ensure a stable supply of electricity. Moreover,a grim outlook has been forecast for supply and demand
going forward. This is mainly because increased trading in
the wholesale electricity market and the growing volume ofelectricity generated from renewable energy have given rise
to a very challenging business environment for the power
generation sector, leading to a spate of thermal power
plant closures and idlings. The authorities have responded
by instituting, ahead of the launch of the capacity market,
auctions for covering supply shortages during periodsof high demand, and by establishing a system requiring
electric power plant operators to file advance notice before
closing or idling their plants. Also, some other remedies

30

2015

2016

2017

2018

2019

2020

2021 [FY]

Source: Compiled from Agency for Natural Resources and Energy, “Handbook ofElectric Power Industry” 2021) and “Surveys and Statistics of Electricity” (2022)

have been proposed, such as timing planned outages ofgeneration facilities to take place outside periods of peakdemand, and ensuring supply capacity by leveraging
markets, demand response, and interregional electric power
sharing. Notably, demand-side measures include expanding
the deployment of demand response and encouraging
customers to conserve electricity during shortages byawarding them points for their efforts.
Electricity supply was strained in the early half of 2022
by abnormal weather events that occurred outside thesummer and winter peak demand periods. Unseasonal
cold and heat waves prompted the government to issue
an electricity supply warning in March and an advisory in
June.3 One factor behind the issuance of the warning inMarch was that electric power facilities had been damaged
by an earthquake that occurred off the coast of Fukushima
Prefecture earlier that month.
b. Supply and Demand Projections

As for the electricity supply and demand situation, it hasremained possible in recent years to maintain the minimum
3% reserve margin needed to ensure supply continuity inall areas of Japan. However, there is concern that power

3 E lectricity supply advisories are issued when the area’s power supply reserve margin is between 3% and 5%. Warnings are issued when the margin falls
below 3%.

III. S U P P LY A N D D E M A N D

Projected Electricity Demand and Supply Capacity
Electricity demand [GW]

[GW]

200

Figure 3.8

Supply capacity [GW]Reserve margin [%]

[%]
25

180
20

160
140

15

120
100

10

80
60

5

40
20
0

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031 [FY]04

Source: OCCTO, “Aggregation of Electricity Supply Plans for FY2021 ” (2022)

reserves could fall below the 3% margin in some service areas
during the actual power supply planning or a one-in-tenyear weather event. Measures for addressing this concern
are being taken, including the implementation of kW/kWhauctions. The average rate of change in both electricity
demand and supply capacity over the 10-year period fromfiscal 2021 to fiscal 2030 will be almost 0%, and electricity
demand and supply capacity are expected to remain atcurrent levels (see Figure 3.8). However, the Russian invasion of
Ukraine has led to growing uncertainty about Japan’s accessto fuel imports, which, along with other factors, is prompting
concern about the potential for supply shortages.

(2) Securing Balancing Capacity
Electricity retailers have to be able to always match supply
and demand, and they secure the necessary supply capacity
to do so. It falls upon general electricity transmission anddistribution utilities to secure the supply capacity required
to be able to deliver adequate electricity to retailers tomeet supply and demand fluctuations. Since fiscal 2017,
the capacity required to balance supply and demand has
been procured by tenders conducted by these transmission
and distribution utilities in order to ensure that balancing
capacity is procured in a fair and transparent manner.

The balancing capacity procured is of two main types: powersource I and power source II. Power source I consists of power
provided by dedicated sources of balancing capacity that arealways available to transmission and distribution utilities; andpower source II consists of surplus power from sources thatcan be used following gate closure for electricity retailers.
Power source I’ provides balancing capacity when weather
conditions are severe, and is procured utilizing generated
output and demand response programs.
In fiscal 2021, 10,970 MW of power source I and 129,140
MW of power source II were procured. In addition, 3,640
MW of power source I’ was procured, of which 2,300 MW ofdemand was met by demand response.
In fiscal 2021, a balancing market was established as aplatform for facilitating efficient procurement and operationof cross-regional balancing capacity. The market launchedtrading in capacity for balancing errors in renewable energy
predictions in April 2021. Trading in all other balancing
capacities is being phased in, with completion of thisprocess scheduled for 2024.

4 T his refers to the supply plans prescribed by Article 29 of the Electricity Business Act. 0

31

The Electric Power Industry in Japan 2023

IV. ELECTRIC POWER FACILITIES

1. Power Generation Facilities1
Total generating capacity in Japan was 314.7 GW at the endof fiscal 2021. This consisted of 49.4% thermal power (15.4%
coal, 24.8% LNG, and 9.2% oil), 10.5% nuclear power, 15.6%
hydro, and 24.2% renewables (excluding hydro). Figure 4.1
shows the breakdown of total generating capacity by powersource at the end of fiscal 2021.

(1) Power Generation Facilities for Electric
Utilities
a. Thermal PowerThe total installed capacity of thermal power plants was
155.3 GW as of the end of fiscal 2021. This accounts for
49.4% of Japan’s total generating capacity, making thermal
power the predominant source of electricity. In recent years,
the increasing deployment of variable renewable energy(solar power) has spurred greater need to leverage thebalancing capacity of thermal power to match supply withdemand. The average power generation efficiency (gross

Breakdown of Commercial Power Generation
Facilities by Power Source (FY2021)
Figure 4.1
Wind 1.5%
Biomass andwaste 1.8%

Others 0.4%

Coal
15.4%

Solar
20.8%

LNG
24.8%

Hydro
15.6%
Nuclear
10.5%

Oil
9.2%

Total generating capacity 314.7 GW
Source: OCCTO, “Aggregation of Electricity Supply Plans for FY2022”

32

efficiency) of all thermal plants in Japan was maintained at aworld-class level (see Figure 4.2).
Coal-fired generating capacity came to 48.4 GW. Coalgenerates higher CO2 emissions than other fuels, but offers
superb supply stability and economy. Inefficient coal power
plants are being gradually phased out toward 2030,
meanwhile high efficiency coal power plants are being
developed to further lessen its environmental impact. The
past 20 years have seen emissions reduced by the
introduction of ultra-supercritical (USC) coal power plants. In
fiscal 2021, the government began calling on inefficient coal
power plants to curtail power generation through thecapacity market (curtailing the average annual capacity
factor to no more than 50%, beginning in fiscal 2025). As
another step for phasing out inefficient coal power, thegovernment will establish in fiscal 2023 a new index only forcoal power in the power generation efficiency benchmark
system based on the Act on the Rational Use of Energy,
adding to the existing weighted average index for thermal
power as a whole.
LNG-fired generating capacity totaled 78.0 GW. LNG-fired
power plants produce lower SOx, NOx, and CO2 emissions
than oil- and coal-fired plants. Construction of large LNGfired power plants employing high-efficiency combinedcycle technologies is underway to further reduce emissionsof these substances. A new plant2 added to the grid in 2018
exhibits significant improvements in performance, with gas
turbine inlet temperatures of 1,600°C and power generation
efficiency of approximately 63.08%.
Oil-fired generating capacity was 28.9 GW. Oil plays ameasurable role in power supply during peak demand andbalancing but accounted for just 2.4% of all power
generated in fiscal 2021, representing a considerably smaller
contribution versus other thermal power generation
methods (coal, 32.7%; LNG, 37.0%).
b. Hydro Power

Hydro power generating capacity stood at 49.2 GW at the endof fiscal 2021. Hydro power plants have been promoted inJapan to take advantage of the country’s abundant rainfall.
Conventional hydro accounted for 21.8 GW and pumped
storage for 27.5 GW. Variable speed pumped storage systems

1 The data on power generation facilities include facilities owned by electricity generation utilities and those owned by entities other than electricity
generation utilities from which electricity retailers and general electricity transmission and distribution utilities procure electricity (such as facilities
generating electricity under the FIT scheme).

IV. E L E C T R I C P O W E R FA C I L I T I E S

Average Power Generation Efficiency of Thermal Power Plants in Japan
Compared with Other Countries

Figure 4.2[%] 52

UK & Ireland
France50

Power generation efficiency

48
46

Japan

44

US
South Korea

42

Germany
Northern Europe

40
38Australia
China
India

36
34
32
30
28

'90

'92

'94

'96

'98

'00

'02

'04

'06

'08

'10

'12

'14

'16

'18 '19 [Year]

Note: 1. Power generation efficiency is generation-end weighted average of power generation efficiencies of coal, oil, and gas (low heating value basis).
2. Covers facilities of electricity generation utilities whose main business is selling electricity to third parties.
3. Figures for Japan are for the Japanese fiscal year (April–March).
Source: FEPC, “INFOBASE 2021” (2021)

Comparison of SOx and NOx Emissions per Unit of Power Generated at
Thermal Power Plants of Major Countries (2019)

Figure 4.3[g/kWh]2.0

SOx emissions

1.71

NOx emissions

1.5

1.07
1.0

0.75
0.5

0.54

0.08
0.0

0.47

0.33 0.31

US

Canada

UK

0.36

0.08

France0.04

Germany

0.15

Italy

0.16

0.24

Japan

Source: FEPC, “INFOBASE 2021” (2021)

2 Chubu Electric Power Co.’s Nishi-Nagoya Thermal Plant Unit 7-2 (operation started in March 2018)33

The Electric Power Industry in Japan 2023

A large-scale storage battery (a redox flow battery)(Hokkaido Electic Power Network Co.,Ltd.)COD: April 1,2022 / Owner: Hokkaido Electric Power Network Co.,Ltd. / Site:
Minami-Hayakita Substation, Hokkaido Electric Power Network / Power: 17,000
kW; Capacity: 51,000 kWh

Abekawa Hydroelectric Power Station (Chubu Electric Power Co.)
Official name: Abekawa Hydroelectric Power Station / COD: December 2024
(scheduled) / Owner: Chubu Electric Power Company

have also been adopted for a portion of pumped storage
power generation. These systems provide a means ofaddressing fluctuations in output from variable renewableenergy as they are able to control their input power flexibly
during pump operation.
c. Renewable Energy• SolarInstalled solar power generating capacity at the end of fiscal
2021 was 65.4 GW. The deployment of renewable energies,
mainly solar power, has been progressing in Japan. Solar
power makes up approximately 86.0% of total FIT-certified
renewable power generating capacity. As a result, decrease in
net demand3 in the morning and increase in net demand in
the evening have become more extreme than before. This

Joetsu Thermal Power Station (Joetsu City, Niigata)(Tohoku Electric Power Co.)

Taketoyo Thermal Power Station (JERA Co., Inc.)
COD: August 2022* unit5 / Owner: JERA
Taketoyo Thermal Power Station Unit 5 is a high-efficiency coal-fired power stationthat uses an ultra-supercritical (USC) power generation system, and it contributes
to the stability of the electricity supply. By co-firing woody biomass fuel, it reduces
CO2 emissions as much as possible to mitigate environmental impact.

has become a grid operation issue for some regions. Since it
started becoming difficult to adjust supply and demandversus the fluctuating output of solar power using only thebalancing capacity of thermal power and pumped storagehydro power, the output of solar power has been curtailed in
Tohoku, Chugoku, Shikoku, and Kyushu (including its remoteislands) since 2018. Resolution of this fluctuating output
challenge is a critical task for advancing the further
deployment of solar power.
• WindWind power generating capacity was 4.7 GW as of the endof fiscal 2021. The installation of wind power facilities has
lagged behind that of solar power facilities, due to factors
such as the longer time needed to assess environmental

3 Total of demand, less solar power output. Represents demand for grid power.

34

IV. E L E C T R I C P O W E R FA C I L I T I E S

Inspection of powertransmission equipmentwith drone(Chugoku Electric Power
Transmission &Distribution Co.)
Sakuma Frequency Converter Station (Electric Power Development Co., Ltd.
(J-POWER) )COD: 1965 / Owner: J-POWER Transmission Network Co.,Ltd. / Transmission
Network / Capacity: 300MW

Thyristor Valve in the New East-West HVDC interconnection
at the Shin-Shinano substation (2021)(Tokyo Electric Power Company Holdings, Inc.)

Unit 2 of Sakaide Power Station (Shikoku Electric Power Co.)
Reentered service after conversion from oil to LNG-CC in August 2016.

impacts and constraints on grid capacity. The majority of
installed wind power generation facilities are onshore, andonly around 50 MW of capacity is offshore. However, theFIT-certified capacity of offshore wind installations has
trended upward, reaching 668 MW at the end of fiscal 2021.

fluctuation. This means that it can be used to reliably
generate electricity in the wake of disasters, and thus isbeing increasingly introduced as a power source that canhelp to strengthen disaster resilience, even when comparedwith other renewables.

• Biomass and waste
Biomass and waste generating capacity at the end of fiscal
2021 came to 4.8 GW. In Japan, this form of power
generation has centered upon municipal waste incinerationand the direct combustion of black liquor from papermaking
and wood waste from lumber production. Biomass andwaste power, low environmental load type thermal power isa renewable that, unlike variable renewable energy (solar
and wind), can stably generate power with minimald. Nuclear Power Generation

Total nuclear power generating capacity at the end of fiscal
2021 was 33.1 GW (33 units, excluding 3 under constructionand 24 scheduled for decommissioning). Ten nuclear
reactors (all PWRs) have resumed operation as of September
2022 (see “Nuclear Power Generation” in Section 2, Chapter II).

35

The Electric Power Industry in Japan 2023

(2) Future Plans
a. Transition of Power Generating Capacity and Power
Development Plans

In March 2022, OCCTO published the “Aggregation ofElectricity Supply Plans for FY2022.”4 Figure 4.4 shows thetrends in generating capacity by power source, and Table 4.1
shows the breakdown of power development plans up to
the end of fiscal 2031 (new installation, uprating/derating,and retirement plans).5
Looking forward, coal-fired generating capacity will trend
upward overall as construction of new plants will outweighongoing decommissioning. As the global trend to reduce
GHG emissions continues, however, the withdrawal of plansfor new coal-fired power plants and the shift to gas-fired
power plants are observed in Japan. Decommissioning ofoil-fired power plants will continue and their generating
capacity will shrink. Note that net gas-fired generating
capacity will increase because the number of new gas-fired
power plant construction projects exceeds the number ofdecommissionings. While renewable generating capacity
will increase driven by construction of new solar power
plants and wind farms, hydro power generating capacity will
increase only marginally.
b. Actions toward Achieving Carbon Neutrality in 2050

The Sixth Strategic Energy Plan (see “1. Strategic Energy Plan” in
Chapter II) adopted by the government in October 2021 callsfor efforts to steadily advance decarbonization through theuse of currently practical decarbonized electricity (such as
power generated from renewable or nuclear energy), and forthe pursuit of innovation in areas such as hydrogen/ammonia power generation, and thermal power generation
founded on carbon storage and reuse through CCUS andcarbon recycling.
• Hydrogen and Ammonia
Hydrogen and ammonia will be used as fuels for thermal
power generation. These fuels do not release CO2 when
combusted, and thermal power generation with them offers
balancing and inertial functionalities, thereby contributing
to stable grid operation. Moreover, many types of existing
equipment can continue to be used without modification or
replacement. Because of these advantages, hydrogen/ammonia firing is seen as an effective choice among the setof power generation options for achieving carbon neutrality.
Accordingly, Japan will seek to overcome various
technological obstacles so that hydrogen and ammonia
power generation can play a key role in the supply and36

balancing capacities of the electric power system in 2050. A
goal has been set to introduce and promote 30% hydrogenco-firing with gas, 100% hydrogen firing, and 20% ammonia
co-firing with coal by 2030.
Regarding hydrogen, METI formulated a “Strategic Roadmap
for Hydrogen and Fuel Cells” in March 2019. Among othergoals, this plan aims to commercialize hydrogen power
generation by around 2030, and calls for efforts to establish
the technologies needed and to reduce the production costof hydrogen. It also seeks to make hydrogen power
generation as cost competitive as existing LNG-fired power
generation, including with regard to environmental value.6• CCUS and Carbon Recycling
Looking at carbon capture and storage (CCS) technologies, agovernment-led project has been carrying out large-scaledemonstration testing toward commercialization of CCS.
Testing began in 2016 with a CO2 injection rate of 100,000 t/
year, reaching a total of 300,000 t in 2019.
Regarding carbon recycling, METI formulated a “Roadmap
for Carbon Recycling Technologies” in June 2019. This statesthat CO2 emissions can be reduced by recycling CO2 in waysthat capture CO2 from the exhaust gas generated by power
plants and other emission sources and combine it with“clean” hydrogen produced by surplus variable renewableenergy to synthesize fuel (such as methane). Using fuelproduced from clean hydrogen at thermal power plants is
also expected to reduce CO2 emissions from thermal power
plants.
• Storage Batteries
METI is also seeking to further expand the adoption ofrenewable energy7 by using storage batteries and othertechnologies to address the power output fluctuations
associated with intermittent renewables.
The use of battery storage systems is rising. A cumulative
total of over 620,000 stationary lithium-ion battery storage
systems with a capacity in excess of 4.4 GWh were in use in
fiscal 2021 (see Figure 4.5). Meanwhile, METI is conducting
experimental projects using battery storage systems.
Themes selected for these projects include the adoption oflarge-scale electricity storage systems for grid stabilization
against variable renewable power and the development of
virtual power plants using customer-side energy resources(such as battery storage system and demand response). An
example of the kinds of projects underway is that being

4 A
 ll electricity utilities are annually required to submit to the national government (via OCCTO) a supply plan that maps out their supply of electricity
and development of power sources and transmission lines over the ensuing 10 years.
5 Aggregated including facilities for which the date of commercial operation is “uncertain.”IV. E L E C T R I C P O W E R FA C I L I T I E S

Trends in Generating Capacity by Power Source, 2021–2031 (*1)

Generating capacity [GW]

Conventional hydroPumped storage hydro

Coal

LNG

Figure 4.4

Oil and others (*2)

Nuclear

Wind

Solar

Others

2.5%

350

2.5%

2.2%
300

1.7%

1.5%

26.1%

24.3%

21.6%

20.8%
250

2.6%

4.5%

3.0%

10.5%

10.3%

9.8%

9.4%

200

9.2%

8.3%

5.6%

5.3%

150

24.8%

24.4%

24.5%

23.5%

15.4%

15.8%

15.5%

14.8%

8.7%

8.6%

8.2%

7.8%

6.9%

6.8%

6.5%

6.2%

2021

2022

2026

2031

100

50

0

*1 Generating capacity is the sum of the values submitted by electricity utilities.
*2 “Oil and others” includes the total installed capacities from oil, LPG, and other gas andbituminous mixture fired capacities.

Source: OCCTO, “Aggregation of Electricity Supply Plans for FY2022”

Power Development Plans up to FY 2031 by Stages

Table 4.1

		Power source

Hydro

Conventional
Pumped storage

Thermal

New installation plan

Updating/derating plan

OutputSites

OutputSites

OutputSites

Output

446

68

60

43

-193

35

313

446

68

60

43

-193

35

313

–

–

–

–

–

–

–

11,99528

1-11,729

37

273

7

Retirement plan

Total

Coal

4,820

7

–

–

-288

2

4,532

LNG

7,149

15

7

1

-2,168

6

4,988

Oil

26

6

–

–

-9,27329-9,247

10,180

7

152

1

0

0

10,332

10,458

376

-6

2

-810

64

9,642

NuclearRenewables[Output: MW]

Wind

3,636

89

–

–

-650

52

2,986

Solar

5,102

241

–

–

-2

1

5,100

Geothermal

75

5

–

–

-50

1

25

Biomass

1,583

37

–

–

-48

3

1,535

Waste

62

4

-6

2

-63

7

-7

Total

33,078

479

213

47

-12,734

136

20,561

Note: Decimals have been rounded off, so the figures for some items may not add up to the total listed.

Source: OCCTO, “Aggregation of Electricity Supply Plans, FY2022”

6 The plan aims to reduce the cost of hydrogen delivered from plants to 30 yen/Nm3 in around 2030 and to 20 yen/Nm3 thereafter.
7 The Sixth Strategic Energy Plan sets a target of 36%–38% for renewables’ contribution to the power generation mix in 2030.

37

The Electric Power Industry in Japan 2023

1,200

Figure 4.5

5,000

Second half of fiscal year

4,426First half of fiscal year
Total shipped capacity

1,000

972
885
814 3,453

800

499

497

3,000

458

2,568

600

439

2,000

1,754

400

315
180 694

200

117

70

0

4,000

capacity(MWh)Total Total
shippedcapacity[MWh]Shipped capacity [MWh]Shipped capacity (MWh)Trend in Shipped Capacity of Stationary Lithium-Ion Battery Storage Systems

84

12 12 82 45

FY2011

199
25

FY201260
57

FY2013

379

177

932

133

102
78

FY2014

238

1,257

138

FY2015

325

313

199

105

125

FY2016FY2017

376

427

474

1,000

185

0

FY2018FY2019 FY2020

FY2021

Source: Compiled from the Japan Electrical Manufacturers’ Association, "Self-reported Statistics on Stationary Lithium-Ion Storage Battery Systems” (FY2021).

conducted at the Buzen battery substation by Kyushu
Electric Power Co. using NAS batteries. This commenced
with the installation of NAS batteries with an output of 50
MW and capacity of 300 MWh in fiscal 2016, and it has
demonstrated the possibility of avoiding solar power
curtailment up to 300 MWh per day.

(3) Digitalization in the Power Generation Sector
The power generation sector is developing digitaltechnology-driven methods of data analysis and forecasting
to answer various challenges and needs, including reductionof the power generation costs and environmental impact offacility operation and labor-saving approaches to equipment
maintenance. For example, a former general electricity utility
teamed up with an IT firm and a power plant builder tocreate an AI-enhanced combustion adjustment model at athermal power plant. The model achieved reductions in NOx
emissions and fuel costs compared with human operation.

38

2. T
 ransmission and Distribution
Facilities(1) Transmission Facilities
Japan’s bulk transmission systems comprise 500 kV, 275 kV,
220 kV, 187 kV, and 132 kV transmission lines. The maximum
transmission voltage is 500 kV for the 10 general electricity
transmission and distribution utilities except Okinawa
Electric Power Co. (132 kV). As of the end of March 2022,
these transmission lines had a circuit length of 179,922 km(Table 4.2).
Japan’s three major metropolitan areas, Tokyo, Osaka andNagoya, are served by bulk transmission systems comprising
500 kV multiple outer ring transmission lines surrounding
demand areas with additional transmission lines for demandareas connected to the rings in a radial pattern. In the Tokyo
Metropolitan Region, TEPCO Power Grid, Inc. has constructedtransmission lines designed to handle up to 1,000 kV as athird outer ring, which is currently operating at 500 kV, inorder to accommodate the large-scale grid expansions

IV. E L E C T R I C P O W E R FA C I L I T I E STransmission and Distribution Facilities
1975

1985

Table 4.2

1995

2005

2015

2017

2018

2019

2020

2021

Circuit length of transmission lines [km]220kV or above

14,16723,48629,10735,20936,94936,86536,98637,021

37,216

37,205110kV Under 220kV

28,91335,10636,95235,96235,58835,45935,39035,44135,45735,431

Under 110kV

69,361

78,66088,64895,176106,167

106,341

106,494

106,784

107,058

107,286

Total

112,441

137,252

154,707

166,347

178,704

178,665

178,870

179,246

179,731

179,922

Transformation facility capacities
Substation output capacity (MVA)

234,748447,866

657,536

778,740

833,112

843,886

846,638

850,313868,556

872,552

Total Number of substations

3,466

5,152

5,814

6,570

6,718

6,774

6,783

6,786

7,137

7,125

Circuit length of distribution lines [km]Overhead

2,623,787 3,179,970 3,661,963 3,918,743 4,005,974 4,023,882 4,031,278 4,038,426 4,046,028 4,052,015
14,358UndergroundTotal

25,34850,371

65,28770,73372,096

72,73573,42073,99574,494

2,638,145 3,205,318 3,712,334 3,984,030 4,076,707 4,095,978 4,104,013 4,111,846 4,120,023 4,126,509
Source: FEPC, “Electricity Statistics Information”

expected to accompany the future decentralization or
centralization of power source locations. Ultra-high voltage
underground transmission cables (500 kV, 275 kV, 220 kV and
187 kV) are also being installed to enhance the reliability ofthe power supply to the central districts of large cities.
DC transmission lines are used in limited areas such as forthe interconnections between Hokkaido and Honshu (tworoutes), and between Kansai and Shikoku.

(2) Substation Facilities
As of the end of March 2022, Japan’s ten general electricity
transmission and distribution utilities had 7,125 substations
with a total installed capacity of 872,552 MVA (Table 4.2).
Almost all substations are now unmanned, with remotemonitoring and control.
It is difficult to find additional sites for substations in urban
areas because of the heavy concentration of commercial
establishments and residences. To address this challenge,
general electricity transmission and distribution utilities are
reducing their footprints with the use of gas insulated
switchgear (GIS) and are installing substations beneath officebuildings, schools, and other existing structures.

(3) Distribution Facilities
Distribution lines are classified into extra-high voltage lines(33/22 kV), high voltage lines (6kV), and low voltage lines(200/100 V), and the standard for high voltage distribution
systems is the 6 kV multi-divided, multi-connected system.
In densely populated areas, electricity is supplied via extrahigh voltage lines to prevent equipment congestion andimprove supply reliability, and spot network systems areused to meet the needs of customers who requireparticularly reliable supplies. Normally, electricity is supplied
to low voltage customers through 100/200 V single-phase
three-wire or 200 V three-phase three-wire systems. Low
voltage distribution lines are thus generally installed inthree-phase four-wire open-delta connection distribution
systems used to supply both single-phase and three-phasepower. As of the end of March 2022, the total length of
distribution lines in Japan was 4,126,509 km. Of this, 74,494
km (approximately 1.8%) consisted of underground lines(Table 4.2).
Efforts to improve supply reliability and operating efficiency
in the distribution sector include the widespread use of
distribution automation systems for remote supervision andautomatic control of distribution equipment. In response to
the recent growth of distributed energy sources, switches

39

The Electric Power Industry in Japan 2023

(4) Supply Reliability (SAIDI, SAIFI)

with sensors and static automatic voltage regulators (such as
STATCOMs) are increasingly being installed in distribution
networks in order to maintain supply reliability and power
quality.

Supply reliability is being kept high compared tointernational standards by conducting patrols to prevent
outages in advance as well as by developing high voltage
distribution network facilities as outlined above. Since the1990s, a high level of supply reliability has been maintained
except for major disasters such as the Great East Japan
Earthquake (see Figure 4.6).

Smart meters for customers have also been installed in orderto (1) facilitate meter reading by general electricity
transmission and distribution utilities, (2) track individual
customers’ electricity usage so as to facilitate power-saving
measures, and (3) provide a means of limiting power
consumption when the supply and demand balance is tight.
All extra-high voltage and high voltage customers and91.1% of low voltage customers (including households) had
been provided with smart meters as of the end of March
2022. All customers should have smart meters by the end of
March 2025.

In fiscal 2020, the System Average Interruption Frequency
Index (SAIFI) was 0.17 interruptions and the System Average
Interruption Duration Index (SAIDI) was 27 minutes (see Figure4.6). The national averages were lower than in fiscal 2019 despite
power outages that occurred in Kyushu, Chugoku, and Shikoku
due to Typhoon Haishen (No. 10) in September 2020 (approx.
530,000 households were without power at the peak, andservice was completely restored 60 hours after the peak).

SAIFI and SAIDI Trends[events]
7●

Figure 4.6

SAIFI and SAIDI (Total for 10 electric power companies)[min.]
700

701 min.
[Affected by Great East Japan Earthquake]
6600

514 min.

Duration (right scale)4.85 events

5500

Frequency (left scale)
4400[Affected by earthquake
and typhoons]
3300[Affected by Typhoon Mireille (No.19)][Affected by typhoons, etc.]

187 min.
2

169 min.

128 min.

1.36 events

33 min.
0.35 events

0

1966

1970

1975

1980

Note: 9 electric power companies up to FY1988

40

1985

1990

200

79 min.

0.90 events
0.51 events

1

225 min.

88 min.

0.94 events
0.22 events
14 min.

14 min.
10 min.
0.20 events
0.18 events

1995

2000

20 min.

0.33 events
0.13 events

2005

0.31
events0.16
events2010

2015

27 min.
100

0.17
events
0

2020
(FY)

Source: FEPC, “INFOBASE 2021” (2021)

IV. E L E C T R I C P O W E R FA C I L I T I E S

Removing snow from power lines (Hokkaido Electric Power Network)

Assist Arms (Hokuriku Electric Power T&D)
Hokuriku Electric Power T&D has been working with universities andmanufacturers to develop “Assist Arm” robots for use by power distribution
workers. In the near future, these will reduce labor requirements and improve
efficiency by automating some work.

(5) Efforts to Improve Resilience and Increase
Use of Renewables in Power Transmission
and Distribution Sectorb. Enhancement of transmission/distribution grid resilience

It has become imperative to secure an electrical power
supply system that is tailored to the expanded use ofrenewables and is capable of swift recovery from typhoons,
torrential rains, and other natural disasters that have become
more frequent in recent years. To address this need, the Act
for Establishing Energy Supply Resilience was enacted inJune 2020 to partially revise the Electricity Business Act andother legislation with the aim of securing a resilient andsustainable power supply system through measures
supporting rapid disaster recovery, facilitated investment intransmission/distribution grids, increased implementation ofrenewables, and other enhancements.
The provisions of the act that pertain to the electricity
business can be largely divided into the following threeareas of action.
a.Enhancing inter-business collaboration in disaster
responses• Require general electricity transmission and distribution
utilities to formulate action plans for collaboration during
disasters, and to update local governments and otherauthorities on the status of power supply service during
disaster recovery.
• Create a mutual assistance system in which generalelectricity transmission and distribution utilities
accumulate in advance the costs related to temporary
recovery, etc. and general electricity transmission anddistribution utilities that incur damage from a disastercan receive the costs.

• Add to OCCTO’s functions the duty to formulate forwardlooking plans for development of cross-regional
networks (a “push” approach to development).
• Require general electricity transmission and distribution
utilities to carry out planned upgrades of existing
facilities.
• Establish a wheeling rate system that would encourage
electricity transmission and distribution utilities topursue cost efficiencies that would keep them below therevenue caps based on their investment plans andapproved by the Minister of the Economy, Trade andIndustry.
c. Establishment of disaster-resilient distributed power
supply systems• Place in law a distribution business that is able to operateregional distribution networks that include distributed
power supply systems during normal times and operate
their network independently during emergencies; also
approve independent operation of distribution networks
in cases where it would improve the stability/efficiencyof electric power supply to mountainous and otherremote regions.
• Introduce an electricity distribution licensing system tohelp newcomers enter the electricity distribution market
by enabling them to lease or take over the distribution
networks formerly operated by general electricity
transmission and distribution utilities.
The provisions for (a) and (b) were phased into effect startingin July 2020, while those for (c) went into effect in April 2022.

41

The Electric Power Industry in Japan 2023

(6) Digitalization in the Transmission andDistribution Sector
To address challenges such as aging equipment andreduced maintenance staffing, digital technologies arebeing used in the power transmission and distributionsector to streamline maintenance and inspections. For
example, general transmission/distribution utilities areseeking to shrink manpower needs and improve
maintenance techniques through the development of an“Autonomous Flight System for Transmission Line Inspection
Drones” that enables drones to autonomously follow andphotograph transmission lines, and through demonstration
projects that use imaging analysis and AI tools toautomatically detect failures from photographs of facilities.

3. Cross-Regional Operation andInterregional Interconnections(1) Cross-Regional Operation
The Japanese power grid is divided into two frequency
systems: a 50 Hz system in eastern Japan and a 60 Hz systemin western Japan8. The neighboring grids of nine of thegeneral electricity transmission and distribution utilities’service areas are connected to one another (Okinawa area isthe exception). Japan has no international interconnections.
The former general electricity utilities have worked witheach other interregionally in order to improve economic
efficiency and ensure a stable power supply by developing
optimal power sources, conducting capital investment, andexchanging power so as to benefit from differences in theirregional characteristics and demand structures. Today,
OCCTO nationally monitors conditions such as the supply/
demand situation and grid operational status, and instructs
the utilities to interregionally exchange electricity when the
supply/demand situation deteriorates. It is also reviewing
the ways that the interconnections are used.
Traditionally, electricity generation utilities have been
allowed to use these interconnections on a first-come,first-served basis. However, this model was abandoned in
October 2018, and an implicit-auction approach wasintroduced under which, in principle, use of theinterconnections will be assigned based on contracts
concluded in the spot market for next-day delivery. The
introduction of these new rules should expand the use of
the interconnections by new market participants and put inplace a fair and competitive environment. At the same time,by implementing power generation based on cross-regional
merit orders, it is hoped that increases in electricity rates canbe held to a minimum and additional business opportunities
created for operators.

Power distribution equipment (Okinawa Electric Power Co.)
Maintenance work in preparation for a typhoon

42

Prior to the legal separation of electricity generation andtransmission into different sectors, the principle was forelectricity utilities to independently operate their own grids,
and they essentially balanced supply and demand
fluctuations in their grids with their own electricity.
Following the separation, it also had been the rule forgeneral electricity transmission and distribution utilities toadjust the supply and demand fluctuations in their service
areas, with load fluctuations in their grids balanced using
electricity acquired from their service areas, in principle.

8 The frequency difference is said to date back to 1896, when 50 Hz German-made power generation equipment was introduced in eastern Japan and
60 Hz U.S.-made equipment in western Japan.

IV. E L E C T R I C P O W E R FA C I L I T I E S

National Grid Connections

Figure 4.7

Hokkaido area

• The figures for each area are the forecasted transmission-end peak load 3-day averages for fiscal 2022.
• The figures for each interconnection are the average daily operating capacities (annual plan) of August 2022.

4,170 MW

Frequency converter→

Connection between
Hokkaido and Honshu
900 MW [300MW]
900 MW [300MW]→

AC/DC converter→ 4,550 MW→

230 MW

2,780 MW

→1,500 MW

1,900 MW

Hida Shinano F.C.

27,390 MW

Hida Shinano F.C.

Chubu area→

Connection between
Kansai and Shikoku→ 1,400 MW

Chubu-Kansai
interconnection→ 2,500 MW→

1,160 MWTokyo area
53,790 MW

Tohoku-Tokyo interconnection• OCCTO plans to increase
operating capacity by 4,550 MW(to be completed in FY2027).

Sakuma F.C.
Higashi Shimizu F.C.

Connection between Tokyo and Chubu→ 2,100 MW

1,400 MW→Figures in brackets indicate minimum operating capacity during work involving
a deactivation of electric power system facilities.

Shin Shinano F.C.

→

→

→

24,850 MW

4,940 MW→Kansai area

Chugoku-Shikoku
interconnection

Shikoku area
1,540 MW2,360 MW
[5,090 MW]→

10,470 MW

1,200 MW 1,200 MW

Okinawa area

Tohoku-Tokyo interconnection

300 MW
300 MW→

15,350 MW

13,060 MW

4,950 MW

Connection between
Chubu and Hokuriku

Chugoku area
Kyushu area

Tohoku area

Hokuriku area→

→ 2,470 MW

Hokuriku-Kansai
interconnection→

Kansai-Chugoku
interconnection

Chugoku-Kyushu
interconnection

2,100 MW

Connection between Tokyo and Chubu (2,100 MW → 3,000 MW)• OCCTO plans to add another 900 MW and TEPCO Power Grid, Inc., Chubu Electric Power Grid Co., Inc., and
J-POWER Transmission Network Co., Ltd. are preparing to commence construction (to be completed in FY2027).

Source: Compiled by the authors from Agency for Natural Resources and Energy, “Detailed Design for Constructing a Sustainable Electric Power System” (2020),
and OCCTO, “Grid Operating Capacity in FY2021–2030 (Annual & Long-term)” (2022)

Subsequently, the general electricity transmission anddistribution utilities (excluding Okinawa Electric Power
Company) established a balancing market in April 2021 to
improve the efficiency of supply and demand management.
As a result, the utilities can use this market to procurebalancing capacity from sources across the country, rather
than just from their own supply areas.

Hokuriku area, Kansai area, Chugoku area, Shikoku area andKyushu area are linked by 500 kV AC transmission lines.
Okinawa is not connected with other regions of Japan.

(2) Interregional Interconnections

DC lines are used by Chubu area and Hokuriku area, which
are connected by back-to-back DC linkage facilities (300MW), and by Kansai area and Shikoku area, which are linked
by ±500 kV DC submarine cables (currently operated at±250 kV) that span the Kii Channel.

As of 2022, the interregional interconnections in operation
are mainly AC transmission lines. In the eastern region (50Hz), Tokyo area and Tohoku area are linked by 500 kV ACtransmission lines, while Tohoku area and Hokkaido area arelinked by DC submarine cables that span the approximately
20 km strait between Honshu and Hokkaido. Tohoku areaand Hokkaido area are connected via two ±250 kV links (600
MW, 300 MW). In the western region (60 Hz), Chubu area,

The 50 Hz and 60 Hz systems are linked by fourinterconnections (totaling 2,100 MW) between the Tokyo
area and Chubu area networks: Sakuma Frequency
Converter (300 MW), Shin-Shinano Frequency Converter(600 MW), Higashi-Shimizu Frequency Converter (300 MW),and a new addition, Hida-Shinano Frequency Converter (900MW), which began operating in March 2021 (see Figure 4.7).

43

The Electric Power Industry in Japan 2023

Along with the increasing large-scale adoption of distributed
energy sources in recent years, OCCTO has been consideringplans to enhance these interconnections, taking into accountthe individual utilities’ views. As part of those plans, theSakuma and Higashi-Shimizu frequency converters’ capacity
will be expanded by a total of 900 MW by the end of fiscal
2027 (from 2.1 GW to 3.0 GW in total). Responding to callsfrom IPPs and others, OCCTO plans to increase the capacity of
the Tokyo-Tohoku interconnection by 4.6 GW by fiscal 2027.

from the power sources as they are made, to a “push”
approach in which systematic development is carried out
based on the master plan, with consideration given to thepotential of each power source.
Premised on this, OCCTO has developed an approach totransmission and distribution facility development that
tailors the “connect and manage” 9 model already used in the
United Kingdom and elsewhere to Japanese conditions. It
employs the following three mechanisms.

(3) Medium- and Long-range Grid Improvements
OCCTO is required to develop a long-term policy that sets a
course for developing and updating Japan’s cross-regional
interconnection systems on a nationwide scale. In thisprocess it has identified the following three key issues forfacility formation over the mid- and long-term.
• Growth in electricity demand is slowing.
• If new interconnection needs are to be addressed throughthe conventional approach to facility formation and griduse, it will require a huge increase in transmission anddistribution facilities.
• This will result in a decreased capacity factor fortransmission and distribution facilities, with inevitable
upward pressure on wheeling charges.
Also, to support the achievement of Japan’s goal of
becoming carbon neutral in 2050, which was announced by
the government in 2020, the general electricity transmission
and distribution utilities are advancing efforts to develop a
more resilient electric power network.
In the area of grid strengthening, OCCTO is working out amaster plan to be issued in March 2023 as a cross-regional
network development framework for systematic
implementation of facility expansions to interregional
interconnections and main grids. Under the master plan, thetransition to systematic development of the powertransmission network will involve a shift from a “pull”
approach, where planning is done in response to requests

44

a. Rationalization of estimated power flow

This is an approach for calculating the available capacity oftransmission lines based on estimates that closely resemble
actual use, rather than on full-capacity operation of all
power sources. This method has been in full use since April
2018.
b. N-1 inter-trip scheme

This scheme, which is applicable to new power sources
connecting to grids, is a method of instantly limiting theirpower output to secure stable transmission capacity in theevent of N-1 failure.10 Rollout began in October 2018 withapplication to power sources connecting to extra-high or
higher voltage grids. In July 2022, the scheme started to be
applied to all power sources, including existing ones, toprovide a mechanism for expanding operational capacity.
c. Non-firm accessThis is a method of allowing fresh access on condition that
output is limited while other power sources are in
operation.11 This has already been put into practice since
January 2021 for main grids without available capacity, andfor local grids and distribution grids connecting to the main
grid. In April 2022, it started being applied, regardless of
capacity availability on the other end of the interconnection,
to power sources with main grid-class receiving voltage thathave undergone an interconnection study.

9 This is a model for answering the interconnection needs of new power sources, while improving the efficiency of transmission and distribution
facilities through maximum utilization of existing facilities.
10 A single fault affecting one transmission or distribution line, one transformer, one generator, or one other item of electrical equipment.
11 Since this approach does not require expansion of main grid facilities, it enables power sources to access transmission and distribution lines
without having to construct additional facilities.

V. RETAIL BUSINESS AND TRADING MARKETS

1. Electricity Rates(1) Regulated Electricity Rates
Up until full liberalization of the retail electricity market in
April 2016, general electricity utilities supplied electricity tocustomers covered by rate regulations with the approval of
the Minister of Economy, Trade and Industry at rates basedon standard electricity use and at rates assuming use ofelectricity in a manner that contributed to load leveling, etc.
The standard rates for households have remained regulated
since full liberalization in order to protect customers. As of
April 2022, 46.99 million low voltage customers (68% of thetotal) paid regulated rates.
Regulated rates were originally to be discontinued at

the end of March 2020. However, as competition had
not developed sufficiently, METI decided in July 2019to maintain regulated rates from April 2020 onwards.
Discontinuation of regulated rates will continue to beconsidered, while paying close attention to developments at
Tokyo Electric Power Company Holdings and Kansai ElectricPower Co., which have comparatively more residential
switchers.
a. Two-Component Rates

The electricity rates charged when former generalelectricity utilities supply electricity to customers that
selected regulated rates consist of two components: a basic
rate that is determined according to the type of service
agreement, and a consumption-based rate that is calculated
based on the amount of electricity used (Table 5.1). The

Arrangements to Bridge the Transition to Competitive Rates

Customers with demand under 50 kW

Customers with demand of
50 kW or greater

From April 2005
Customers supplied at
deregulated rates set by
PPSs and utilities otherthan general electricity
utilities
Customers supplied at
deregulated rates set bygeneral electricity
utilities

Customers
supplied underprovisions forlast-resort
service bygeneralelectricity
utilities

Customers supplied atcompetitive rates set by
PPSs and former generalelectricity utilities

Customers supplied atcompetitive rates set byformer generalelectricity utilities

Measures aspart of generalelectricity
utilities’ supply
obligations

Customers supplied atcompetitive rates set byformer generalelectricity utilities
Customers supplied under
the provisions oftransitional measures(regulated rates) by former
general electricity utilities

Last-resort service

Post completion of transitional measures(full deregulation of retail rates)

Customers
supplied underprovisions forlast-resort
service under
the new system

Customers supplied atcompetitive rates set by
PPSs and former generalelectricity utilities

Customers supplied underoptional supply provisions bygeneral electricity utilities

Customers supplied
under supply provisions
by general electricity
utilities

From April 2016

Figure 5.1

Customers supplied at
deregulated rates
Measures as partof the supply
obligations
imposed onformer generalelectricity utilities
as a transitional
measureLast-resort service

Customers
supplied underprovisions forlast-resort
service under
new system

Last-resort service
Source: Agency for Natural Resources and Energy website

45

The Electric Power Industry in Japan 2023

Two-Component Rates Structure

Table 5.1

Electricity rate = basic rate + unit electricity rate × electricity consumption ± fuel cost adjustment
× electricity consumption + surcharges to encourage renewable energy generation
× electricity consumption
Source: FEPC website

months in order to level rate fluctuations, and fuel pricethree-month averages are reflected in the electricity rates
charged each month (see Figure 5.2). Also, as a measure
for reducing the impact of large fuel price increases oncustomers, a cap is set on upward adjustments of theautomatically adjusted rate (standard fuel price + 50%).

consumption-based component of the regulated rates paidby households is further divided into three tiers in order
to, among other things, encourage energy conservation,
which has been promoted since the first OPEC oil embargo.
A relatively lower unit rate is charged for the first tier, which
covers consumption up to the 120 kWh that is considerednecessary for daily life. The unit rate for the second tierreflects the average supply cost, and a slightly higher unit
rate is charged for the third tier. There is also a regulated ratethat applies mainly to small factories.

c. Feed-in Tariff Scheme for Renewable Energy

A system of purchasing surplus electric power generated
by solar power systems was introduced in 2009. In 2012,
the scope of sources covered was expanded and former
general electricity utilities were required to purchaseelectricity generated using renewable resources (solar, wind,hydroelectric, geothermal, and biomass) at a fixed price for acertain period (under the current system, general electricity
transmission and distribution utilities do the purchasing).
In April 2022, a “feed-in premium” system that pays apremium (the difference of the market power price and astandard price) was launched for large-scale commercial
solar or wind power sources, which are expected to
evolve into competitive power sources in the future. The
cost of purchase is recovered via a surcharge calculatedb. Fuel-Cost Adjustment Scheme

A fuel-cost adjustment scheme was introduced in January
1996 in order to externalize the effects of fuel prices andexchange rates, which are beyond the control of generalelectricity utilities in their efforts to enhance efficiency, andthus reflect the changes in rates as expediently as possible
and to stabilize the general electricity utilities’ management
environment.
At present, the period (time gap) before fuel pricefluctuations is reflected in electricity prices is set to two

Fuel-Cost Adjustment Timing (Example: June, July, August)
Jan.

Feb.

Mar.

Apr.

May

2 months later

Period for calculation of
average fuel cost

Period for calculation of
average fuel cost

Period for calculation of
average fuel cost

Figure 5.2

June

July

Aug.

Sep.

Application of fuel costadjustment unit price

2 months later

Application of fuel costadjustment unit price

2 months later

Application of fuel costadjustment unit priceSource: Compiled from FEPC materials

46

V. R E TA I L B U S I N E S S A N D T R A D I N G M A R K E T S

again risen due to the increased cost of generating powerat thermal power plants resulting from the shutdown ofnuclear power plants and escalating fuel prices. Electricity
rates fell from 2015 due to lower fuel costs, but began risingagain in 2017, and then started declining again in fiscal
2019 (see Figure 5.3). The rates climbed in fiscal 2021 due toskyrocketing fuel prices.

in proportion to the volume of use by customers that
constitutes one component of electricity rates (see“Renewable Energy” in Section 3, Chapter II).

(2) Unregulated Rates
Liberalization of retail supply to extra-high voltage customers
commenced in April 2000. Coverage was progressively
expanded, and full liberalization of the retail market
commenced in April 2016. Large customers’ contracts are
determined through negotiation with electricity retailers
based mainly on their planned and actual electricity usage.
In addition to being able to simply carry on paying regulated
rates for service provided by former general electricity
utilities, households and other low voltage customers canalso choose from among the unregulated rate plans offeredby former general electricity utilities and PPSs (newly enteredelectricity retailers). Former general electricity utilities
and PPSs provide a range of new rate options tailored tocustomer lifestyles based on their own sales strategies (see“Efforts to Acquire Customers” in Section 2, Chapter V).

(4) Wheeling Charges
Even in a deregulated environment, it is general electricity
transmission and distribution utilities that build, operate,
and maintain transmission and distribution networks toensure stable supply. When former general electricity utilities
and PPSs retail electricity, they must use the network of thegeneral electricity transmission and distribution utilities
that own the supply facilities in the service area concerned.
Wheeling charges are the fees imposed by transmission
and distribution utilities on the users of their network. The
wheeling charges are deliberated by a review meeting ofspecialists on electricity pricing under the auspices of theElectricity and Gas Market Surveillance Commission, taking
into account both the appropriate recovery of requisite
costs and fairness for network users. They are then opened
to public comment prior to final adoption.

(3) Trends in Unit Electricity Rates
Electricity rates in Japan climbed sharply in the 1970s andearly 1980s due to the oil crises, but subsequently entered along-term decline, owing in part to operational streamlining
efforts by the former general electricity utilities. Since theGreat East Japan Earthquake in 2011, however, rates haveSince April 2016, general electricity transmission anddistribution utilities have been required to provide electricity[yen/kWh]

Trends in Electricity Rates

Figure 5.3

30

Residential

25

Average for residential
and commercial/industrial

20

Commercial/industrial

15

10

5

0

1970

1975

1980

1985

1990

Note: Figures are totals for general electricity utilities through fiscal 2015,
and for electricity utilities from fiscal 2016.

1995

2000

2005

2010

2016

2020 [FY]

Source: Agency for Natural Resources and Energy, “FY2021 Annual Report on Energy” (2022)

47

The Electric Power Industry in Japan 2023

via a universal service for customers on isolated islands,
applying the same rate levels as on the mainland in order toprotect customers. The electric power supplied to islands ismainly generated by thermal power plants, and the cost ofprovision of universal service to islands (including the portionof the price that varies according to thermal fuel costs) is
passed on to all customers in the individual service areas ofgeneral electricity transmission and distribution utilities inquestion via wheeling charges under what is known as the“universal island service price adjustment system.”
Currently, revisions to the wheeling charge system arebeing developed for implementation around fiscal 2023.
The discussions include detailed design of a new schemethat would set revenue caps at certain intervals on generalelectricity transmission and distribution utilities based on
their investment plans and other considerations, with theaim of encouraging them to make the operational efficiency
improvements needed to keep their business sustainable
under the revenue caps. The purpose of the scheme is tohelp general electricity transmission and distribution utilities
make the necessary investments while also achieving
cost efficiencies, and in doing so advance the growth ofrenewables into the main energy source and strengthen
resilience.

(5) Fee on the Power Generation Side
Under the current system, the expenses associated with
Under the current system, the expenses associated withpower transmission and distribution equipment are, as arule, borne by electricity retailers as part of the wheelingcharges. However, the government has been considering
introducing a new scheme that would seek to realize fair
and appropriate cost sharing, promote efficient use oftransmission and distribution networks, and encourage
electricity generation utilities to pursue businessdevelopment in a manner mindful of network costs. To dothis, the scheme would also have power generation-side
operators, as grid users, bear some of the costs, with theirshare based on their level of revenue. The Strategic Energy
Plan indicated that further discussion would be pursued onlevying such a fee, including with regard to whether it wasnecessary. However, the details of this scheme are alreadybeing worked out, with an eye on launching it in fiscal 2024.

(6) Impact of Increases in Fuel Prices andWholesale Electricity Market Prices
Fuel prices and wholesale electricity market prices havebeen rising steeply since early fall of 2021, placing electricity

48

retailers in a tight squeeze. Fourteen PPSs filed for bankruptcy
in fiscal 2021, the largest number to date for a single year. Of
the roughly 700 PPSs operating as of April 2021, 31 (approx.
4%) became insolvent, closed down, or left the market during
the past year. Moreover, many PPSs and former generalelectricity utilities have stopped taking new contracts for theunregulated high-voltage rate plans. As a result, customers
looking for a new provider have increasingly turned toward
final guaranteed supply contracts. The number of thesecontracts began surging upward in March 2022, rising to
13,000 as of May 20. Also, Chubu Electric Power Company
appears headed toward a rate hike for household service
in October 2022, and it is likely that the rates of all former
general electricity utilities will reach the cap set by the fuelcost adjustment scheme.
As originally conceived, final guaranteed supply contractsfunction as a safety net for high-voltage contracts, offering
service at rates around 20% above the standard plans set
by the former general electricity utilities, and were notintended to be long-term contracts. However, in some cases,
these contracts have become cheaper than unregulated
rate plans as utilities have sought to counter the sharp risein fuel prices by reflecting power procurement costs in theunregulated rates. As a result, customers have been shifting
to the lower final guaranteed supply rates. In response,
METI has decided to implement a scheme whereby acorrection linked to wholesale electricity market prices will
be added to final guaranteed supply rates. The correction is
calculated as the sum of the area price (including loss rateand consumption tax) and the wheeling metered charge
unit price, less the current final guaranteed supply meteredcharge unit price (including fuel-cost adjustment). This will
be put into effect by the general electricity transmission anddistribution utilities in September 2022.

2. Efforts to Acquire Customers(1) Number of Registered Electricity Retailers,and PPS ShareThe number of registered electricity retailers has continued
to rise since the full liberalization of the retail electricity
market in April 2016, reaching 738 retailers as of July 2022.
As of March 2022, PPSs accounted for a roughly 21.3%
share of the total volume of electricity sold. Of that share,approximately 23.4% was made up by sales to households

V. R E TA I L B U S I N E S S A N D T R A D I N G M A R K E T S

and other low voltage customers (see Figure 5.4). Here, PPSs
include electricity retailers that newly entered the market(other than the former general electricity utilities), andsubsidiaries of the former general electricity utilities. The
former general electricity utilities’ retail sales outside theirestablished service areas contributed 2.6% to the total.

customers with customer services and so on through rateplans tailored to customers’ needs and lifestyles, 100%
renewable energy plans that add environmental value toelectricity, point-based loyalty programs, and membershipwebsites. Services that utilize information on electricity
usage obtained from smart meters are also emerging.

(2) Activities of Electricity Retailers

a. Rate Plans Tailored to Lifestyles

Electricity retailers supply extra-high voltage and highvoltage customers in accordance with contracts and unit
prices negotiated on the basis of projected electricity
usage and actual circumstances. Former general electricity
utilities are working to strengthen their business capacity
by establishing specialized marketing operations, increasing
personnel to take charge of business for corporate
customers, and implementing business training. For
example, they have assigned a dedicated business manager
for each customer and increased the frequency of customer
contact so that the customer’s needs can be suitably met. In
addition, they are diagnosing and analyzing the customer’s
energy usage, and making proactive proposals to theircustomers regarding the efficient use of energy.

Electricity retailers are offering time-of-use rate plans forcustomers who tend to be out during the day and consume
most of their electricity at night, as well as for customers
who use storage heaters and/or water heaters overnightand during off-peak hours. Such plans offer lower unit
rates for nighttime electricity use. Other options are alsoavailable. These include plans that provide discounts off thecontracted unit price as usage increases for customers who
use large amounts of electricity due to family size or pets,
and plans that offer lower rates for devising ways of using
electricity more wisely.

On the other hand, electricity retailers provide low voltage

b. Additional Services and Discounts for Bundled Goods

There are also rate plans that offer non-electricity-related
goods and services to households. These include inspectionand emergency repair of faulty electrical equipment,

PPS Share of All Electricity Sold

Figure 5.4

All voltages[%]

Extra-high voltage

High voltage

Low voltage

35.0

FY2016FY2017FY2018FY2019FY2020

FY202130.0High voltage
27.0%

25.0

Low voltage
23.4%

20.0

All voltages
21.3%

15.0

Extra-highvoltage
10.3%

10.0

5.0

7

20
17
Ju
l. 2
01
7
Oc
t.
20
17
Ja
n.
20
18
Ap
r.
20
18
Ju
l. 2
01
8
Oc
t.
20
18
Ja
n.
20
19
Ap
r.
20
19
Ju
l. 2
01
9
Oc
t.
20
19
Ja
n.
20
20
Ap
r.
20
20
Ju
l. 2
02
0
Oc
t.
20
20
Ja
n.
20
Ap 21
r.
20
21
Ju
l. 2
02
1
Oc
t.
20
21
Ja
n.
20
M
2
ar 2
.2
02
2

r.

20
1

Ap

20
16

n.
Ja

01
6

t.
Oc

l. 2
Ju

Ap

r.
2

01
6

0.0

Note: Shares are based on volume of electricity sold.

Source: Agency for Natural Resources and Energy, “Progress on Full Liberalization of the Electricity and Gas Retail Markets”

49The Electric Power Industry in Japan 2023

such as wiring faults that keep the power from turning
on. Other everyday support services include services to
identify and report water leaks, find lost keys, and check onelderly customers at home. Other plans provide discounts
for supply contracts that are bundled with cellular phone,internet, gas, automobile gasoline, and other services.
Bundling lifestyle-related commodities and services with
rate discounts in this way is expected to improve customer
satisfaction and help electricity retailers to attract and retain
customers.

(3) Rate Comparison Sites
Amid the aforementioned diversification of rate plansoffered by electricity retailers, rate comparison websites
have been launched by service providers to help customers
choose the plans that best meet their needs. Also, withthe recent stream of exits from the retail electricity market,
such websites have also been offering in-depth informationon contract procedures to customers in search of a newelectricity provider.

(4) Regulations and Guidelines
The Electricity and Gas Market Surveillance Commission
established the Guidelines Concerning the Management of
the Electricity Retail Business in January 2016. The purposeof these guidelines is to enhance protection for electricity
customers, allowing them to receive electricity withconfidence while also contributing to the healthy growthof the electricity business itself. These guidelines provide
instructions to the utilities in question, such as electricity
retailers, on how to observe relevant laws and regulations, aswell as instructions encouraging their autonomous efforts.
Specifically, the guidelines indicate desirable conduct byoperators in order to protect customers and bring about thehealthy growth of Japan’s electricity business. These include:(1) provision of appropriate information to customers, (2)suitable forms of business and contracts, (3) optimized
contract contents, (4) appropriate handling of customer
complaints and inquiries, and (5) optimized contract
cancellation procedures. The guidelines also identify
behavior which would constitute a problem under theElectricity Business Act.
These guidelines are revised as needed to reflect changes inthe electricity retail environment.

50

3. Trading Markets(1) Wholesale Electricity Market
The Japan Electric Power Exchange (JEPX) was establishedin November 2003 and commenced trading in April 2005.
The purpose of JEPX is to stimulate electricity transactions
on the exchange. Specifically, transactions will be stimulated
by offering enhanced instruments for selling and sourcing
electricity and encouraging the formation of index prices toassist assessments of investment risk, etc. Initially, JEPX wastreated as a privately operated, voluntary wholesale exchange.
Later, it was designated a wholesale electricity market under
the provisions of the Electricity Business Act in April 2016.
The principal market participants are the electricity
generation utilities and electricity retailers involved inwholesale power transactions. However, other players, suchas general electricity transmission and distribution utilities
that accept electricity under the feed-in tariff scheme,
are also involved as “special trading members” in orderto facilitate the sale and purchase of “non-fossil value,” asdescribed in a later section. Business operators such as
demand response aggregators that enter into negawatt
trading contracts with transmission and distribution utilities
have also been permitted to participate in the market since
March 2017. As of August 1, 2022, there were 259 trading
members.
JEPX currently provides a marketplace for the following
electricity transactions:• Spot market: Trading in 30-minute increments of electricity
for next-day delivery.
• Forward market: Trading in electricity for delivery over thecourse of a specified future period. Products are createdby packaging together specific periods and times, such asmonthly 24-hour products or weekly daytime products.
• Intra-day market: A market for correcting unexpected
misalignments between supply and demand occurring
between a spot market transaction and delivery (aminimum of one hour later).
• Bulletin board trading market: JEPX mediates the trading ofelectricity for prospective buyers and sellers.
The spot market is the largest of the above four markets
in trading volume and is a particularly important market.
Trading is done through a blind single-price auction system.
It is blind because participants cannot see other participants’
bids when they make their bids. A single-price system is one

V. R E TA I L B U S I N E S S A N D T R A D I N G M A R K E T S

that defines the intersections between the sell and buy bid
curves as the system price and trade volume. As a rule, highbuy bids and low sell bids are executed at the system price.

Amid the steep rise in prices, some electric powercompanies and other operators have started to cut backon add-on purchases from the spot market by leveraging
demand response to make efficient use of electricity. Due
to fuel procurement risks, supply shortages are expected
to occur throughout fiscal 2022. In response, the Agency
for Natural Resources and Energy has indicated that it will
promote demand response in collaboration with otherauthorities and the private sector.

Market fragmentation can occur due to the existence ofconstraints concerning, for example, the available capacityof connections between services areas. When market
fragmentation occurs, system prices and trade volumes arecalculated at the level of each of the fragmented markets.

(2) New Markets

The volume of trades on the spot market has been on the rise
since 2016, reaching approximately 327.2 TWh in fiscal 2021.
This means that more than 30% of all electricity sold in Japanis sold through the spot market. PPSs procure more than 80%of their electricity from the spot market. The annual averagesystem price hovered between 7 and 10 yen/kWh from fiscal
2015 to 2019, but climbed to 11.21 yen/kWh in fiscal 2020 due
to an extremely sharp price surge that was driven by a supply
crunch stemming from fuel procurement risks in winter. In
fiscal 2021 it further rose to 13.46 yen/kWh due to the effects
of reduced supply capacity from limited access to fuel, soaring
fuel prices, and an earthquake that occurred off the shore of
Fukushima Prefecture. As of July 9, 2022, it stood at 19.62 yen/kWh, and is continuing to trend upward (see Figure 5.5).

New markets have been developed to secure stable power
supply, achieve the sustainable, efficient, and equitablesupply of electricity, and actualize environmental value,
among other goals. The intention is that the creation ofthese unconventional new markets will serve to actualize
and render tradable new forms of value to accompany thelowered entry/exit barriers in existing markets. The newmarkets are mainly the following: (a) a baseload power
market, (b) a capacity market, (c) a balancing market, and (d) anon-fossil value trading market. In addition, trading has begunin the electricity futures market.

Average System Prices and Trade Volumes on the Spot Market
Total trade volume [TWh]

[TWh]

350

Figure 5.5[yen/kWh]

Avg. system price [yen/kWh]

16.51

300

312.8

13.46

13.72
250
200

9.76

9.72

9.78
8.38

11.21

208.6

14
12

9.76

10

8.46

150

18
16

292.5

14.67

14.43

327.2

8

7.93
6.52

6

100
4

58.6
50
0

3.5

5.5

4.7

7.4

10.3

12.6

15.4

23.0

3.5

2008

2009

2010

2011

2012

2013

2014

2015

2016

2

2017

2018

2019

2020

2021

0

Source: Compiled from Agency for Natural Resources and Energy, “Handbook of Electric Power Industry” (2021), and JEPX data

51

The Electric Power Industry in Japan 2023

a. Baseload Power Market

New market entrants find it difficult to own or enter
contracts to buy electricity from baseload power sources
such as coal, large hydropower, and nuclear power plants,
due to the tendency for the scale of development to grow,and the large number of bilateral contracts between largescale electricity generation utilities and former generalelectricity utilities. In order to energize competition in theretail power market, a system was created to help new
entrants access electricity produced by baseload power
plants. This was done by establishing in July 2019 a market
dedicated to the trading of electricity produced by baseload
power plants, and by institutionalizing a requirement
for large-scale electricity generation utilities (electricity
generation utilities, etc. that have a nationwide generation
capacity of 5 million kW or greater) to contribute electricity
to JEPX. Trading in this market is done at an annually
fixed price. Four auctions for delivery in fiscal 2022 wereconducted, for a total volume of 748.1 MW, with clearing
prices ranging from 9.47 to 15.69 yen/kWh. The amount ofbuy bids has been trending upward versus previous fiscal
years. Meanwhile, due to fragmentation of the market, gaps
have occurred in some areas between the clearing priceand the settlement price of the electricity contracted, andthe authorities are now considering making changes to thesystem to counter this.
b. Capacity Market

The predictability of the payback on investment in power
generation business is likely to decline, depending on theincreasing competition and changes in environmental
trends. If the adoption of renewables expands
simultaneously, it is expected that the power generation
operating rate will decline, the selling price of electricity will
fall, and revenues from selling electricity from all sources will
come down. Conversely, regulatory organizations have been
concerned that if investments in power generation capacity
are not made at the appropriate time, there could be
more situations in which the supply and demand balance
becomes too tight, and electricity balancing capacity cannot
be secured. Therefore, a capacity market was establishedin 2020 for the purpose of (1) ensuring a greater degree ofinvestment predictability, (2) the replacement of old power
plants with new ones and (3) the securing of supply capacity(installed capacity) through market mechanisms.
The capacity market is operated by OCCTO. Auctions are
conducted for securing capacity four years in advance.
Capacity traded in 2020 for delivery in fiscal 2024 amounted

52

to 167.6 GW in volume, and had a clearing price of 14,137
yen/kW, which exceeded the index price. This prompted
a drastic overhaul of the pricing method for capacity
auctioned in 2021 for delivery in 2025, with the auction
resulting in a total volume of 165.3 GW traded and market
fragmentation of the clearing price: 5,242 yen/kW in the
Hokkaido area and the Kyushu area, and 3,495 yen/kW inother areas, with all prices falling from the preceding fiscal
year. The 2022 auction will be held in November, and theresults will be announced in January 2023.
Special auctions are sometimes held in the capacity market
as a means of implementing policy measures, among otherpurposes. A special auction in the form of a long-term
decarbonization auction will be held in 2023 so that power
generation utilities can secure multiyear capacity revenues
that make it easier for them to visualize long-term returns
on initial investments in new facilities that contribute toachievement of both the 2050 carbon neutrality goal andstable supply.
c. Balancing Market

The tasks of controlling frequency and balancing supply anddemand are performed by general electricity transmission anddistribution utilities in each area. With regard to balancing, it isimportant that system operators secure the capacity requiredfor practical purposes while avoiding giving preferential
treatment to particular sources of electricity or creating too
great a cost burden. The first auction for balancing capacity washeld by general electricity transmission and distribution utilities
at the end of fiscal 2016 for fiscal 2017 (see “Securing Balancing
Capacity” in Section 3 (2), Chapter III).
Subsequently, a balancing market for procuring andoperating balancing supply and demand more efficiently
on a cross-regional basis was studied. Market trading
began in April 2021 for Replacement Reserve for FIT(balancing capacity with a response time under 45 minutesthat balances errors in renewable energy predictions
and operates continuously for three hours), and in April
2022 for Replacement Reserve (balancing capacity witha response time under 15 minutes that corrects supply/
demand imbalances resulting from errors in renewableenergy predictions or unexpected losses of power sources,and operates continuously for three hours). Trading isscheduled to begin in fiscal 2024 for Frequency Restoration
Reserve (balancing capacity with a response time under 5minutes that balances normal-time prediction errors andoperates continuously for at least 30 minutes), Synchronized

V. R E TA I L B U S I N E S S A N D T R A D I N G M A R K E T S

Frequency Restoration Reserve (balancing capacity with a
response time under 5 minutes that responds to normaltime fluctuations within the time period or losses of powersources, and operates continuously for at least 30 minutes),and Frequency Containment Reserve (balancing capacitywith a response time under 10 seconds that responds tonormal-time fluctuations within the time period or lossesof power sources, and operates continuously for at least 5
minutes).
d. Non-Fossil Value Trading Market

The wholesale electricity market makes no distinction
between fossil fuel and non-fossil fuel power generation,and there were concerns that this omission could obscure
the actual value of non-fossil power generation capacity.
It was also pointed out that it would be difficult for new
entrants to buy electricity from non-fossil fuel sources, as
they do not have enough trading experience comparedwith former general electricity utilities. Furthermore, it
was proposed that the cost of the environmental value ofelectricity derived from renewables purchased through the
FIT scheme should not have to be borne by all customers,
but instead should be borne primarily by those customers
who desire that value. As one step to help address theseconcerns, a non-fossil value trading market was establishedin the wholesale electricity market in May 2018 to isolate
non-fossil value of the electricity only and to certify it fortrading. The market initially limited buying to only electricity
retailers, and some customers voiced the desire to be able todirectly purchase non-fossil fuel value. To answer this need,
the market was divided into two markets that began tradingin November 2021: a renewable energy value trading
market in which consumers can directly participate in
trading (market dealing in FIT renewable energy certificates),
and a market for achieving the target1 mandated by theSophisticated Methods Act regarding the non-fossil shareof the power generation mix (dealing in non-FIT renewableenergy certificates). Both hold multi-price auctions, in which
all successful bidders pay the price at which they bid, andthus bidders can maximize their profits by predicting thehighest successful bid. In the most recent round (May 2022),
the clearing price (weighted average price) was 0.3 yen/kWhin the renewable energy value trading market and 0.6 yen/
kWh in the market for achieving the Act-mandated target.
In addition, there is an electricity futures market whose
purpose is to reduce electricity price fluctuation risks.
The European Energy Exchange (EEX) began trading inJapanese electricity futures on May 18, 2020, and the Tokyo
Commodities Exchange (TOCOM) commenced permanent
trading in April 2022, following a trial period that started
in 2019. As of 2022, the market’s trading volume is small incomparison with JEPX, and improvements are being studied,including with regard to future challenges.

1 The Act on Sophisticated Methods of Energy Supply Structures was established in 2009 as a regulatory framework for encouraging energy suppliers
to increase their adoption of non-fossil energy sources and to make sophisticated and effective use of non-fossil fuels. It requires electricity retailers
that annually sell 500 GWh or more to raise the non-fossil share of the electricity they sell to at least 44% in 2030.

53

The Electric Power Industry in Japan 2023

TOPICS:Electric Power Company Projects for Promoting Hydrogen
Hydrogen is expected to become an indispensable energy
source for the realization of a carbon-neutral society. As
part of the Sixth Strategic Energy Plan, approved by the
Cabinet in October 2021, the Japanese government iscalling on the electric power sector to utilize hydrogen andammonia, both of which do not emit carbon dioxide when
combusted. Electric power companies are stepping up theirefforts in this area by pursuing the use of hydrogen as a fueland building up a hydrogen supply chain, with an eye on
achieving full-scale real-world deployment in the future.

1. Utilization of Hydrogen as Fuel
(1) Tohoku Electric Power Company
Tohoku Electric Power Co. Inc. (Tohoku EPCo) is taking partin a project in Fukushima Prefecture for developing
technologies for practical hydrogen-based energy storage
and use. Other project members include Tohoku ElectricPower Network Co., Inc., Toshiba Energy Systems & Solutions
Corporation, Iwatani Corporation, and Asahi Kasei
Corporation.
The project is currently in the demonstration phase, which
will run until the end of February 2023. Work is underway toestablish technologies enabling practical hydrogen-based
power-to-gas (P2G) energy storage and use. Specifically, theproject aims to further evolve control systems (hydrogenenergy management, power grid control, and hydrogen
supply/demand forecasting systems) and water electrolysis
technology.
The site is Fukushima Hydrogen Energy Research Field(FH2R), opened by Tohoku EPCo in March 2020. Here, ahydrogen production unit in the 10-MW-class (the world’s
largest class) is being used to establish green, low-costhydrogen production technology that balances grid supply
and demand to make maximum use of highly fluctuating
output from renewable energy without using storage
batteries.
The project is largely driven by the need for a way tominimize output control while the use of renewable energy
is expanded. P2G, as a technology that realizes the large-

54

scale, long-term storage, can serve this need. However, inorder to efficiently promote hydrogen-based energy storage
and use, technologies must be established for not only agrid supply/demand balancing function that fully utilizes thehighly fluctuating output from renewable energy (demand
response), but also a function for optimal system control
through hydrogen supply/demand forecasting.
In their R&D for evolving the various control systems, theproject members are seeking to improve functionality forrealizing the use of hydrogen energy systems as a supply/
demand balancing resource. This includes adding a reversepower-flow function for solar power.
Meanwhile, the R&D for advancing water electrolysis
technology is aimed at reducing the cost of waterelectrolysis facilities through diverse approaches, such as
optimization of part/equipment replacement cycles basedon aging analysis, and review of the structure/materials ofelectrolysis cell frames for potential improvements.

(2) Tokyo Electric Power Company
TEPCO Energy Partner, Inc. is pursuing a joint project for
newly developing a small packaged P2G system as adecarbonization solution for industrial sectors where it isdifficult to electrify operations. The other collaborators are
Yamanashi Prefecture, Tomoe Shokai Co., Ltd., UCC Ueshima
Coffee Co., Ltd., and Toray Industries, Inc.
Taking place over the five years from fiscal 2021 through fiscal
2025, the project is carrying out four tasks: development ofa 500-kW PEM (polymer electrolyte membrane) P2G system
as a single package, and deployment of the system at several
sites in Japan; development of a next-generation hydrogentube trailers needed as a means of large-capacity transport
to support the wide use of hydrogen energy in the future;development of a model for “grand master” decarbonizedplants that make full use of existing facilities and hydrogenenergy; and promoting decarbonization of food processing
operations through technology that addresses challenging
applications of hydrogen energy, such as coffee bean
roasting. Since June 2021, the project has been conducting
real-world testing in Yamanashi Prefecture, producing
green hydrogen with the P2G system for use at plants,
supermarkets, and other sites.

T OPICS: Actions toward Carbon Neutralit y in 2050

Project Overview

Figure 1

PRODUCTION & STORAGE

Grid power

TRANSPORT

SUPPLY & APPLICATION

Hydrogen energy system
Tohoku EPCo & Tohoku Electric Power Network

Tohoku EPCo-operated system
Power grid control system

Power application
IwataniHydrogen supply/
demand forecasting system
Hydrogen supply/
demand forecasting
Maximum allowableadvance/delay

Supply/demand balancing
Toshiba ESS

Hydrogen energy management system

Electricity

H2

Hydrogen power
generation(fuel cells)

Mobility

Hydrogen production unit
control commands
Maximum PV generation commands

Photovoltaic (PV)Electricity

Hydrogenproduction PV-PCS
unit
Electrolyzer
Asahi Kasei

H2
H2

H2

Power market,
etc.

Hydrogenstorage

Fuel cell cars

H2
Hydrogentransport

Hydrogenstations

H2
Fuel cell buses

Demonstration System

Industrial material
H2Wind turbines
PlantsPower from renewables

This project is part of NEDO’s Development of Technologies for Realizing a Hydrogen Society program, which
comprises: development of hydrogen energy system technology; development of large-scale hydrogen-energy
utilization technology; and comprehensive investigative research.
Related authorities: Agency for Natural Resources and Energy; Ministryof Economy, Trade and Industry; Reconstruction Agency; Cabinet ofJapan; Fukushima Prefecture; Namie City

The outcomes of the project’s development work will
be further evolved as part of the Yamanashi Model, adecarbonized energy network that will use hydrogen as afuel for heating.

Project implementers: Toshiba Energy Systems & Solutions Corporation;
Tohoku Electric Power Co., Ltd.; Tohoku Electric Power Network Co., Inc.;
Iwatani Corporation; Asahi Kasei Corporation

2. C onstruction of Hydrogen/Ammonia Supply Chain(1) J-POWER(3) JERAJERA Co., Inc., which is seeking to achieve net-zero carbon
emissions across its domestic and overseas operations
by 2050, is carrying out a demonstration project with IHI
Corporation to establish technology for large-scale ammonia
co-firing. Launched in fiscal 2021, the project is taking place
at Hekinan Thermal Power Station. In May 2022, the twocompanies, recognizing that the project’s progress madeit possible to accelerate the schedule for installing burners,
tanks, pipes, and other essential equipment, decided tomove up the start of the main demonstration by one year
to fiscal 2023. This will involve large-scale co-firing using
ammonia (20% in terms of heat value) at the plant’s Unit 4.

Since 2016, Electric Power Development Co., Ltd.
(J-POWER) has been jointly running the HySTRA project for
demonstrating maritime transport and loading/unloading ofhydrogen made from brown coal using a liquefied hydrogen
carrier, together with Iwatani Corporation, Kawasaki Heavy
Industries, Ltd., Shell Japan Ltd., Marubeni Corporation,
ENEOS Corporation, and Kawasaki Kisen Kaisha, Ltd.
HySTRA, which is being conducted between Japanand Australia, is aimed at developing technologies for
manufacturing and transporting large quantities ofhydrogen, and at identifying challenges in building the
supply chain. Suiso Frontier, the world’s first liquefied

55

The Electric Power Industry in Japan 2023

Japan-Australia Supply Chain Demonstration
Latrobe brown coal fields

Gasification &refining facility

AGL Energy Limited

Construction &operation:
J-POWER

Australia: Latrobe Valley, Victoria

High-pressure
gas trailer

Figure 2

Liquefaction &loading terminal

Terminal construction: KHI
Operation: Iwatani & KHI
Approx. 150 km

Australia:
Hastings, Victoria

Liquefied hydrogen carrier

Receiving test terminal

Construction: KHI
Operation: Shell Japan(STASCO)Construction: KHI
Operation: Iwatani

Approx. 9,000 km

Japan: Kobe

• Stages in red: Elements for which HySTRA received assistance from NEDO.
• Stages in white: Elements for which the Australian consortium received assistance from the Australian and Victorian governments.

hydrogen carrier (carrying capacity: approx. 1,250 m3)
departed Japan in December 2021 and arrived in Australia
in January 2022. After taking on hydrogen produced frombrown coal, it returned to Japan in February. The hydrogen
was then unloaded to an on-land liquefied hydrogenstorage tank. Analysis of data from each operational stage
found that this demonstration was completed successfully.
As part of this project, J-POWER constructed and operated
coal gasification and gas refining plants that used brown
coal mined in Latrobe Valley.
According to a report on the project, the equipment andfacilities that were demonstrated to be safely operable
represent not only game-changing technologies for clean
energy businesses of the future, but also a step forward
toward the advent of a society where hydrogen will become
an everyday source of energy like natural gas.

(2) Chubu Electric Power Company
The Chubu region served by Chubu Electric Power Co., Inc.
is home to a wide variety of businesses. For this reason,
the company sees the region as having strong potential
for reducing CO2 emissions and expanding demandfor hydrogen, envisioning it as an ideal model area fortransforming the shape of industry and energy use, andfor reforming supply chains. In March 2022, the company
entered into the Comprehensive Cooperation Agreement for
the Realization of a Large-scale Hydrogen Society in Chubu
with the prefectures of Gifu, Aichi, and Mie, Nagoya City,
the Nagoya Chamber of Commerce & Industry, the Central
Japan Economic Federation, and the Chubu Association of

56

Corporate Executives. The purpose of the agreement is todevelop the supply chain needed for large-scale deployment
and stable use of hydrogen. In addition, a Committee for
Promoting Social Implementation of a Large-scale Hydrogen
Supply Chain in Chubu was formed to advance concrete
actions in this regard. Going forward, the partners will
engage in infrastructural development and planning for
promoting hydrogen import, storage, supply, and use.

(3) Hokuriku Electric Power Company
Hokuriku Electric Power Company joined the Japan
Hydrogen Association, which promotes hydrogen-related
global cooperation and supply chain development, in July
2021. An open, cross-industry organization that takes acomprehensive perspective of the entire hydrogen supply
chain, the JHA seeks to create an early path to a hydrogenpowered society by carrying out real-world projects. The
JHA is committed to proposing and coordinating suchprojects, establishing funds for them, studying basic
processes of management/operation, creating demand,
issuing policy recommendations on deregulation and othermatters, engaging in international activities, and collecting,analyzing, and sharing information from domestic andinternational sources.

(4) Kansai Electric Power GroupThe Kansai Electric Power Co., Inc. (KEPCO) signed an MoU
in September 2021 on jointly implementing a feasibility
study for the Central Queensland Hydrogen Project, which
proposes to develop a facility in Gladstone, Queensland,
Australia for large-scale production and liquefaction of

T OPICS: Actions toward Carbon Neutralit y in 2050

hydrogen derived from renewable energy, and to export
the hydrogen to Japan. The agreement was signed with
Iwatani Corporation, Kawasaki Heavy Industries, Ltd.,Marubeni Corporation, and two Australia-based energy
infrastructure companies, Stanwell Corporation Limited and
APT Management Services Pty Ltd.
The Japan-Australia project aims to create a large-scale
green liquefied hydrogen supply chain for stably achieving
low-cost hydrogen production and supply over the longterm. Its target is to realize hydrogen production of at least
100 t/day by around 2026, and at least 800 t/day by 2031.
In addition to exports to Japan, the developers will also
consider supplying the green hydrogen to customers inAustralia.
The feasibility study will mainly examine green hydrogenproduction technology, construction of a hydrogenliquefaction plant and a carrier, associated finance andenvironmental assessments, and a commercialization model.
KEPCO’s role in the study is to provide information on
potential utilization of hydrogen, such as a fuel for thermal
power generation and supply of heat.

3. H
 ydrogen Applications Other ThanPower Generationstrong environmental performance by lowering emissionsof CO2 and environmentally hazardous substances during
travel. They also promise greater comfort for crews andpassengers, as they will be free of the noise, vibrations,and odors associated with conventional ships. The projectwill seek to create a hydrogen fuel cell ship suitable forcommercial operation by carrying tasks such as building
the infrastructure for supply of marine hydrogen fuel,developing energy management processes, designing
the hull structure, and conducting sea trials. The members
plan to showcase the potential of hydrogen energy todomestic and international audiences at Expo 2025 in
Osaka as part of their drive to contribute to zero-emissions
maritime transport of the future. The project also includes
demonstration testing of a marine hydrogen station.

(2) Chugoku Electric Power Company
The Chugoku Electric Power Co., Inc. (Chugoku EPCo) has
teamed up with drone manufacturer Luce Search Inc. todevelop a hydrogen fuel cell drone. In June 2021, the project
was approved for a grant under a METI public programfor subsidizing the costs of projects with potential to help
advance industrial safety.
Drones are already being used in industry for tasks such as
ascertaining the physical effects of disasters and inspecting
power facilities. However, the challenge of extending flight
duration needs to be tackled in order to expand the role ofdrones and achieve greater labor savings.

(1) Kansai Electric Power Company
The Kansai Electric Power Co., Inc. (KEPCO) launcheda project in July 2021 with Tokyo University of Marine
Science and Technology, Iwatani Corporation, and Namura
Shipbuilding Co., Ltd. to conduct R&D on hydrogen fuelcell ships. Compared with conventional vessels, ships
powered with hydrogen fuel cells are expected to offer

The two companies are now working together to advancethe project. Luce Search is using its long flight time-related
expertise and sophisticated fuselage design technologies
to develop a prototype, while Chugoku EPCo is formulating
specifications for drone handling of tasks for commercial use
and providing support for demonstration testing.

57

S TAT I ST I C A L DATAThe Electric Power Industry in Japan 2023

Electric Power Generation*
HydroelectricElectric Utilities
Industry-owned
Thermal**Electric Utilities
Industry-owned
NuclearElectric Utilities
Industry-owned
Wind PowerElectric Utilities
Industry-owned
SolarElectric Utilities
Industry-owned
Geothermal
Electric Utilities
Industry-owned
OthersElectric Utilities
Industry-owned
Total
Electric Utilities
Industry-owned

[TWh]

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

83.6
67.4
16.3
986.8
735.9
250.8
15.9
15.9
–
4.8
0.2
4.7
0.2
0.1
0.1
2.6
2.5
0.1
–
–
–
1,094.0
822.0
272.0

84.9
68.6
16.3
987.3
743.1
244.2
9.3
9.3
–
5.2
0.2
5.0
1.2
0.1
1.1
2.6
2.4
0.2
–
–
–
1,090.5
823.7
266.8

86.9
70.3
16.7
955.4
717.8
237.6
–
–
–
5.0
0.0
5.0
3.8
0.1
3.7
2.6
2.4
0.2
–
–
–
1,053.7
790.6
263.2

91.4
74.9
16.5
908.8
675.7
233.1
9.4
9.4
–
5.2
0.1
5.1
6.8
0.1
6.7
2.6
2.4
0.2
–
–
–
1,024.2
762.6
261.6

84.6
81.9
2.7
877.0
794.4
82.6
17.3
17.3
–
5.5
5.0
0.5
11.1
6.5
4.6
2.2
2.2
0.1
0.3
0.3
–
997.9
907.6
90.4

90.1
87.9
2.3
861.4
777.5
83.9
31.3
31.3
–
6.1
5.5
0.7
15.9
8.7
7.2
2.1
2.1
0.1
0.3
0.3
–
1,007.3
913.2
94.1

87.4
85.0
2.4
823.6
726.2
97.4
62.1
62.1
–
6.5
5.9
0.6
18.5
10.8
7.7
2.1
2.1
0.1
0.2
0.2
–
1,000.4
892.2
108.2

86.3
84.3
2.0
792.9
696.2
96.7
61.0
61.0
–
6.9
6.3
0.6
21.4
13.2
8.2
2.1
2.0
0.1
0.2
0.2
–
970.8
863.2
107.6

86.3
84.5
1.8
790.0
697.9
92.1
37.0
37.0
–
8.3
7.6
0.7
25.0
16.2
8.8
2.1
2.0
0.1
0.2
0.2
–
949.0
845.4
103.6

87.6
85.8
1.8
776.0
681.4
94.6
67.8
67.8
–
8.2
7.4
0.8
27.9
19.0
8.9
2.0
2.0
0.1
0.2
0.2
–
970.0
863.5
106.5

FY

*Figures for industry-owned generation represent the total amount generated by power plants with a generating capacity of 1,000kW or above.
**In conjunction with the launch of the licensing system in fiscal 2016, certain utilities’ electricity generated that had been counted under “Industry-owned”
up through fiscal 2015 has been counted under “Electric Utilities” since fiscal 2016. **Including biomass and waste-to-energy.
Source : METI (2011-2020)

Electric Power Consumption

Low Voltage

[TWh]

FY

2010

2011

2012

2013

2014

2015

Residential
Commercial and Industrial

304.2
47.5
574.9
0.0
4.4
931.1
125.4
1,056.4

289.0
44.9
545.6
0.0
4.3
883.8
118.7
1,002.4

286.2
43.7
541.0
0.0
4.4
875.3
116.3
991.6

284.3
42.8
544.4
0.0
4.5
876.0
116.6
992.6

273.1
40.5
537.8
0.0
3.9
855.4
114.1
969.4

266.9
39.2
531.5
0.0
4.0
841.5
113.8
955.3

Specified-Scale Demand*Specified Supply**
Self-Consumption
Supplied by Electric Utilities
Power Generated and Consumed by Privately-owend Power Facilities
Total Consumption

Low Voltage
Specified-Scale Demand*

FY

2016

2017

2018

2019

2020

2021

Residential
Commercial and Industrial
High Voltage
Extra-High Voltage

272.9
37.9
308.3
231.4
6.0
43.2
899.8
70.8
970.6
2.3

280.4
38.4
310.6
233.8
6.1
45.1
914.4
70.0
984.3
2.3

271.4
37.1
307.8
236.3
6.3
37.4
896.2
77.2
973.4
2.3

267.7
35.7
302.8
229.9
6.2
34.9
877.1
75.6
952.7
2.2

278.0
35.4
290.3
214.9
5.5
36.8
863.2
66.3
929.5
2.4

278.1
34.8
296.5
225.5
6.1
38.1
881.6
68.4
950.0
2.4

Specified Supply**
Self-Consumption
Supplied by Electric Utilities
Power Generated and Consumed by Privately-owend Power Facilities
Total Consumption
Others (Last Resort Supply and Isolated Area Supply)*Contracted demand of 50 kW or above (in principle) received from general electricity utilities or specified-scale electricity suppliers.
**System that permits an electricity supplier to directly supply electricity to a consumer with which it shares a close relationship in manufacturing processes,
capital, etc., without having to register as an electricity retailer.

60

Source: METIS TAT I S T I C A L D ATA

Installed Generating Capacity*
FY

HydroelectricElectric Utilities
Industry-owned
Thermal**Electric Utilities
Industry-owned
NuclearElectric Utilities
Industry-owned
Wind PowerElectric Utilities
Industry-owned
SolarElectric Utilities
Industry-owned
Geothermal
Electric Utilities
Industry-owned
OthersElectric Utilities
Industry-owned
Total
Electric Utilities
Industry-owned

[MW]

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

48,93444,651
4,282
188,903
139,794
49,10946,14846,148
–
2,562
83
2,479
267
65
202
512
477
35
–
–
–
287,327
231,219
56,10748,932
44,676
4,256
191,258
141,901
49,35744,26444,264
–
2,646
82
2,563
1,559
67
1,492
512
477
35
–
–
–
289,171
231,468
57,70349,59745,403
4,194
193,356
143,777
49,57944,26444,264
–
2,750
30
2,720
4,085
81
4,005
508
473
35
–
–
–
294,560
234,028
60,53250,03545,786
4,248
190,805
143,040
47,76542,04842,048
–
2,808
50
2,758
5,624
87
5,536
517
473
43
–
–
–
291,836
231,484
60,35250,05849,521
536
193,910
174,392
19,51741,482
41,482
–
3,203
2,893
310
9,110
5,655
3,455
526
511
15
64
64
0
298,352
274,519
23,83450,01449,562452
193,462
173,261
20,201
39,132
39,132
–
3,483
3,091
391
12,592
7,318
5,274
471
466
5
54
54
0
299,209272,885
26,32450,03749,582455
193,026
171,469
21,55738,042
38,042
–
3,498
3,165
332
14,974
8,922
6,052
473
463
11
43
43
0
300,093271,685
28,40750,03349,635398
189,784
168,760
21,02433,08333,083
–
3,951
3,580
371
16,522
10,549
5,973
481
463
18
43
43
0
293,897
266,11227,78550,03349,635
398
191,758
170,260
21,49833,08333,083
–
4,119
3,750
369
19,02812,408
6,620
487
469
18
43
43
0
298,550
269,648
28,90349,92449,528396
188,247
167,474
20,77333,08333,083
–
4,254
3,862
392
21,034
14,124
6,910
487
469
18
60
60
0
297,088268,599
28,489*Figures represent the total amount generated by power plants with a generating capacity of 1,000kW or above.
*In conjunction with the launch of the licensing system in fiscal 2016, certain utilities’ power generation facilities that had beencounted under “Industry-owned” up through fiscal 2015 have been counted under “Electric Utilities” since fiscal 2016.
**Including biomass and waste-to-energy.

Source : FEPC (2011-2015), METI (2016-2020)

Transmission, Substations and Distribution Facilities of General Electricity Transmission and Distribution Utilities(As of March 31, 2021)

Transmission Lines [km]Route length

Voltage [kV]Overhead

Substations
Circuit length

Underground

Overhead

UndergroundNumberOutput Capacity
[MVA]

500

8,044

113

15,60220185

230,450

275

7,438

612

14,705

1,533

162

176,815

220

2,618

61

5,030

134

71

44,330

187

2,686

15

5,228

35

48

18,985

110–154

15,503

1,064

28,194

1,974

758

162,331

66–77

38,367

7,481

68,615

13,483

4,660

229,287≦55

13,786

6,171

15,015

10,173

1,325

10,354

Total

88,442

15,517

152,389

27,533

7,109

872,552

Transformers

Distribution Lines [km]Route length

Circuit length

Output Capacity [MVA]

Overhead

Underground

Overhead

Underground

Overhead

Underground956,715

44,4504,052,017

74,493352,462

36,648Source : FEPC

61

The Electric Power Industry in Japan 2023

Peak Load, Supply Capability, Annual Electricity Demand, Reserve Margin and Load Factor
2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Peak Load [GW]

157.2

161.6

154.3

164.5

155.9

155.5

164.8

164.6

166.5

164.6

Supply Capability [GW]

176.9

179.5

179.8

183.5

177.6

177.2

187.5

185.8

186.1

188.0

Annual Electricity Demand [TWh]

914.7

917.5

898.9

888.2

890.5

900.9

896.5

878.4

867.8

869.3

Reserve [GW]*

19.7

17.9

25.6

18.9

21.8

21.7

22.7

21.2

19.6

23.4

Reserve Margin [%]*

12.6

11.1

16.6

11.5

14.0

13.9

13.8

12.9

11.8

14.2

Load Factor [%]**

66.4

64.8

66.5

61.6

65.8

66.0

62.1

60.7

59.5

60.3

FY

* Reserve= Supply Capability-Peak Load Reserve Margin= Reserve/Peak Load×100		
**Load Factor= Annual Electricity Demand / (Peak Load ×365(366)×24hours) ×100
* Figures for 2015 onward are for summer only.

Source: Japan Electric Power Survey Committee (2011-2014), OCCTO (2015-2020)

Summarized Comparative Table Classified by Country for the Year 2019
USA

UK

FranceGermany

RussiaChina

India*

Japan

1,212,584

77,898135,328

226,396

275,800 2,010,060

411,773

293,897

Hydroelectric

100,816

4,365

25,557

14,66251,800358,040

45,44750,033

Thermal829,875

43,91018,58978,529191,900

1,189,570

282,350

189,784

Nuclear106,351

9,261

63,1309,516

30,30048,7406,780

33,083

Renewables and others

175,542

20,362

28,051

123,6881,700

413,710

77,91620,997

Total Energy Production [GWh]4,131,152

323,801

537,700

609,406

1,121,000

7,326,900

1,521,785

970,771

287,949

7,602

60,00019,730196,000

1,302,100

134,991

86,314

Thermal2,569,164

146,319

42,600266,223

714,000

5,046,500

1,244,959

792,810

Nuclear809,057

56,184

379,500

75,071

209,000

348,700

37,813

61,035

Renewables and others

464,981

113,694

55,600248,382

2,100

629,600

104,022

30,612

–

42.4

45.4

30.7

–

43.7

56.0

35.0

12,586

4,847

8,295

7,340

7,638

5,233

1,172

7,688

Domestic Energy Supplies [GWh]4,150,188

328,198

473,410–

1,110,100

6,283,500––

Energy Sales [GWh]3,811,151

273,493–439,830–

5,911,100

1,209,972

836,038

Number of Customers [At year-end; thousand]

154,898

31,275–––603,454

298,878

88,329Maximum Demand [MW]786,214

48,23088,500–151,700–

183,804

164,610Annual Load Factor [%]

59.9

70.5

61.1

–

79.7

–

–

60.7

Thermal Efficiency [%]

–

32.2

–

43.7

40.5

40.1

–

–

Loss Factor (Transmission and Distribution) [%]

5.1

8.0

7.7

–

–

5.9

20.7

–

Total Consumption per capita [kWh]

–

4,431

6,739

6,107

6,888

5,186

932

7,545

Total Installed Capacity [MW]Hydroelectric

Capacity Factor [%]Total Energy Production per Capita [kWh]*Figures other than Capacity Factor and Maximum Demand represent the actual figures for 2018.

62

Source: JEPIC, METIOV E R S E AS AC T I V I T I E S O F M E M B E R C O M PA N I E SThis section presents information on member companies’ overseas activities, provided by a number of member
companies. Although JEPIC has compiled this information with care, no guarantee can be made as to its accuracy.

The Electric Power Industry in Japan 2023

Recent Overseas Activities of Member Companies *North and South America
Company

Project

Location

Type

Capacity

Equity

[MW]

[%]

COD

Hokkaido

PV project in Mexico

Mexico

PV

290

12.0

2018

JERA

EI Sauz Onshore Wind IPP

USAOnshore Wind

302

100

2022

KansaiAviatorUSA

Onshore Wind

525

48.5

2020

Chugoku
Shikoku

10.0South Field Energy

USA

CCGT

1,182

Kyushu

8.9

2021

18.1

Shikoku

Huatacondo

Chile

PV

98

30

2019

KyushuEnernet Global Inc.

USA

Microgrid–(Private)–

J-POWER

Jackson**

USA

CCGT

1,200

100

2022

Location

Type

Capacity

Equity

[MW]

[%]

UK

Battery Storage

235

0.6

2019

NorwayFloating offshore
wind

4

30

2021

UK

Offshore
Transmission

–

20

2022

EuropeCompany

Project

COD

Tokyo

ZenobeTokyo

TetraSpar floating offshore winddemonstration project

Tokyo

Power transmission project for Triton Knoll
Offshore Windfarm

Chubu

BorWin1, BorWin2,
DolWin2, HelWin2

Germany

Offshore
Transmission

2,810

12

2017

Chubu

Eneco Group

Netherlands

Integrated Energy
Business

–

20

2020

JERA

Hydrogenious LOHC Technologies
Hydrogen Related Project

Germany

Liquid Organic
Hydrogen Carrier

–

–

2023

Kansai

Piiparinmaki

Finland

Onshore Wind

211

15

2022

Kansai

NeuConnect

UKGermanyInterconnector

–

17.5

2028

Triton Knoll

UK

Offshore Wind

857

KansaiJ-POWER

16
2022
25

*Not an exhaustive list**J-POWER has made a decision to sell its 49% interest in Jackson to another company, and as of December 31, 2022, the transfer is in the process of being approved by the relevant
authorities in the USA.

64

OVERSEAS ACTIVITIES OF MEMBER COMPANIES

Asia
Company

Project

Location

Type

Capacity

Equity

[MW]

[%]

COD

TohokuRantau Dedap Geothermal Power Plant
ProjectIndonesia

Geothermal

98.4

20

2021

TohokuNghi Son 2 BOT Thermal Power Plant
Project

VietnamCoal (SC)

1,200

10

2022

Tokyo

Corporate Solar PPA Project in Thailand

Thailand

Rooftop solar

3.8

49

2022

New Clark City

Philippines

Distribution andRetail–Chubu
Kansai

9
9

2019

JERA

Formosa 2 Offshore Wind IPP

TaiwanOffshore Wind

376

49

2022

JERA

Meghnaghat Gas Thermal IPP

Bangladesh

Gas

718

49

2022

JERA

Aboitiz Power Corporation

Philippines

Coal/Oil/Renewable

4,573

27

–

Hokuriku

Acquisition of 25.01% shares of Sun-eee

Cambodia

Distribution andRetail

–

25.01

2022

KansaiNam Ngiep 1

Laos

Hydro

290

45

2019

ChugokuFeng Ping Xi

Taiwan

Hydro

37.1

25.0

2024

YunlinTaiwanOffshore Wind

640

KyushuSarulla/Geothermal IPP

Indonesia

Geothermal

330

25

2017

J-POWER

Rooftop Solar (7 projects)

Thailand

Rooftop Solar

9.6

60

2023

Project

Location

Type

Capacity

Equity[MW][%]

Chugoku
Shikoku

3.375
4.4

–

OthersCompany

COD

Chubu

Project for Improvement of Energy Loss
Reduction on Distribution Network

Mozambique

Consulting––

2020-2024

Hokuriku

Fujairah F3 IPP

United ArabEmirates

CCGT

2,400

19.6

2023

Chugoku

Energy Fiji Limited

Fiji

Electric
Company

329

44

–

Shikoku

Hamriyah

United ArabEmirates

CCGT

1,800

15

–

KyushuAl Dur 1IWPP

Bahrain

CCGT &
Water Plant

1,234

19.8

2021

Okinawa

Project for Introduction of Hybrid Power
Generation System in Pacific Island Countries

Pacific Islands

Consulting––

2017-2023

J-POWER

Kidston Stage-3 Wind

Australia

Onshore Wind

258

53.9

2025

65

The Electric Power Industry in Japan 2023

Hokkaido Electric Power Co.

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OV ERSE A S AC TIV ITIES OF MEMBER COMPA NIES

Tohoku Electric Power Co.

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Tokyo Electric Power Company Holdings     
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Chubu Electric Power Co.
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69

The Electric Power Industry in Japan 2023

Hokuriku Electric Power Co.
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OV ERSE A S AC TIV ITIES OF MEMBER COMPA NIES

Kansai Electric Power Co.
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71

The Electric Power Industry in Japan 2023

Chugoku Electric Power Co.
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OVERSE AS AC TIV ITIES OF MEMBER COMPA NIES

Shikoku Electric Power Co.
  

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Kyushu Electric Power Co.
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Okinawa Electric Power Co.
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75

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77

The Electric Power Industry in Japan 2023

Member Companies Data (As of March 31, 2022)*

FY 2021

Approved maximum output of power facilities [MW]**

Capital (¥m)
Nonconsolidated

Sales (¥m)
Consolidated

Electricity
sold retail

Hydro

ThermalNuclearHokkaido EPCo

114,291

663,414

22,165

1,631

4,469

2,070

–

8,170

Tohoku EPCo

251,441

2,104,448

67,346

2,558

12,0732,750

243

17,625TEPCO HD

1,400,975

5,309,924

186,494

9,879

–

8,212

51

18,142

Chubu EPCo

430,777

2,705,162

108,932

5,466

–

3,617

88

9,171

Hokuriku EPCo

117,641

613,756

28,085

1,964

4,565

1,746

–

8,274

Kansai EPCo

489,320

2,851,894

100,657

8,248

14,5666,578

11

29,403

Chugoku EPCo

197,024

1,136,646

47,107

2,905

7,054

820

6

10,785

Shikoku EPCo

145,551

641,948

22,565

1,153

3,239

890

2

5,284

Kyushu EPCo

237,304

1,743,310

79,445

3,580

8,035

4,140

213

15,969Okinawa EPCo

7,586

176,232

7,033

–

2,163

–

2

2,166

J-POWER

180,502

1,084,621

0

8,560

8,666

–

545

17,771

JAPC

120,000

92,981

–

–

–

2,260

–

2,260

[GWh]

Renewable(excl. hydro)

Total*Some consolidated data contains non-consolidated data.
**Calculated based on figures contained in the “key facilities” sections of financial statements.
Source: Compiled based on companies’ financial statements (Japan Atomic Power Company data are from summary statement of business)

Note: The existing thermal power generation businesses of Tepco Fuel & Power, Inc. (a subsidiary of TEPCO HD) and Chubu Electric Power
Co., Ltd. were integrated into JERA Co., Inc. on April 1, 2019.

JERA

5,000

4,435,275––

59,243––59,243

Source: Financial statement

78CONTRIBUTORS:

Dai Ukita
Naoto Kishimoto
Masato Nabeshima
Manabu Hirano
Eisuke Sakagami
Hiroaki Sasa
Toshio Aki
Ryoji Fujii
Ryusuke Kawamoto
Midori Ohashi
Takashi Otsuki

COVER PHOTO:

Koushi Tsubota

DISCLAIMER

This publication was prepared by the Japan Electric Power
Information Center (JEPIC), based on publicly available
information. While we presume this information to beaccurate and reliable, we provide no guarantee as to theaccuracy of the data or information contained herein. JEPIC
shall therefore assume no legal responsibility for any trouble,
loss, or damages resulting from any actions taken based on
the content of this publication.
All rights reserved.
©2023 Japan Electric Power Information Center, Inc.

Distribution Areas and Frequency of General
Electricity T&D Utilities(As of February 2023)

Hokkaido
Electric Power
Network

TohokuElectric Power
Network

Hokuriku
Electric Power
T&D
ChugokuElectric Power
T&D

Kansai
T&D

Chubu
Electric
Power Grid

TEPCOPower Grid

KEY FACTS

KyushuElectric Power
T&D

ShikokuElectric Power
T&D

Capital

Tokyo

Area

377,975 km2 (as of Oct. 1, 2021)

Population

126,150,000 (as of Oct. 1, 2020)
Shinto, Buddhism, Christianity,
etc.
Bicameral legislative system
Yen (USD1 = JPY115.42, as ofReligions

60 Hz

50 Hz

Government
Currency
GDP

Jan. 4, 2022)

JPY535,509.9 billion (nominal,
FY2020, first annual estimate)

GNI per capita USD40,000 (nominal, 2020)

Okinawa
Electric Power Co.

Fiscal year

April 1 – March 31

Major
industrial
products

Automobiles, chemicals, food,steel, electronic parts/devices

Trade

Exports: JPY68,399.1 billion /Imports: JPY68,010.8 billion(final, 2020)

Source: Kyodo News, World Yearbook 2022

Member Companies (As of February 2023)
Hokkaido Electric Power Co., Inc.
2, Higashi 1-chome, Odori, Chuo-ku, Sapporo, Hokkaido 060-8677, Japan
https://www.hepco.co.jp/english/

The Chugoku Electric Power Co., Inc.
4-33, Komachi, Naka-ku, Hiroshima-shi, Hiroshima 730-8701, Japan
http://www.energia.co.jp/e/Tohoku Electric Power Co., Inc.
1-7-1 Honcho, Aoba-ku, Sendai, Miyagi 980-8550, Japan
http://www.tohoku-epco.co.jp/english/

Shikoku Electric Power Co., Inc.
2-5, Marunouchi, Takamatsu, Kagawa 760-8573, Japan
https://www.yonden.co.jp/english/

Tokyo Electric Power Company Holdings, Inc.
1-1-3, Uchisaiwai-cho, Chiyoda-ku, Tokyo 100-8560, Japan
http://www.tepco.co.jp/en/

Kyushu Electric Power Co., Inc.
2-1-82, Watanabe-dori, Chuo-ku, Fukuoka, 810-8720, Japan
https://www.kyuden.co.jp/english_index.html

Chubu Electric Power Co., Inc.
1, Higashi-shincho, Higashi-ku, Nagoya, Aichi 461-8680, Japan
http://www.chuden.co.jp/english/

The Okinawa Electric Power Co., Inc.
2-1, Makiminato 5-chome, Urasoe, Okinawa 901-2602, Japan
http://www.okiden.co.jp/en/

Hokuriku Electric Power Co.
15-1, Ushijima-cho, Toyama-shi, Toyama 930-8686, Japan
http://www.rikuden.co.jp/english/

Electric Power Development Co., Ltd. (J-POWER)
6-15-1, Ginza, Chuo-ku, Tokyo 104-8165, Japan
http://www.jpower.co.jp/english/

The Kansai Electric Power Co., Inc.
3-6-16, Nakanoshima, Kita-ku, Osaka 530-8270, Japan
http://www.kepco.co.jp/english/

The Japan Atomic Power Co.
5-2-1, Ueno, Taito-ku, Tokyo 110-0005, Japan
http://www.japc.co.jp/english/

The Electric Power
Industry in Japan

2023

Head Office15-33, Shibaura 4-chome Minato-ku,
Tokyo 108-0023, Japan
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