66 H. OHTA
from the existence of 10 vertically-integrated regional electricity companies, EPCOs, which still mostly monopolize generation, transmission and
distribution, and retail sales of electricity with the support of economic
and energy agencies and concerned industrial interest groups.
METI prioritizes nuclear, thermal, hydro, and geothermal power
generation as baseload electricity sources and power companies likewise
prioritize “possible amounts of connection” in the power grid to these
sources of electricity. Then, remaining amounts are assigned to solar,
wind, and biomass (Asahi Shimbun 2015a). This policy has two significant
problems. The first problem is that this goes against the principle of the
FIT system, which is supposed to prioritize the connection of electricity
generated from renewable energy sources as the German system does. The
other problem is that a power company includes the generation capacity
of nuclear power plants in the “possible amounts of connection,” even
though they are to be decommissioned in the future, or idle due to safety
inspections or the retrofitting of additional safety measures. This fact
further reduces the allocation of renewable energy generation. 10 One of
the reasons why Germany could rapidly increase its renewable electricity
generation is the priority given to connecting renewable energy facilities to electricity grids. What is happening in Japan is just the opposite.
On October 13, 2018, Kyushu EPCO, which faced electricity generation
in excess of what its grid could handle, curtailed electricity from solar
generators in order to keep four nuclear power plants connected to the
grid (Asahi Shimbun 2018a). One month later, Tohoku, Chugoku, and
Okinawa EPCOs announced that they were also preparing for restraining
renewable energy generation (Asahi Shimbun 2018b).
Moreover, there are two other factors for promoting renewable energy
that have yet to develop in Japan: electricity deregulation and the separation of electric power production from power distribution and transmission. The liberalization of the Japanese electricity market began on April
1, 2016. The market size is said to be USD150. Thus, successful liberalization can bring tremendous benefits to both the Japanese economy
in general and consumers, especially through efficient electricity generation, lower electricity charges, and various retail services. However, these
benefits are likely to emerge if the vertical integration of generation, transmission and distribution, and retail by regional monopoly EPCOs comes
to an end, and fair competition between the old and new entrants is guaranteed. As mentioned in the previous paragraph, unfair practices already
from the existence of 10 vertically-integrated regional electricity companies, EPCOs, which still mostly monopolize generation, transmission and
distribution, and retail sales of electricity with the support of economic
and energy agencies and concerned industrial interest groups.
METI prioritizes nuclear, thermal, hydro, and geothermal power
generation as baseload electricity sources and power companies likewise
prioritize “possible amounts of connection” in the power grid to these
sources of electricity. Then, remaining amounts are assigned to solar,
wind, and biomass (Asahi Shimbun 2015a). This policy has two significant
problems. The first problem is that this goes against the principle of the
FIT system, which is supposed to prioritize the connection of electricity
generated from renewable energy sources as the German system does. The
other problem is that a power company includes the generation capacity
of nuclear power plants in the “possible amounts of connection,” even
though they are to be decommissioned in the future, or idle due to safety
inspections or the retrofitting of additional safety measures. This fact
further reduces the allocation of renewable energy generation. 10 One of
the reasons why Germany could rapidly increase its renewable electricity
generation is the priority given to connecting renewable energy facilities to electricity grids. What is happening in Japan is just the opposite.
On October 13, 2018, Kyushu EPCO, which faced electricity generation
in excess of what its grid could handle, curtailed electricity from solar
generators in order to keep four nuclear power plants connected to the
grid (Asahi Shimbun 2018a). One month later, Tohoku, Chugoku, and
Okinawa EPCOs announced that they were also preparing for restraining
renewable energy generation (Asahi Shimbun 2018b).
Moreover, there are two other factors for promoting renewable energy
that have yet to develop in Japan: electricity deregulation and the separation of electric power production from power distribution and transmission. The liberalization of the Japanese electricity market began on April
1, 2016. The market size is said to be USD150. Thus, successful liberalization can bring tremendous benefits to both the Japanese economy
in general and consumers, especially through efficient electricity generation, lower electricity charges, and various retail services. However, these
benefits are likely to emerge if the vertical integration of generation, transmission and distribution, and retail by regional monopoly EPCOs comes
to an end, and fair competition between the old and new entrants is guaranteed. As mentioned in the previous paragraph, unfair practices already