JAPAN Law and Practice Contributed by: Rintaro Hirano, Yutaro Fujimoto, Yurika Masakane and Yutaro Kato, Nagashima Ohno & Tsunematsu
The Market for Trading of Renewable Energy Val- ues was established in November 2021 follow- ing the growing demand for renewable energy- sourced electricity by consumers. This market deals with the NFCs under the FIT regime (“FIT NFCs”) and not only retail electricity suppliers but also consumers can purchase FIT NFCs in this market. Although FIT NFCs do not give ben- efits under the Promotion Act to retail electric- ity suppliers, both retail electricity suppliers and consumers may deduct the amount of CO₂ rep- resented by the FIT NFCs from their CO₂ emis- sions for the purposes of the Act on Promotion of Global Warming Countermeasures. Point to note regarding supply to high-load consumers There are no special market regulations regard- ing supply for high-load consumers. However, in response to the expansion of localised high-load electricity demand at data centres, semiconduc- tor factories and other facilities, the following measures are being discussed to efficiently and rationally develop and utilise transmission and distribution networks: • setting payment deadlines for grid construc- tion costs to be paid by consumers to the TSO; • shifting part of the cost for upgrading the upper-level grid network, which was previ- ously borne by TSOs, to high-load electricity consumers; • releasing grid capacity exceeding actual elec- tricity demand by high-load consumers; and • placing the additional burden of expense onto high-load consumers for delayed construc- tion of high-load consumption facilities. 2.2 Electricity Imports and Exports At the time of writing, Japan has no interna- tional interconnection. There is no legal restric-
tion against imports and exports of electricity, although in practice these do not occur. 2.3 Supply Mix of Electricity According to ANRE, the supply mix of electricity in 2023 was as follows: • natural gas 32.9%; • coal 28.3%; • oil 7.4%; • nuclear 8.5%;
• hydro 7.6%; • solar 9.8%; • wind 1.1%;
• biomass 4.1%; and • geothermal 0.3%. As of the time of writing, Japan’s outlook for the
supply mix in 2040 is: • thermal 30%–40%; • nuclear 20%; • hydro 8%–10%; • solar 23%–29%; • wind 4%–8%;
• biomass 5%–6%; and • geothermal 1%–2%. 2.4 Market Concentration Limits There are no concentration limits in Japan. 2.5 Surveillance to Detect Anti- Competitive Behaviour Under the Electricity Business Act, EGC has responsibility for market surveillance to secure the soundness and fairness of the electricity market. If any anti-competitive behaviour by an electricity business operator is detected, EGC may give a warning to such an operator and advise the Minister of Economy, Trade and Industry to issue an order to the electricity busi- ness operator to improve its business.
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