JAPAN Law and Practice Contributed by: Rintaro Hirano, Yutaro Fujimoto, Yurika Masakane and Yutaro Kato, Nagashima Ohno & Tsunematsu
are adequately funded are required to be taken under the bidding guidelines. In addition, as with solar powerplants, operators of onshore and off- shore wind farms will be subject to mandatory reserve funding accumulation to cover decom- missioning costs under the Renewable Energy Special Measures Act. 4. Transmission Lines and Associated Facilities 4.1 Constructing and Operating Transmission Lines and Associated Facilities The Electricity Business Act governs the licens- ing arrangements for the construction and oper- ation of transmission and distribution networks, as well as the procedures for the construction of such networks and associated facilities. In general, METI controls the development of transmission and distribution networks by requir- ing TSOs and Electricity Transmission Business operators to submit a development plan of their major network assets (major transmission lines and transformer stations) for the forthcoming ten years. With respect to individual construction work, the operator is required to file a construc- tion plan with METI no less than 30 days prior to commencement of the work if it involves the construction of a transmission line or transform- er substation of 170 kV (in some cases, 100 kV) or more. Such transmission lines or transformer substations must pass a pre-use investigation conducted by METI before being provided for commercial operation. Construction of transmis- sion facilities does not require an environmental impact assessment under the EIA Act. In addition, TSOs need to consider the Master Plan and network construction plans for the
geographical area they are responsible for when they develop their transmission lines and associ- ated facilities. See 1.7 Announcements Regard- ing New Policies . 4.2 Obtaining Approvals to Construct and Operate Transmission Lines and Associated Facilities Notwithstanding the general trend and signifi- cant government activity towards liberalisation of the electricity market since 1995, the trans- mission and distribution network sector has seen the least structural change, and on an organi- sational level remains largely unaltered. The ten major utilities continue their regional monopolies in their respective service areas for this sector. As METI’s position is to maintain these regional monopolies for the transmission and distribution sector, it seems unlikely that METI would issue a new licence to conduct General Electricity Transmission and Distribution Business. There are, however, three exceptions to this monopoly. Electricity Transmission Business Licence Holders When the current licence regime was intro- duced, J-Power was the only electricity trans- mission business licence holder. At the time of writing, two more operators have obtained an Electricity Transmission Business licence. They are expected to supplement the transmission services conducted by the TSOs within the respective monopoly regions of those opera- tors by constructing transmission lines in areas that the existing transmission network does not cover and will not cover in the near future. To operate an Electricity Transmission Business requires the approval of METI.
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