Japan Electricity Deregulation: Birth of Municipally Owned Electric Utilities

Published at Renewable Energy World --- The upcoming retail electricity deregulation in Japan next April will create a way for Japanese municipal governments to produce and supply locally generated renewable electricity. The Fukushima nuclear disaster in 2011 was a harsh wake-up call that quickly became a strong source of motivation for many local governments to take energy matters into their own hands in order to provide safe and clean electricity to their own citizens.

Nakanojo, a town in Gunma prefecture, established the nation’s first locally owned utility with the motto of “Locally Produced, Locally Consumed Renewable Energy.” The town is geotropically located in the middle of Japan and is famous for flowers and hot springs surrounded by deep-green mountains.

“When a former mayor of Nakanojo visited the tsunami disaster areas in northeastern Japan, he decided to make his town nuclear-power-free, and upon his return, he created a new department to develop renewable energy plants,” Masao Yamamoto, Naknojo renewable energy department, said. Yamamoto was transferred from the wastewater division to head the newly created department.

Back then, everyone in the town had little choice but to purchase electricity from Tokyo Electric Power Co. (TEPCO), which is the nation’s largest investor-owned electric utility (IOU) and is an owner of the Fukushima Daiichi Nuclear Power Station and 16 other nuclear reactors.

2-MW PV System operated by Nakanojo town, Credit: Nakanojo town

By utilizing the nation’s feed-in tariff (FIT) program, which was launched in July 2012, the town funded and developed two 2-MW solar photovoltaic (PV) systems with the FIT rate of ¥40/kWh per 20 years. The town also leased town-owned land to a private company in order to build a 1 MW PV project. By the end of 2013, a town with a population of only 18,000 had 3 large-scaled PV plants, producing 7,000 MWh of electricity annually.... Read More Here