A proposal to amend the Electricity Business Act will be submitted to this ordinary Diet. The bill will be a revision of the Electricity Business Law (including the Supplementary Provisions), the FIT Law, the NITE Law, and the JOGMEC Law (so-called “bundled bill”). From this time, I would like to look at the contents of the revision of the Electricity Business Law.
First, we need to survey the strengthening the functions of Organization for Cross-regional Coordination of Transmission Operators(OCCTO). The Ministry of Economy, Trade and Industry (METI) will first strengthen inter-company interconnection, to expand the use of renewable energy across supply areas, and further to promote a competitive environment in the power generation market. Second, the Hokkaido Blackout in 2018 and the long-term blackout in Chiba Prefecture in 2019, they aim to enhance the resilience of power supply, and for this purpose METI will enhance the functions of OCCTO.
First, as a task of OCCTO, in addition to the business rules and transmission and distribution business guidelines, the work of formulating a “ Wide area grid development plan ” was added to the law. METI will be given the authority to change this plan, and METI are aiming to solidify the authority over equipment planning for wide-area grid systems nationwide.
At that time, the price difference income (excess income brought to JEPX as a result of settlement when a price difference between areas due to the market fragmentation of the previous day’s market) which is reserved on the wholesale electricity exchange (JEPX) will transfer to OCCTO. By using this as a source of funds, a portion of the investment funds for strengthening interconnection lines and others will be distributed to transmission and distribution companies, thus providing financial support to the wide area grid system development plan.
Second, it is required that general power transmission and distribution companies jointly submit a disaster cooperation plan via OCCTO. As a prerequisite, as a part of asset management, general grid companies are obliged to create ledgers that clearly indicate when electric facilities were installed, and to systematically update aging equipment.
It will be noted that unification of equipment specifications will be stipulated in the disaster cooperation plan. It is unlikely that such unification will be proceeded easily because of the difference of interests between power companies, manufacturers and installers is high.
These contents are generally within the expected range. What we’d like to point is as follows..
First, JEPX’s marginal profits are borne by market participants, that is, generators and retailers, and it is irrational to allocate the funds to OCCTO. There are two reasons why METI enforces it. METI has a strong desire to realize a reorganization of the power industry through the use of renewable power sources across the country and power competition, Keidanren participating companies are expecting to expand business opportunities through investment in interconnection lines. Originally, JEPX price difference revenue should be used to reduce transaction fees, but there was no such legitimate discussion.
Next, it is also important that general transmission and distribution companies did not resist the strengthening of authority over OCCTO. In the face of stagnant power demand, realizing investment in the replacement of aging equipment has become a major concern, and there is even an atmosphere that welcomes the acceptance of legal obligations to replace equipment.
In this way, the strengthening of authority over the OCCTO is inextricably linked to the weakening and reduced self-determination ability of general power transmission and distribution companies.