The Ministry of Economy, Trade and Industry is compiling the contents of each committee toward the revision of the Electricity Business Act, which will be submitted to the ordinary session of the Diet in January 2020.
Of these, power-related people are confused about licensing distributed grids (also referred to as microgrids). Specifically, the aim is to legally establish a “power distribution business operator” that maintains and operates the distribution system transferred or lent by a general power transmission and distribution business operator and provides consignment supply as a new business type.
The Ministry of Economy, Trade and Industry cites that it is desirable to enter into grid operation utilizing distributed energy in specific areas in order to strengthen resilience in response to the prolonged large-scale power outages caused by recent disasters as the reason for the establishment of a new business. However, it does not seem to have been thoroughly considered, and the following important questions arise.
・ What to do with the rate regulation for the supply of new entrants
・ How to prevent the entry of cream skims in areas with high demand density
・ What to do with the transfer / loan conditions of general power transmission and distribution business operators
The committee does not answer such questions, and imposes the final guarantee obligation of the power transmission and distribution business operator on the general power transmission and distribution business operator, and the equipment maintenance obligation of the power transmission and distribution business operator is individually determined by the contract with the general power transmission and distribution business operator. , The burden of entering the business is borne by general power transmission and distribution business operators, and priority is given to measures to promote new entry.
Why introduce a power distribution license so quickly?
What is the true aim?
This is the focus of the power industry.
The first thing that can be considered is the strong intention of the Ministry of Internal Affairs and Communications. There are two backgrounds to the Ministry of Internal Affairs and Communications’ request for a distributed grid.
The first is the strong request of the NTT Group. In June 2019, the group established NTT Anord Energy Co., Ltd., which is responsible for smart energy solutions. Through the company, NTT has acquired a majority of voting rights of ENETT, showing a strong desire to enter the network business that transcends the framework of power generation and retail. The second is the request of the local government. Due to the frequent occurrence of disasters, local governments are becoming more motivated to enter the decentralized grid for various reasons such as strengthening energy supply, creating local jobs, low carbonization, and local production for local consumption. Against this background, the Ministry of Internal Affairs and Communications has strongly promoted the establishment of a decentralized grid project with Minister Sanae Takaichi in the foreground. This movement is behind the establishment of this new system.
But this is not all. The Ministry of Economy, Trade and Industry has another big aim.
It is well known that the Ministry of Economy, Trade and Industry is planning to reorganize the 10 electric power system after 3.11. “Reorganization” has two meanings. The first is the separation of power, network and sales, and the second is the nationwide integration of network.
The Ministry of Economy, Trade and Industry believes that network integration is indispensable for achieving power competition at the national level. They believe that if the network remains separated into nine power sources, the power competition will not work due to insufficient interconnection capacity between utilities, effectively protecting the Ancien Régime. For this reason, network integration (one company nationwide or two companies for 50Hz / 60Hz) and strengthening of interconnection lines led by OCCTO are regarded as prerequisites for power restructuring.
If you think of a network as a means of connecting large-scale power sources in this way, you can imagine that the aim of bureaucrats is limited to power transmission equipment. In other words, for the purpose of power reorganization, a “network” is a power transmission facility that connects power sources, and distribution facilities are not of interest to the Ministry of Economy, Trade and Industry.
As a result, a new step of separating transmission and distribution licenses will be born as a milestone in network integration. Rather than aiming for network integration with integrated power transmission and distribution, bureaucrats say that it seems to be a detour at first glance to separate the power distribution department, which has a strong regional character, from the network and then integrate only the power transmission department. But realistically, that is a shortcut, they believe.
A distributed grid is a subdivision of a distribution network. We are trying to realize the separation of power transmission and distribution licenses by encouraging a large number of businesses to enter the power distribution business and promoting the de facto separation of power transmission and distribution.
It’s a bit quick, but the next revision of the Electricity Business Act will take place in the early 2020s, separating transmission and distribution licenses. The true aim of bureaucrats is that this, combined with the enhancement of the functions of the OCCTO, will lead to the substantial integration of the transmission sector and the next power restructuring.