Proposed reforms worry Japanese utility executives

• 11 years ago (2013-02-17)
• Junior Isles

Asia 892 Nuclear 659

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Proposed reform of the Japanese power industry would deprive utilities of revenue to the extent that they would be incapable of operating current and planned nuclear facilities, according to Makoto Yagi, president of Kansai Electric Power Co. and head of the Federation of Electric Power Companies of Japan.

The reforms proposed by a panel of experts at Japan’s Ministry of Economy, Trade and Industry has been described as “the most sweeping reform of the electric power industry in post-war years.”

One of the panel’s recommendations was that power transmission and distribution be separated from regional utilities within five to seven years, handing these operations over to subsidiaries.

The rationale is to allow suppliers of renewable energy to have fair access to power transmission and distribution networks currently owned by utilities, increasing competition and levelling the playing field for renewable and non-renewable generation. .

“It has yet to be ascertained if a stable supply of inexpensive electricity will be secured,” Yani said in response to the proposals. “The proposed reform will not necessarily benefit our customers.”

Utilities fear the proposed reforms will result in a sharp decline in profits, making it harder for them to finance nuclear power plants.

Yagi also called for restarts of reactors which have been deactivated since the nuclear disaster at the Fukushima No. 1 plant nearly two years ago.

“Nuclear plants should be utilised to provide a stable and inexpensive power supply,” he said.