Japan’s Electricity Market deregulated: the end of an era?

Electricity Market in Japan

“Japan’s power utilities have lost their monopoly over electricity on Friday April 1st in an unprecedented shakeup that could give a much needed jolt to Japan’s long stagnant economy.

Already, a price war has broken out among many of the more than 260 companies that will be allowed to sell electricity in Japan’s $70 billion retail market. From April 1, Japanese consumers will be able to buy electricity from suppliers ranging from telecoms conglomerate Softbankand trading firm Marubeni to travel agency H.I.S. and a Hokkaido-based supermarket co-operative that has branched out into solar parks.

They and others like Japan’s biggest city gas operator, Tokyo Gas are packaging other services, offering loyalty programs and advertising them.

The new entrants are betting they can make money in a low-margin business by undercutting the monopolies brought low financially by the Fukushima disaster and saddled with a high-cost business model after decades of guaranteed profits.

The government is hoping increased competition in the final remaining restricted part of the electricity market will boost efficiency and innovation and cut prices that are among the highest in the world.

But the new entrants are competing for space in a market in long-term decline as the population falls and consumers from factories to households look to trim power use.

What is more likely to happen is regional monopolies would merge and relatively few of the newcomers would survive the coming battle for market share.”  (Reuters)

The page has been turned: this is definitely good news for Japanese consumers and this should also work in favour of further deployment of Renewable Energies in Japan! What do you think?

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