Here's why Japan is pushing for its electricity liberalisation

Full liberalisation is just around the corner.

In just a few weeks from now, Japan will be experiencing a big paradigm shift in its electricity scheme. Come April, the country will be fully liberalising its electricity retail market and will be just one step away from unbundling its transmission and distribution sector. 

It was a year ago when Japan revealed the Organization for Cross-regional Coordination of Transmission Operators to assist in the country's electricity liberalisation. Since then, it has been the organisation's goal to expand nationwide coordination of all transmission operators. The second phase is the full liberalisation of the retail market--which is about to happen in a few weeks' time--and the last phase is the further security of neutralisation among transmission and distribution sectors.

According to Toyokazu Misono, managing executive officer at Kansai Electric Power (KEPCO), the purpose of the electricity system reform is firstly to secure stable supply. "Electricity suppliers are not the issue per se, we have enough players in the industry. However, the issue is the transmission of the energy supply along the way. A lot of demand comes from Japan's center area, but our big suppliers are in the far coasts," he clarified.

Another goal of the liberalisation is to suppress the electricity rates as much as possible. "Costs in Japan are already heavy on the wallet as it is, and the government wants to make sure that electrification won't be an issue in the long term," Misono explained.

Lastly, on a more customer-related stance, Misono said that ultimately, liberalisation aims to expand the choices of consumers and business opportunities of operators.

"Power of Japan is power of both the people and the players. Household customers can easily modify how much electricity they'll need. For instance, we in KEPCO actually have a tariff system which brings more benefits of discount rate to households which consume more electricity," Misono said.