The government will establish a new wholesale electricity market next month as part of its 10-point action plan to prevent power shortages this summer, sources said.
The new market is designed for sales and purchases of surplus electricity generated by businesses’ off-grid power systems as well as electricity created by wind, solar power and other renewable sources.
The existing wholesale electricity market deals only with power created by electric companies' large power plants and other big players in the industry.
Details of the action plan are expected to be announced on May 18 along with recommended energy-saving measures for households and businesses.
Japan, with all of its nuclear reactors offline due to safety checks, faces possible power shortages this summer if temperatures reach the same levels as in 2010, one of the hottest summers on record.
The new wholesale market, called the decentralized, green electricity market, is aimed at increasing the power supply. Trading on the market is expected to start by the end of June.
The government will set the initial and annual fees low to encourage transactions by many companies and organizations, the sources said.
The action plan also includes the opening of “negawatt” transactions, which buy and sell saved electricity and are intended mainly for factories and office buildings.
Under the setup, electric companies buy saved electricity from companies promoting power conservation.
The government will also push for the introduction of a time-of-day electricity rate system that charges more during the daytime to discourage power use during peak demand periods.
Tokyo Electric Power Co., Kansai Electric Power Co. and Kyushu Electric Power Co. have been considering the new rate plan.
The action plan envisages giving gifts to households that reach the power saving targets of electric companies.
It also recommends steps to cut energy use in businesses and households, particularly energy-gobbling air conditioners and lighting systems.
In addition, the plan will specify the effects of energy saving measures in numbers.
For example, it will say that if air conditioners are set to 28 degrees, in line with the government’s advisory, a household or company will save 670 yen ($8) a year per air conditioner designed for a six-mat tatami room.
For the area served by Kansai Electric, the government will give concrete figures for energy saved, such as: “A total of 17 percent will be saved if the number of lights used is cut to half and air conditioners are set to 28 degrees.”
Kansai Electric plans to urge businesses and households in its jurisdiction to cut energy use by 15 percent this summer, compared with the summer of 2010.
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