Effect of electricity system reform on retail electricity price increases in Japan

1 Background The Japanese government is conducting electricity system reform in stages and plans to complete this reform by 2020. Historically, all electricity related services in Japan have been overseen by regional monopolistic entities. After the reform is completed, both the wholesale and retail electricity markets will be perfectly competitive, as in most countries in the EU, and many states in the USA and Australia (METI 2015). For the most part, the wholesale electricity market in Japan has already been liberalized, whereas only high-voltage power in the retail electricity market has been liberalized. During the next several years, the scope of retail electricity liberalization is expected to expand to smallscale factories and households. The liberalization of retail electricity is attracting considerable attention because of decreasing retail electricity prices and increasing electricity serving services. However, there are also some concerns that electricity system reform will increase peak-time Abstract