ABSTRACT
This chapter explains how the challenges interact with the unique structure of Japan's electricity market, dominated by ten regional electric utility monopolies, and outlines electricity sector organization and supply structure. Revisions of the Electric Utility Industry Law between 1995 and 1999 permitted new entrants, weakened central control of pricing and allowed competition on the retail side. The utilities organize their common interest via the Federation of Electric Power Companies of Japan (FEPC). Since 1951, the utilities have largely monopolized control over Japan's major electricity-usage regions and, together with wholesale suppliers, currently collectively produce over 95 per cent of country's electricity. The chapter demonstrates that, following Fukushima, electric utilities have been affected by the nuclear power shutdown and have found themselves in a difficult financial position as they are bearing the increased cost of energy imports to fuel thermal power plants. It highlights the fragmented nature of Japan's electricity grid, which was a major issue in the aftermath of Fukushima disaster.
