RIETI Policy Symposium

Electricity Market Reform: Current State and Remaining Challenges


Since the 1990s, a number of countries and regions around the world, with Europe and the United States taking the lead, have been actively pursuing the liberalization of the electric power market. From April 2005, the scope of liberalization of retail electric power will expand to allow all high-voltage users in Japan to choose their electricity supplier. In addition, a series of institutional reforms are planned, including the creation of a nationwide wholesale electricity market and the establishment of a neutral body to set and oversee the implementation of rules for electricity transmission and distribution sectors. Deliberations for the complete liberalization of the electric power market will start after April 2007. A long and challenging struggle is expected, as reform is an ongoing process requiring detailed design of new institutions, their continued implementation, as well as evaluation of these institutions so that the results can lead to further reform.

During this symposium, we will first discuss the development and history of reforms in the electric power market in Europe and the United States, and analyze the current state of these markets. After examining these markets, we will move to a systematic discussion of the critical issues concerning the design of institutions needed in Japan to promote the liberalization of the electric power market in Japan.

In theory, liberalization of the electric power market should ensure greater stability in the electricity supply system while curbing excessive investment in electricity transmission networks, encourage the building of power-generating facilities in more efficient locations, contribute to the reduction of load on electricity generating facilities during peak demand periods, and encourage users to establish energy-consuming facilities in efficient locations as well as hold down their consumption of power during peak demand periods.

On the other hand, it is necessary to give due consideration to a range of other issues. What are the possibilities of market failure? In other words, have adequate long-term investments been made in such areas as electricity transmission networks and electric power generating facilities? What are the potential problems in maintaining a stable supply? What are the lessons to be learned from the massive power blackouts that occurred recently in North America and Europe? Whether these issues are adequately dealt with will depend on how various institutions, such as the wholesale electricity market, the rules for and operation of electricity transmission and distribution businesses, and the pricing regulation for transmission and distribution of electricity, are developed and implemented. We will have to wait and see the results they achieve.

This symposium proposes to discuss a diverse range of issues led by experts from both inside and outside Japan, including Dr. Noé van Hulst, Director of Long-Term Co-operation and Policy Analysis at the International Energy Agency (IEA), as well as to define the policies and measures that must be developed in the future based on "Liberalizing Electricity Markets: An Economic Analysis " (Written and edited by HATTA Tatsuo and TANAKA Makoto, Toyo Keizai) published in August, 2004.


  • Date and Time: 15 December 2004. 9:30-15:45
  • Venue: U Thant Hall, United Nations University (Shibuya-ku, Tokyo)
  • Language: Japanese / English (with simultaneous interpretation)
  • Charge: ¥2,000 (an official receipt will be issued)
  • Host: Research Institute of Economy, Trade and Industry (RIETI)
  • Contact: RIETI
    Ms. Taeko Matsukura
    Tel: 03-3501-8398

* Streaming video footage of and handouts pertaining to the symposium will be available for downloading from the RIETI website after the event.


9:30-9:40 (10min) Opening Remarks:
9:40-10:50 (70min) Session 1: "Electricity Market Reform: Recent Development in Europe and the U.S., and Japan's Situation"
9:40-10:20 (40min) Presentation:
10:20-10:35 (15min) Comment:
10:35-10:50 (15min) Q & A
10:50-11:00 (10min) Coffee Break
11:00-12:10 (70min) Session 2: "Searching for the Best Liberalization Case"
11:00-11:40 (40min) Presentation:
11:40-11:55 (15min) Comment:
11:55-12:10 (15min) Q & A
12:10-13:00 (50min) Lunch (buffet-style)
13:00-13:30 (30min) Session 3: "Lessons learned from the Power Outage in North America and Europe"
13:00-13:20 (20min) Presentation:
13:20-13:30 (10min) Q & A
13:30-15:40 (130min) Session 4: "Remaining Policy Challenges for Japan"
13:30-14:00 (30min) Presentation:
14:00-15:00 (60min) Panel Discussion
15:00-15:25 (25min) Q & A
15:25-15:40 (15min) Conclusion:
15:40-15:45 (5min) Closing Remarks:
* The agenda is subject to change.