Electric power market reform in Japan after Fukushima Daiichi nuclear plant disaster

Abstract

Purpose The purpose of this study is to review the current status and related issues on the market reform of Japanese electric power industry after Fukushima Daiichi nuclear plant disaster. We also discuss the future policy direction for the market reform. Design/methodology/approach This research compares the reform process of Japanese electric power industry with that of European Union (EU) nations. Then, this study discusses policy issues on the Japanese market reform based upon our comparative analysis. Findings Japan may learn many things from the market liberalization process and institution of EU nations. In the learning process, it is necessary to pay attention to industrial differences between Japan and the EU nations. Each country has its own unique features on fuel mix, business environment as well as supply and demand relationship. Such differences may influence a desirable policy direction for each nation’s market reform. The international comparison discussed in this study indicates the importance of a step-by-step approach in which Japan can gradually incorporate European experiences into the Japanese market reform. Research limitations/implications Since this study focuses upon the Japanese market reform, the empirical findings may have limited policy implications. The implications obtained from Japanese experience need additional thought in shifting them to other nations. Such an extension will be an important future task of this study. Originality/value This study discusses the current policy issues and future direction on the Japanese electricity market reform. This study also suggests its future direction. Previous research has never discussed the Japanese experience. Policy makers, corporate leaders, and individuals in the world, who are involved in the energy industry, have been paying attention to the Japanese future energy direction after Fukushima Daiichi nuclear plant disaster. This study provides such a future energy direction on Japanese market reform from European experience.