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Agency for Natural Resources and Energy Guidelines for Energy Resource Aggregation Business Formulated Revision of the Guidelines for Trading Negawatts

Aiming to disseminate and expand energy resource aggregation business (ERAB),*1 including negawatt trade, the Ministry of Economy, Trade and Industry (METI) revised the existing Guidelines for Trading Negawatts and newly formulated the Guidelines for Energy Resource Aggregation Business.

1. Outline of the new guidelines

METI has been advancing efforts involving negawatt trade in which utilities pay for the amount of electricity saved by consumers (negawatts). Concerning this trade, METI formulated the Guidelines for Trading Negawatts in March 2015 to define guides along which related businesses should conduct important practical matters in trading negawatts, and it revised the guidelines in September 2016. Forecasting the future expansion of related business models in this field, METI decided to revise the guidelines again as follows to newly cover overall business involved in the ERAB framework, and changed the title of the guidelines to Guidelines for Energy Resource Aggregation Business.

2. Background to and details of the revision

In June 2017, METI established a Working Group for Assessment of Demand Control under the ERAB Study Group.*2 Since then, the working group has been discussing methods for assessing demand to be controlled, targeting broad issues involving virtual power plants(VPP)and the demand response(DR)program, as well as negawatt trade.

Against this backdrop, METI decided to revise the existing guidelines to change the methods of setting baselines for addressing so-called "demand-increase DR," approaches to compensation for negawatts,*3 and other rules.

Key points of the revision

  • Methods of setting baselines involving the demand-increase DR
    The revised guidelines are to adopt methods of setting baselines for demand-increase DR, an approach equivalent to the methods of setting baselines involving DR with a longer response time and duration period defined in the existing guidelines.
  • Compensation for negawatts
    The revised guidelines are to additionally stipulate an approach to compensation for negawatts in the case where general electricity transmission/distribution businesses intend to procure negawatts for supply-demand adjustment.

*Notes:

  1. The term “ERAB” refers to a business framework in which businesses make use of VPPs and DR and provide a variety of services for: electricity adjustment, avoidance of supply-demand imbalance, electricity-rate cut, avoidance of output control and other measures to their customers, such as electricity transmission/distribution businesses, electricity retailers/consumers, and renewable-energy utilities.
  2. The study group, established in January 2016, aims to develop the ERAB framework and, to this end, it will streamline the overall perspectives of challenges in a variety of areas, e.g., developing communication standards and systems, at the working-level through industry-academia-government collaboration.
  3. Compensation for negawatts is a cost for adjusting the cost-benefit gap between electricity retailers supplying electricity to consumers who have controlled electricity demand and aggregators.

Related Information

Release date

November 29, 2017

Division in Charge

Advanced Energy Systems and Structure Division, Energy Conservation and Renewable Energy Department, Agency for Natural Resources and Energy

Ministry of Economy, Trade and Industry1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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