Statement by Minister Hayashi, Minister of Economy, Trade and Industry
Introduction of a Mechanism to Ensure the Effectiveness of the Voluntary Framework in the Electricity Field
February 9, 2016
- On February 9, 2016, the Ministry of Economy, Trade and Industry (METI) is introducing a system regarding the improvement of power generation efficiency and the reduction of CO2 emissions in the electricity field, toward the realization of Japan’s energy mix.
(Evaluation of the electricity industry’s voluntary framework)
- First of all, I would like to express my appreciation for the voluntary framework developed by the electricity industry. On February 8, the electricity industry announced the specific mechanism and rules of its voluntary framework. I appreciate this voluntary framework as an aspirational goal because it is:
- (1) consistent with the energy mix policies;
- (2) also consistent with CO2 emissions targets; and
- (3) involves the participation of main electricity retailers.
(Measures for ensuring effectiveness of the voluntary framework under electricity liberalization)
- Secondly, we will introduce measures to ensure the effectiveness of this voluntary framework under electricity liberalization. As the Minister of Economy, Trade and Industry, I received instructions from Prime Minister Shinzo Abe at the Public-Private Dialogue toward Investment for the Future held in November 2015, and we concluded that we would carry out system improvements to support this voluntary framework in terms of the political aspects in order to achieve CO2 emissions reduction targets while promoting the entry of new business operators into the market and investment, even under electricity liberalization. Specifically, we are to seek respectively:
- (1) At the power generation stage, the improvement of power generation efficiency under the Energy Conservation Law, and
- (2) At the retail stage, the reduction of CO2 emissions of electricity sold under the Act on Sophisticated Methods of Energy Supply Structures.
- It is expected that these measures will ensure the effectiveness of the electricity industry’s voluntary framework in principle.
(Collaboration between METI and MOE)
- Thirdly, I would like to mention the collaboration between METI and the Ministry of the Environment (MOE). The realization of Japan’s energy mix and the achievement of CO2 emissions reduction targets are two sides of the same coin. Thus, METI will proceed with the following efforts to be made to enhance the effectiveness and transparency of the framework while listening the opinions of Ms. Tamayo Marukawa, Minister of the Environment.
- (1) First, at the retail stage,
- pursuant to the Act on Sophisticated Methods of Energy Supply Structures, METI is to report retailers’ efforts to the Environment Minister;
- to request the disclosure of CO2 emissions coefficients; and
- to request cooperation concerning reports on CO2 emissions performance.
- (2) At the power generation stage, regarding improving the efficiency of thermal power generation under the Energy Conservation Law, I will listen to the opinions of Environment Minister Marukawa, who has concerns about increasing coal-fired power generation.
- In light of such opinions, METI is:
- not only to carefully scrutinize retailers’ reports on the results of their efforts made every fiscal year as a matter of course, but also
- to issue guidance or advice to retailers if they are deemed to be lacking in their efforts toward the achievement of their targets for power generation efficiency, for example,
- in cases where retailers continue operating their existing inefficient facilities without any rational reasons although they have already purchased new power generation facilities which meet energy conservation standards, or
- in cases where retailers fail to specify a specific plan toward improvement although there is a significant gap between their current power generation efficiency and the power generation efficiency targets for FY 2030.
- Furthermore, METI is to issue publications and orders in the end if retailers’ subsequent efforts are grossly inadequate even after they receive METI’s guidance or advice.
(Achieving a balance between the realization of a GDP of 600 trillion yen and CO2 emissions reductions)
- (1) First, at the retail stage,
- Thus, we are going to achieve a balance between the realization of a GDP of 600 trillion yen and the reduction of CO2 emissions through the electricity retailers’ voluntary framework, a series of measures stipulated by the Energy Conservation Law and the Act on Sophisticated Methods of Energy Supply Structures, and collaboration between METI and the MOE. We will incorporate these efforts into the Innovative Energy Strategy, which is to be compiled by the spring of 2016.
Divisions in Charge
Electricity Infrastructure Division,
Electricity and Gas industry department,
Agency for Natural Resources and Energy