(Bloomberg) — In a couple of years, Japan will be paying the highest rates in the world to incumbent power utilities simply for maintaining generation capacity, including coal and nuclear plants, to help meet electricity demand in times of scarcity.
That windfall comes at a time when Japan is seeking to liberalize its market, encourage new entrants and boost the use of renewables. That’s why the extra billions to traditional power plants don’t sit right with Environment Minister Shinjiro Koizumi, who said Tuesday the system should be reformed so that it helps expand Japan’s clean energy capacity.
“I have heard from new entrants in power retailing that the system could deal a serious blow to their businesses,” Koizumi said during a briefing in Tokyo. “It needs to be reformed so that it will promote expansion of clean energy.”