Japan’s Power Grid: Interconnections

The peculiar structure of Japan’s electricity grid is interesting enough to merit examination as a free-standing topic, which we’ve done in an earlier report.  

Today we’d like to get into the history of how Japan’s grid came to be structured the way it is, how the interconnections between grid zones have been utilized over time, and the way decisions about the grid are becoming ever more deeply intertwined with Japan’s deregulated electricity retail market and its plans to continue introducing more variable renewables.  

Japan’s Fragmented Electricity Grid

Japan’s electric power industry began in the 1880s with the establishment of several privately owned utilities, which grew to number over 800 by the 1930s. The pressures of the Great Depression led to consolidation until there were five integrated utilities. In 1939, the government brought all electricity generation and transmission under centralized control by creating the Japan Electric Generation and Transmission Company.  

In May 1951, during Japan’s postwar reconstruction, JEGTC was dissolved and the privately owned regional monopoly structure which persisted until the recent deregulation of electricity retail was created.  (Credit: Japan Electric Power Information Center)

In the 1970s, development of power generation in Japan focused on large scale plants, and grid interconnections between regional utility zones were constructed for the purpose of maintaining the stability of electricity supply in case of unplanned outages at large generation plants. The integration of the fast growing large hydropower generation segment into the national electricity supply structure was an additional impetus for construction of the interconnections.  

During this period, the regional utilities struggled to overcome technical problems such as the transmission of electricity in the sea and on the seabed, as well as frequency conversion. For this reason, the Electric Power Development Co., Ltd. (J-Power), of which the national government owns substantial shares, independently researched and developed ultra-high voltage transmission technology, marine and seabed transmission technology, and DC transmission technology, and has played a leading role in the construction and improvement of technically challenging interregional transmission facilities. Because of this historical background, J-Power owns and manages a significant portion of the country’s important interregional systems.

Although the original intent of the interconnections was to be able to move power between zones in case of emergency, the utilities in fact got in the habit of using them to handle more pedestrian issues such as seasonal shifts in demand.  Nonetheless, as of FY 2003, the average utilization rate of the grid interconnections hung at 27%. Even during the peak demand month of August, it didn’t go beyond about 65%.  

Grid Interconnections and Interzonal Transmission

At this point, there is a combined total of 14 interconnections between the nine contiguous zones with a combined capacity of 42,320MW.

The zone with the largest interconnection capacity to its adjacent zones is Kansai, the main zone of the western part of the country. It has a total of 9,940MW of transmission capacity to and from Chubu, Hokuriku, Chugoku, and Shikoku combined.

As far as a single pair of zones is concerned, the interconnection between Tokyo and Tohoku is, at 5,150MW, the largest.

Also worth noting are the three interconnections between Tokyo and Chubu which provide a combined transmission capacity of 1,200MW. Those are not only bridging two separate grid zones, but also convert frequency between the 50 Hz used in the eastern part of the country and 60 Hz used in the western part of the country.

While there are efforts to increase the capacity of some of the zone pairs, as mentioned earlier, the interconnections are in many cases underutilized.

Between fiscal years 2014 and 2018, by far the most utilized connection was the one between Tohoku and Tokyo. Perhaps unsurprisingly considering that the Tokyo zone consumes 37% of Japan’s electricity, 122,493MWh of electricity were transferred from Tohoku to Tokyo during that time period compared to just 22,613MWh in the other direction.

The Kyushu zone, one of the country’s hubs for renewables, is worth noting as well. During the same period it exported 78,104MWh to Chugoku, the only zone it has an interconnection with. Having only imported 12,717MWh during the same time period, it has the highest export-to-import ratio of the nine zones.

Interconnections in Action: 2011 Great East Japan Earthquake

Interconnections played an important role following the March 2011 earthquake, tsunami and Fukushima Daiichi nuclear accident and the resulting power outages. The Tohoku grid zone, where damage was heaviest, drew 600MW through its interconnection with the Hokkaido zone, and more than 1,000MW from western Japan, including a portion that came through the 60 Hz to 50 Hz frequency conversion stations.  

All of TEPCO’s 17 nuclear reactors were taken offline in the aftermath of the accident, putting an enormous dent in TEPCO’s generation capacity. There were multiple instances of TEPCO using its interconnections to import the power needed to make up the shortfall during summertime peak usage. There were instances of TEPCO drawing more than 5,000MW from adjacent zones during this period.  

The Future: Increasing Capacity and Shifting Purpose

In February of 2013 the Special Committee on Electricity System Reform of the Advisory Committee for Natural Resources and Energy, part of the Ministry of Economy, Trade and Industry (METI), sent a report to the Prime Minister’s Cabinet which led to the enactment of the Policy on Electricity System Reform in April of the same year.  

This set the gears in motion toward the full deregulation of the Japanese electricity retail market which occurred in April 2016.  

The first phase of the reform process centered on the creation of the Organization for Cross-regional Coordination of Transmission Operators (OCCTO), which would be responsible for overseeing the use of the interconnections between grid zones.  

OCCTO’s key mission is to create a more unified national electricity supply system, with a number of goals in mind: instill greater resilience; lower consumer electricity rates through nationwide competition underpinned by a neutral transmission sector; and facilitate the introduction of more variable renewables through better management of supply and demand across grid zone boundaries.  

Plans are in place to expand interconnection capacity between Tohoku and TEPCO from 5,150MW today to 9,700MW in FY 2027.  The 1,200MW interconnection between TEPCO and Chubu is to be increased to 2,100MW within FY 2020, and 3,000MW in FY 2027.  

METI is examining possible approaches to covering the costs for interconnection expansion.  It appears likely that a uniform nationwide surcharge will be levied on electricity consumers, similar to the surcharge which has been used to fund the renewable feed-in-tariff system since 2012, to cover a substantial portion of the costs. The justification is that greater grid interconnection capacity will lead to lower electricity rates and reduce carbon emissions, which are benefits to all electricity users.  

Notably, the competent METI committee examining this issue is the Subcommittee on System Reform for Renewable Energy as Main Power Source, and the ultimate decision about covering the costs will be enacted through an amendment to the Renewable Energy Act.  This is a strong indication that investment in the grid is coming to be viewed squarely in the context of plans to introduce more renewable power generation.  

Stay Tuned

We will be closely tracking how plans evolve for the interconnections between Japan’s regional grid zones, and we will take deeper dives into how this relates to Japan’s competitive electricity wholesale and retail market and to plans to introduce more renewables into Japan’s energy mix in the weeks and months ahead.