Publication date: Feb 17, 2026

METI Allows BG-Based Joint Procurement for Retail Supply Obligations

The Ministry of Economy, Trade and Industry’s (METI) Working Group (WG) on System Design Based on the Review of Power System Reforms decided the following points regarding the planned retailer’s obligation to secure 50% and 70% of supply volumes (in kWh) three years and one year ahead, respectively:

– Joint procurement by demand balancing groups (BGs) will be allowed. Future discussions will address preventing double-counting of procurement volumes between the BG representative and child BGs, and whether retailers with sufficient supply should face penalties if the BG as a whole falls short.

– Renewable energy sources will count towards supply volume requirements. The scheme would not distinguish between load profiles such as base or middle supply. Power sources under the FIT (Feed-in Tariff) and FIP (Feed-in Premium) schemes will also be included.

– Mechanisms to prevent retailers from deliberately underestimating demandneed to be designed. One proposal was to base demand estimates on recent sales performance, but further deliberations are needed, especially in the case of retailers expecting declining demand due to customer attrition.

– For retailers that fail to secure the required volume, penaltiessuch as either imposing additional capacity contribution payments under the capacity market or giving guidance or warning under the Electricity Business Act are being considered.

🔍 Shulman Commentary: Allowing BG joint procurement should ease compliance pressures, especially for smaller retailers with limited standalone contracting capacity. As METI clarifies rules on volume allocation, demand estimation, and penalties, procurement strategy will become increasingly tied to BG structuring, requiring retailers to reassess contracting and participation to manage compliance risk.

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