Publication date: March 7, 2026
METI Moves to Tighten Oversight of Electricity Markets
METI plans to expand its supervisory scope over electricity markets to enable it to ensure operational improvements in the Balancing Market and the planned Mid-Long Term Market,with the aim of promoting sound market operation, increasing participation, and stimulating market activity. The proposed changes include:
- In addition to the current supervision of the spot market, METI will increase its governing authorityover the Balancing Market, as well as the planned Mid-Long Term Market.
- The Minister of Economy, Trade, and Industry will designate the entitiesthat operate electricity trading markets, including the Balancing Market.
- METI will review trading rules and require corrective actions in cases of inappropriate operations.
METI plans to incorporate these measures into a proposed amendment to the Electricity Business Act (EBA) and submit the bill to the ongoing extraordinary Diet session. The proposed amendment bill also includes the introduction of institutional measures allowing public financial institutions to provide loans to power companies in order to facilitate large-scale investments in power generation and transmission networks.
🔍 Shulman Commentary:The expansion of METI’s authority into this market implies a shift toward stronger central oversight of Japan’s evolving electricity trading framework. While the Balancing Market has so far been operated by the TSOs with limited direct regulatory intervention, bringing it formally under METI’s supervision would align it more closely with other regulated power markets. For market participants, the reform suggests that governance, rule-making, and monitoring of trading behavior are likely to become more structured as liquidity grows and new markets such as the Mid-Long Term Market emerge. Over time, this could improve transparency and credibility of the markets, but may also introduce additional compliance expectations for traders and flexibility providers.
Position your Japan power market strategy in the changing regulatory frameworks.