Publication date: March 30, 2026
METI Further Clarifies Key Elements of the Retailer Obligation Framework
In our previous newsletter, Japan’s Power Market News Week 7, we noted that the Working Group (WG) on System Design Based on the Review of Power System Reforms would further examine key design issues regarding the planned retailer’s obligation to secure 50% and 70% of supply volumes (in kWh) three years and one year ahead, respectively. The same WG recently held a meeting and further discussed the framework, and they decided on the following:
- Required supply volumes will be calculated based on past sales performance.
- If retailers fail to meet required supply volumes (in kWh), the government will issue guidance and recommendations under the Electricity Business Act.
- If the Balancing Group (BG) as a whole meets the procurement requirement, all retailers within the BG are deemed to have fulfilled their supply obligations(this applies even if some individual retailers within the group fail to meet their own targets).
- kWh secured from renewable sources can be counted toward supply capacity.
- Electricity futures will not be recognized as supply capacity, as they are financial products that do not involve physical delivery.
Looking ahead, METI will revise the format of supply plans by around autumn 2026 to accurately monitor retailers’ supply procurement status. The measure is scheduled to be implemented starting with the FY2030 supply plans submitted during FY2029.
🔍 Shulman Commentary: Key takeaway from this development is that the committee members have given greater consideration to retailers’ burdens, opting for guidance and recommendations rather than more stringent measures such as additional capacity contribution payments, thereby easing pressure on retailers. As the framework continues to evolve, market participants will need to closely monitor developments and factor potential impacts into their commercial planning.
Position your Japan power market strategy in the changing regulatory frameworks.