Amended EBA allows METI oversight of Balancing and planned Mid-Long Term markets

The amended Electricity Business Act (EBA) was officially passed by the House of Councilors on July 17th, 2026, and will come into effect in September. The amended EBA’s main provisions are as follows:

The Act establishes a financing scheme through the Organization for Cross-regional Coordination of Transmission Operators (OCCTO) to support large-scale power generation and grid infrastructure in anticipation of rising electricity demand. Using funds from the Fiscal Investment and Loan Program, OCCTO will provide loans for large-scale power projects, including nuclear power plants and offshore wind farms. The scheme will help meet the substantial long-term financing needs of such projects.
Power producers with total generation capacity of at least 100 MW will be required to consult the relevant transmission system operators (TSOs) before suspending or retiring generating facilities above a specified capacity. The requirement aims to provide sufficient time to develop the transmission infrastructure needed to maintain a stable electricity supply.
The government will be able to revoke the registration of electricity retailers that have recorded no electricity sales for at least one year (‘dormant retailers’). This measure aims to prevent criminal misuse of such licenses.
An independent third party will verify,before construction begins, that the solar power equipment, including its supporting structures, complies with the technical standards. Manufacturers and import distributors will also be required to make reasonable efforts to cooperate with investigations into the causes of accidents.
The Ministry of Economy, Trade and Industry (METI) will oversee the balancing market and the planned Mid-Long Term Market. This provision aims to ensure disciplined market operation and promote more active trading.

🔍 Shulman Commentary:

While the amended EBA covers a broad range of reforms, the common theme is preparing Japan’s electricity sector for a period of rising demand driven by AI, data centers, and decarbonization. Easier access to financing for strategic infrastructure, tighter oversight of generation retirements, and clearer governance in power markets should help accelerate investment while maintaining system reliability.

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