Incentive-based demand response to be demonstrated in Japan

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Japan’s Ministry of Economy, Trade and Industry (METI) has initiated an incentive-based demand response demonstration project to demonstrate its potential in managing demand and providing balancing services.

Under the project utilities will conclude contracts with businesses and other demand response aggregators, who will receive compensation for demand-based events. METI aims to investigate the periods of time to undertake a demand response event – from issuing a request to completing the curbing of demand – as well as to ascertain the total power demand that could be curbed.

Since the Great East Japan earthquake hit Japan (in March 2011), the tight demand-supply balance of electricity at peak hours has become obvious. To date, the focus has been on measures to deal with such tight conditions from the viewpoint of how energy should be supplied, basically taking the demand as a given premise, while carrying out various energy saving measures. However, it is necessary for the country’s energy consumption patterns to be changed in a smart manner according to the energy supply, so as to establish an efficient electricity system.

Following a call for applicants, METI has selected six consortia to participate in the demonstration:

  • Eneres Co. Ltd and Tokyo Electric Power Company Inc. (TEPCO)
  • Global Engineering Co., Ltd, Toko Electric, Co., and TEPCO
  • Sojitz Corporation, Schneider Electric Japan Holdings Ltd, and TEPCO
  • Toshiba Corporation and TEPCO
  • Hitachi, Ltd, Tokyo Gas Co., Ltd, Daikin Industries Ltd, and TEPCO
  • Marubeni Corporation and TEPCO.

The project is expected to get under way when the preliminary project development is completed early in 2014.