Research Fellow Hiroshi Takahashi
Following the Great Tohoku Earthquake and tsunami of March 11, 2011, and the consequent stoppage of nuclear power plants across the country, Japan has suffered from extremely tight electricity supply-demand. Immediately after the disaster, Tepco enacted rolling blackouts, and in the summer a directive was issued for people to conserve power. In the summer of 2012, Kansai Power Company, which has a relatively high ratio of nuclear power plants, as well as power companies in other parts of Japan set energy-saving targets, and the tight supply-demand became a national issue. Nevertheless, except for the months immediately following the earthquake, large-scale blackouts have been avoided and the nation has not been thrown into chaos through excessive energy-saving directives. Some say that the greatest contributing factor is the fact that many consumers cooperated with energy-saving measures. This report aims to verify the truth of that claim.
In response to the greatest structural supply-demand tightening since WWII, consumers changed their consumption behavior to address the issue. During the summer of 2011, TEPCO saw an average peak cut of -20.7% in the Kanto area relative to 2010. In the summer of 2012, Kansai Power Company saw an average -11.9% peak cut compared to 2010. Recently, peak cuts achieved using smart meters have been called Demand Response (DR); the above is none other than a large-scale example of DR.
One possible reason behind the success of the above DR is that the power companies and the government carried the flag and led the charge of this national effort. In addition to making the electricity supply-demand status visible through daily “electricity forecasts”, they also created websites which compiled many ways of saving energy. Seeing these efforts, consumers changed their work style by removing some light bulbs and changing the thermostat settings in offices, enforcing “cool biz” dress codes, staggering distribution of vacation days, and even shifting production away from peak periods and onto weekends. By both consumers and the government and power companies working together seamlessly and dealing with the issue systematically, the country was able to overcome the tight supply-demand.
However, in the narrow sense of the term “DR”, i.e., incentives for peak cuts and use of price mechanisms, it is difficult to say that clever methods were used. Negawatt trading was attempted in places, but it did not yield significant results. In particular, many households do not have smartmeters, and so the conditions for real DR were still far from being reality.
Supply-demand will remain tight for the immediate future. Even if nuclear power plants continue to come back online, from the perspective of the increasing costs of fuel imports, reducing energy consumption and promoting peak cutting would have great social and economic benefits. Taking into account the empirical evidence contained in this paper, we must seek a smarter way of achieving DR as we undertake a reformation of the electricity system.