The upper house of the Japanese parliament has adopted the final part of the electricity and gas market liberalisation, opening the energy market (worth Yen 10,500 bn/year or US$85bn/year) to investors. The ten dominating electricity companies (nine regional companies and wholesaler Electric Power Development, also known as J-Power) will be unbundled: their transmission and distribution activities will be transferred to dedicated subsidiaries, which will become legally-separate companies in April 2020. The government has already created a national grid company to overcome regional shortages. In addition, the retail power market will be opened to competition as of 1 April 2016.
In the gas sector, the new reform will fully liberalise the city gas market for retail customers as of 2017. The market is estimated at Yen 2.4 tr (US$19bn). As for electricity grids, gas transmission and distribution networks operated by the three largest city gas suppliers, namely Tokyo Gas, Osaka Gas and Toho Gas, will be transferred to companies that will become legally-separated on 1 April 2022, to open access for new entrants.
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