Japan Solar Update: No.34 (Feb 27 ~ Mar 3, 2023)
<Key points 2>
- A new wheeling charge system (revenue cap system) will be introduced in April 2023. The system aims to realize both securing necessary investment and improving cost efficiency of general power transmission and distribution operators, to make renewable energy a main power source and to strengthen resilience, etc.
- The unit prices of the wheeling charge which general power transmission and distribution operators applied for approval per kWh are generally in the 2 Yen (1.54 cents) range for extra high-voltage, 4 Yen (3.07 cents) range for high-voltage and 8 – 10 Yen (6.14 – 7.68 cents) range for low-voltage in nine areas excluding Okinawa
New wheeling charge system (revenue cap system) Effective from April 2023
Outline of the system
- General power transmission and distribution operators formulate business plans that clarify the targets* to be achieved within a certain period (regulatory period: 5 years) based on the guidelines established by the national government
- Based on the national government’s approval of the maximum revenue which is the estimated necessary costs to implement the business plans above, general power transmission and distribution operators flexibly set their wheeling charges within the limits
- Under this system, the comparisons, evaluations, examinations and assessments among operators will be implemented by the national government at regular intervals to return the results of cost efficiency improvements to the grid users
*Examples of target areas: stable supply, expanding introduction of renewable energy, digital transformation (DX), next-generation, etc.
Average unit price (JPY/kWh) by voltage for wheeling charges applied for approval (Revised rate from the current revenue unit price)
Rate menus and unit prices set by each general power transmission and distribution operator will be confirmed to have not problems and the results of the examination will be reported to the Electricity and Gas Market Surveillance Commission (EGC).
Figure 2 Summary of the new wheeling charge system (revenue cap system) Source: Materials of the Experts’ Meeting on the charge system, compiled by RTS Corporation