Koizumi agony over capacity market results: "Give me a more transparent explanation,"
As for the high price of the first bid for the "capacity market" of electricity, Environment Minister Shinjiro Koizumi said at a Cabinet meeting on May 29 that "the burden on households that have contracts with retailers that mainly deal with renewable energy will be particularly high. A transparent explanation of why it is so high is required."
The capacity market will value the power plant's capacity four years from now to prevent future power shortages. The first bid was held in July, and the price for fiscal 2024 was 14,137 yen per kilowatt, the upper limit set by the government. The total burden amounts to about 1.6 trillion yen. While it will increase revenue for major power plants with many power plants, new new power for new entrants who do not have power generation facilities will be burdened. For this reason, "very high price" from the new electric power, "shocking and unacceptable. "It is related to business continuity," and there are calls for a review of the rules of the system and the results of bids.
The electricity market is under the jurisdiction of the Ministry of Economy, Trade and Industry, but Mr Koizumi himself referred to the issue. He pointed out that the price is about five times higher than in the UK, more than twice as high as in the US, and more than ten times that of France, which is simply higher than the overseas capacity market. "We need to be able to clearly explain to the public whether it is really valid, and we want to do what we can as the Ministry of the Environment. We will see how this will affect the government's policy of turning renewable energy into a major power source."