To improve electricity market efficiency and create a system capable of reliably accommodating greater renewable energy penetration, METI is conducting an in-depth review on introducing a simultaneous electricity market (同時市場) – a fundamentally new approach to power trading in Japan.
In a simultaneous market, generation and consumption of electricity are balanced in real-time, optimizing dispatch and pricing through a centrally coordinated system. This approach integrates electricity supply and balancing services into a unified framework capable of effectively managing real-time volatility in both production and demand. Additionally, it facilitates better coordination among various ancillary and reserve services, potentially reducing the costs associated with balancing power procurement.
Implementing such a system will necessitate significant structural changes in electricity bidding processes, market offers, and methods for securing adjustment volumes. Although inspired in part by the PJM (Pennsylvania-New Jersey-Maryland) system – the largest independent system operator (ISO) in the U.S. – METI’s deliberations on the simultaneous market are already entering their third year. Nevertheless, recent discussions indicate increasing confidence that Japan can successfully adapt and implement this market structure.