Why Electricity Prices Will Not Fall Under Power Liberalization— The Inherent Limits of Renewable Energy —

Japan’s shutdown of nuclear power has led to an extreme dependence on thermal generation and a serious electricity shortage.
Power liberalization and the separation of generation and transmission favor producers, creating a seller’s market that keeps prices high.
Renewable energy remains fundamentally unstable, as its dependence on weather conditions cannot be overcome by technological progress.

2016-03-24
The following is a continuation of the previous section.
Therefore, if Japan wishes to lower electricity prices as in the Nordic countries, it has no choice but to build more dams, which is unrealistic, or increase nuclear power generation, which is even more unrealistic.
On the contrary, due to the shutdown of nuclear power plants, Japan is now in an abnormal state in which its energy balance has become overwhelmingly dependent on thermal power generation, leading to a severe and unforeseeable electricity shortage.
Under such conditions, the country is directly exposed to fluctuations in international crude oil prices and the linked natural gas market.
If the separation of power generation and transmission is implemented in such a situation, the generation side would gain an overwhelmingly advantageous seller’s market.
Quite frankly, from the perspective of power generators, maintaining a state of slight electricity shortage is preferable in order to keep selling prices high, eliminating any incentive to make efforts to lower prices.
Under electricity liberalization, power prices become subject to bilateral transactions with transmission operators, and the government’s oversight function to judge whether prices are appropriate disappears.
Under these circumstances, I cannot understand at all how electricity prices are supposed to fall.
As for the claim that renewable energy will increase, separating generation and transmission would instead critically hinder its expansion.
This is because renewable energy is inherently dependent on daily weather conditions.
It generates well on sunny days, produces nothing when it rains, wind turbines turn when the wind blows, but become completely useless when the air is calm, and this fundamental characteristic does not change regardless of technological progress.

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