Apr 1, 2013 - Mar 31, 2015

High Frequency Micro Data Analysis of Power Markets with Unbundling and Renewable Energy

Electric power utilities in Japan have been vertically integrated for long, even after the deregulation of the power industry. Regulatory authorities currently plan to undertake vertical unbundling of generation, transmission, distribution, and retail supply to promote active competition in the Japanese electric power industry. On the other hand,　since the Great East Japan Earthquake and the subsequent nuclear accident, Japan has been suffering from a serious shortage of power supply. In this circumstance, renewable energy is expected to grow and penetrate into the Japanese power markets in the near future. Renewables such as wind and solar photovoltaics have some special features: i.e., power supply from renewable energy is uncertain, intermittent, and volatile, which are different characteristics from those of conventional energy. Given these drastic changes in the power industry in Japan, this research project aims at developing empirical frameworks to investigate the impact of vertical unbundling, penetration of renewables, and other possible changes in the markets. Particularly, we focus on the high frequency micro data analysis using the data of spot power transaction in Japan Electric Power Exchange (JEPX) and the auction data of public power procurements.