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The History of Japan’s Electric Power Industry

Electricity HouseThe Tokyo Electric Light Company, Inc. was Japan’s first electric power company. It was established in 1883. It has since become one of Japan’s leading industries, which has helped stabilize the country and let it achieve the status of an economic giant.

The TEPCO head office

The electric power industry in Japan has flourished largely through private enterprises. An exception to this is the period of World War 2, when the electric power industry was state-owned, from 1939 to 1951. Japan’s electricity production continued through private companies throughout the past.

During the early part of the 20th century, Japan saw the functioning of 700 private electric power companies. After the First World War, as global economic dynamics changed, the companies were merged into a total of 5. During this time, the methods of production of electricity changed from the steam engine to more sophisticated methods, such as hydroelectric power and thermal generators.

During World War 2 and even in the aftermath of the war, the margin between supply and demand of electricity remained very tight. The state decided to integrate the power companies into a state-owned firm, The Nihon Hatsusoden Co., which continued to supply electricity during the tough days of the war.

During the Second World War, Japan had difficulty making ends meet in the department of Energy. Following the US influence, in 1950, the US model for the distribution of electricity was put into place. The country was divided into nine regions, and a privately owned utility was given authority to supply the electricity in each zone. These units were called General Electric Utilities. There were 9 of them in Japan until 1972, after which Okinawa was acquired back, and the number of utilities became 10. Of these GEUs, Tokyo Electric Power, which includes the capital city Tokyo in its supply, is one of the largest private electric companies.

In 1952, to help the private companies, a government-owned facility came into being. It augmented the power supply of private companies when they were not able to meet demands post-war. It also worked for laying power transmission lines and overseeing the distribution and transmission of power.

Another such wholesale, state-owned company was set up in 1957. It was the Japan Atomic Power company, which was founded in 1957 to establish and develop the Atomic power for the production of electricity. During this post-war period, development took place in all industries – and so did the Electric power industry take flight. Along with the progress in the nuclear generation of electricity, coal-powered plants were also expanded, and more electricity began to be produced.

By 1994, 90 percent of the electricity in Japan was being supplied by the General Electric Utilities. The GEUs, although private, were not given a free hand to violate state rules. They were regulated under various acts. The Electric Utility Industry Law of 1964 strictly regulated the conditions at which the private companies were allowed to operate. The laws ensured that they supplied sufficient electricity to consumers, yet protecting them from exploitation. Also, these rules ensured that the monopoly of one company was not taken over by any other private set-up.

The utilities were to supply the electricity at state-regulated rates, on the economic model given by the USA.

Up until the 1970s, oil remained the primary source of power supply for Japan. The oil crisis in the 1970s saw oil prices reaching new heights, and this meant Japan had to seek alternative sources of energy production. This led to further development and investment in nuclear power, which was the future of electricity generation. Japan’s first commercial nuclear power plant had started operation in Ibaraki Prefecture in 1966.

From then onwards, nuclear power was the main focus, and many nuclear reactors were built and imported. The cost of electricity began to rise owing to the new methods of electricity production. This led to the government taking impactful decisions about the electric companies. The GEUs were deregulated, and many of the restrictions previously imposed were now removed.

In 2000, the GEUs were allowed to buy electricity from outside sources, and Independent Power Producers came into being, which could supply fairly cheap electricity to consumers. However, the main monopoly of the Utilities was maintained, and they were allowed to set and maintain the rates of electricity and oversee the supply and demand factors.

From the 1970s up to about 2010, the number of nuclear reactors increased to 52. Nuclear power formed a 30 percent share of all electricity supplies for Japan. Concerns for the safety of nuclear power continued, and various incidents took place throughout these years to have the nuclear source of electricity grow out of favor with the world and even among Japanese masses.

Tokaimura fuel reprocessing plant fire and explosion in 1997 resulted in the death of 37 workers and closure of the reactor for three years. The incidents continued throughout the 2000s. In 2002, the Tokyo Electric Company admitted that it had failed to report cracks in pipelines of the nuclear reactors. This put the population at risk and also raised further concerns about the safety of nuclear reactors for power generation.

The final nail in the coffin was the unfortunate earthquake, and Tsunami in Japan damaged some nuclear reactors, called the Fukushima Daiichi nuclear disaster, that left people in the ultimate fear of being exposed to nuclear radiation. Fingers were raised on the designs of the reactors and whether they were safe for the seismic history of Japan, as it is a country much prone to earthquakes. Because of these factors, the government decided to shut the last nuclear power reactor on 5th May 2012. And for the first time since the beginning of nuclear power, Japan had no source of nuclear power.

However, only a month later, two nuclear reactors were made operational again, as the Prime Minister ordered it was necessary for the livelihood of the people. By 2015, Japan had again started the production of nuclear-powered Electricity, vowing to further increase the percentage of electricity supplied by nuclear sources.

By 2014, Japan had become the fifth largest producer of electricity after the US, China, Russia, and India. The cost of electricity, however, remained high in Japan, owing to the expensive nature of nuclear power and the fact that the country heavily relies on imports in other forms of energy production. Japan has few indigenous fossils and has to import all sources of fossil fuel generation of electricity virtually.

Natural gas, oil, coal, wind energy, and now solar power have also been employed for the production of electricity in Japan. Despite the hassle of importing and the dilemma of the high cost of production, oil remains the main consumed fossil fuel for electricity production, forming 40 percent of all energy sources by 2017.


Electricity costs remain high while Japan looks towards expanding and taking the total percentage of nuclear power higher. This is because they want to be efficient producers of electricity and provide it to consumers at cheaper rates in the fast-growing industrial world.

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