Updated: Oct 28, 2021
What kind of electricity does your home use?
From which energy provider do you buy your electricity? Where is that electricity generated? Since 2016, private households can choose their electricity provider from various power companies. Electricity has no shape and color. In our everyday lives, we don’t have much reason to think about it. However, there are actually many stories behind the electricity at home.
Before the change, huge regional energy companies (TEPCO or KEPCO) were fully responsible for generating, distributing, and selling energy. You had no choice in where you got your electricity from. Slight changes in policies in 2000 and 2005 led to more energy producers and suppliers (other than the big providers). Large commercial facilities or office buildings could buy their power from new providers. Yet, private households still had no choice other than to get their electricity from the large local power companies.
That all changed in 2016. I'm sure you've all seen the TV commercials, train ads, or advertisements that say "Why don't you switch your electricity too" or "Save money together" when you switch your cell phone.
You may be wondering if you will have to install new power lines, but the fact is that the physical flow of electricity will remain exactly the same as before. The major power companies are still responsible for managing and operating the power lines and delivering electricity to your home. The new electric power companies (electricity retail companies) that have entered the market as a result of deregulation are the companies that handle the procedural contact with customers. To put it simply, as long as they have a computer, everyone can become a new energy provider. Thus, many companies or organizations that seem unrelated to energy are also popping up as power producers and suppliers.
What is an Energy Provider Focusing on Renewable Energy?
Many of these newly emerging power companies focus on renewable energy. How electricity is sent to your home does not change. But where you buy your electricity or how the profit that energy providers make is used changes. Let’s have a look at the several types of energy providers.
<Energy Companies Based on Co-ops>
A co-op (consumer cooperative) is a system in which consumers become members and jointly purchase food and daily necessities. They place great importance on selecting products that are carefully selected for their origin and raw materials. Many coops have been actively promoting a shift to sustainable energy sources while stopping nuclear power. Therefore, many co-op based electricity companies focus on renewable energy.
Co-op based power companies focus on generating power from renewable energy sources built with the participation of members. Their renewable energy sources are associated with food production areas, and renewable energy sources of citizens. Co-op based power companies are also characterized by a high ratio of renewable energy and FIT electricity (electricity from renewable energy sources supported by the renewable energy feed-in tariff system). They also support the active disclosure of power source composition and power sources. If you have a choice between a “renewable energy oriented plan” and a “low price oriented plan,” choose the renewable energy oriented plan.
＜New Power Companies by Local Governments＞
There are currently about 40 "new municipal electric power companies" in Japan, in which local governments have invested and become involved. The key points are whether they are utilizing local renewable energy sources, whether they have plans to increase the number of renewable energy sources in the future, and whether they have properly positioned renewable energy sources and new municipal power projects in their local plans. It will also be interesting to see how they use part of the electricity sales to support and revitalize local communities, such as by watching over the elderly, supporting child-rearing, and other local activities.
<Various Private Power Companies>
There are a number of private power companies that have been established by local gas companies, solar power companies, etc., that focus on the local community without the involvement of the local government. The point is that they buy and sell local power sources such as small-scale solar power generation from the community or solar power from household roofs.
There is also a great variety of other unique companies. For example, power providers operated by local organizations focusing on renewable energy, energy companies that use parts of their profits to give to NPOs, welfare projects or local activation projects, and more.
How to Choose and Switch to a Renewable Energy Company
Even if many companies focus on renewable energy, they all have different characteristics and goals. In 2015, environmental NGOs and other organizations launched the “Power Shift Campaign” to introduce power companies and the following guidelines to encourage consumers to make their own choices.
The company should:
1. Have a philosophy of "shifting to a sustainable, renewable energy society”
2. Disclose information such as power source composition
3. Procure power mainly from renewable energy sources.
4. Have renewable energy supply that is sustainable
5. Emphasize energy from local communities and citizens
6. Not use nuclear or coal-fired power generation.
7. Not have a capital relationship or cooperation with major electric power companies
Try to choose one company by finding a goal or story that you want to support.
The Power Shift Campaign website also includes information not available on the companies’ websites, such as the reasons for starting the power business, the president’s thoughts, the difficulties they are facing, and the direction they are aiming to take.
When you find a company you would like to support, the switching procedure is effortless. The only thing you need to do is enter your contact information on the company’s website of your choice. When entering your information, you will need your “Customer Number and Supply Point Identification Number.” You can find these numbers on your electricity bills. The power company you apply to will handle the contract transfer (switching) procedures, so there is no need to contact your existing power company to "cancel" your contract. In this sense, it is much easier than changing your phone number. Even if you live in a rented apartment or condominium, you can switch as long as the contract is not for the entire building.
Let’s Think About the Flow of Money! The Meaning of Choosing Renewable Energy
Choosing electricity is choosing the future. It is as effective as voting. This is because it can change the flow of money, the cost of electricity. The electricity market as a whole is about 15 trillion yen, of which about 7.5 trillion yen is in the household sector, and we can decide for ourselves how to spend this money, which before 2016 all went to the major power companies. People who have switched have commented that they feel refreshed and have a sense of security that they are connected to renewable energy. It makes a difference how the electricity bill you pay is used.
On the other hand, deregulation of electricity is not always a good thing. Price competition means that each company will be forced to take a hard look at how to reduce costs and purchase electricity at low prices. As a result, the construction and operation of coal-fired power plants, which can procure fuel cheaply, has been greatly promoted since 2012, and old nuclear power plants have been restarted to use them longer. It is essential that we work to change our energy policies, and at the same time, as consumers, we must actively choose renewable energy.
Finally, it is important to note that energy and climate change issues can never be discussed in isolation but are influenced by many more factors. Sharing the thoughts and efforts of people connected to the community, society, food, and way of life will be the key to expanding the choice of renewable energy in the future.
For a map of Power Shift Campaign-featured electric companies, please follow this link. (Japanese only/ from the Power Shift Campaign Website)
About the Author
Power Shift Campaign Representative
Akiko Yoshida is in charge of climate change & energy policy at the Global Environment NGO FoE Japan. She manages the office of the “e-shift” network, created after the 2011 Tōhoku earthquake and tsunami, and is actively involved in bringing the people’s voice to policymakers in charge of energy policies.
She created the “Power Shift Campaign” in 2015 with various environmental organizations to broaden the choice for renewable energy with the power of the people.