Presentation of the case in Japan for Technical Committee K - Integrated Operation of Hydropower Stations and Reservoirs- Centers for Civil Engineering and Architecture Kansai Electric Power Co., Inc. July, 2017

Contents Electricity Market in Japan Case Study in Japan for Optimization of Integrated dispatch of cascade reservoir

1. Electricity Market in Japan- Histroy History Electricity market reform in Japan has been started since 2003, and full deregulation of electricity retail business was made in April 2016. Mar. 2003 Apr. 2004 Apr. 2005 Apr. 2016 Contracted Capacity (Voltage) Deregulation Deregulation Deregulation Deregulation Larger Scale factories 26% Larger Scale factories and super market 40% Larger Scale factories 62% Larger Scale factories 100% 2,000kW (20,000V) Regulated Regulated 50kW (6,000V) Small scale/ Household 74 % Small scale/ Household 60 % Small scale/ Household 38% (100-200V) Japan Electricity power Exchange

1. Electricity Market in Japan- Current Reform Process Three phases of the current electricity market reform is under the process during 2015-2020. Present 2015 2016 2020 Establishment of the Organization for Nationwide Coordination of Transmissions Operator Full Liberalization of electricity retails business Elimination of whole regulation Legal Structural separation of power transmission/distribution sector Full liberalization of retail electricity rates

1. Electricity Market in Japan – Overall Scheme Provision of Back-up Capacity Original Electricity Utility Customers Independent power producers JEPX New Electricity Utility Wholesale Electricity Utility (J-Power and The Japan Atomic Power Company) Customers

Transaction Volume through Electricity Market in Japan This graph shows the trend of the transaction volume through Japan Electricity Power Exchange (JEPX) Only 2.8% (max. 3%) of the total demand of electricity is treated through the market as of Oct. 2016. Total demand Transaction ratio in JEPX Total demand (Billion kWh) Transaction ratio in JEPX (%) Apr, 2012 Oct, 2012 Apr, 2013 Oct, 2013 Apr, 2014 Oct, 2014 Apr, 2015 Oct, 2015 Apr, 2016 Oct, 2016 Source: Ministry of Economic, Trade and Industry, Japan

Share of new Electricity Utilities in Japan Total share of New Electricity Utilities is 7.7% of the total sales. High Voltage (new Electricity utility) High Voltage (original Electricity Utility) Low Voltage (new Electricity utility) Low Voltage (original Electricity Utility) High Voltage Share of New Electricity Utility :10.5% Total Share of New Electricity Utility :7.7% Total sales (Billion kWh) Low Voltage Share of New Electricity Utility :2.5% Apr, 2012 Oct, 2012 Apr, 2013 Oct, 2013 Apr, 2014 Oct, 2014 Apr, 2015 Oct, 2015 Apr, 2016 Source: Ministry of Economic, Trade and Industry, Japan

Peak load and interconnection in Japan There are 10 major original electricity utilities in Japan. Since 2003, IPP and /or PPSs has been participated in the electricity market. Source: Ministry of Economic, Trade and Industry, Japan Peak load and interconnection between different Major Electricity Power Company areas, 2014

Sources of Electricity in Japan LNG Coal Nuclear LNG Coal Nuclear Oil Pumped storage Hydro Oil Pumped Storage Hydropower Renewable Others Renewable Others Original Electricity Utility Total of Power Capacity others Source: METI, Japan

Procurement of Electricity by new Electricity Utilities Procure from own source or bi-lateral contract Procure from Back-up capacity Procure from JEPX Ratio of back-up capacity Ratio of JEPX Full- deregulation Ratio (%) Total sales by new Electricity Utilities (Billion kWh) Sep, 2012 Mar, 2013 Sep, 2013 Mar, 2014 Sep, 2014 Mar, 2015 Sep, 2015 Mar, 2016 Sep, 2016 Source: Ministry of Economic, Trade and Industry, Japan

Incentives for Renewable Energy Producers Feed in Tariff (FIT) :the Japanese government has introduced a feed in tariff for renewable energy generation since 2012 and found several issues on the current incentives and/or market mechanism such as unbalanced source (90% is solar power) increment and increase burden of customers. New mechanism for renewable energy source is under discussion among the relevant government committees. Several measures for hydropower development subsidiary for a study or replacement and/or construction of new hydropower development, Shortening the approval process/ examination period for small scale hydropower development (less than 2,000kW) such as i) less documentation (avoiding duplication of submittals and unnecessary review of existing water right) , ii) authorization empowerment to provincial level),and iii) others.

Optimization of Integrated dispatch of cascade reservoir Items to be considered More accurate forecast of rainfall and/ river discharge in each catchment area long term climate change short/middle term (daily, weekly, monthly basis) Optimization of Reservoir Operation How to decide objective function for optimization of reservoir operation of each dam (flood control, power generation, water supply, irrigation…) Storage capacity allocation (also allocation of cost/expense and benefit) Different characteristic of rainfall in each catchment area Purpose of dam Hydropower Flood control Irrigation water supply

Case Study- share storage capacity for flood control Tonoyama dam (H=64.5m, Concrete-Arch type ) was completed in 1958, which is owned by Kansai Electric Power Company located in the upstream of Hiki river in Wakayama prefecture, Japan. (P=15,000kW, Q= 26m3/s and He= 69m) Design flood is 3,000m3/s and effective capacity of the reservoir is 13.8 million m3 for hydropower generation only (originally there is no flood control capacity). In general, central/ local government is responsible for flood control of each river basin and any private companies have no capacity to control flood unless government shares burden of each dam or makes an agreements in advance. According to an agreement with the local government, a part of capacity (1.8 Mm3) has been provided for flood control as a cooperation basis since 2012 in case that a large flood is predicted. Tonoyama Dam Min. water level Original 　　112.0m New target Water level 　　109.0m Water level to be expected effectiveness of flood control Capacity for flood control ＋1,857,000m3 Sediment Capacity for Hydropower generation Orifice gate Crest Gate Dead capacity Minimum operation water level 3.0m Location of Tonoyama Dam Another case study of “Study on validity of the hydroelectric dam operation adopted GSM and the information about typhoons) in the proceedings of ICOLD this year.

Summary Hydropower in market (case in Japan) Incentives for renewable energy has been provided to developers both of original / new power utilities in Japan recently. Challenges on the current mechanism to expedite development of renewable source in Japan are, i) mechanism for fair/ reasonable tariff determination, and ii) resolve unbalanced renewable energy development. The optimal operation of reservoirs and hydropower stations. A case study in Japan is introduced. Need to discuss contents of TOR-1 further