Last Updated July 22, 2019

Law and Practice

Authors



Nagashima Ohno & Tsunematsu is one of the foremost providers of international and commercial legal services based in Tokyo. The firm has over 450 lawyers, including over 30 experienced foreign attorneys from various jurisdictions, and its overseas network includes offices in New York, Singapore, Bangkok, Ho Chi Minh City, Hanoi and Shanghai, and collaborative relationships with prominent local law firms throughout Asia and other regions. The firm regularly advises leading power utilities, trading companies and investors on their energy projects as well as regulatory matters, and financial institutions on financing on those projects. The firm has dealt with a number of renewable power projects since the introduction of the feed-in tariff in Japan. The firm represented Tokyo Electric Power Company Group on establishing an alliance platform with Chubu Electric Power Co, Ltd in the fuel and power business (including the establishment of a joint venture company, JERA).

In general, the Electricity Business Act requires a person who intends to generate electricity for sale (unless its quantity falls below 10 MW) to notify METI of being an operator of Electricity Generation Business. The Act also requires the operator to be a member of OCCTO.

The operator is also required to proceed with an environmental impact assessment in accordance with the Environmental Impact Assessment Act (Act No 81 of 1997, as amended) (as modified by the Electricity Business Act) when it intends to construct a generation facility of a certain prescribed capacity. There are some local governments that establish their own environmental impact assessment process for the construction of a generation facility of a smaller capacity.

In general, the operator is required to file a construction plan of a generation facility with METI no less than 30 days prior to its commencement if it has a certain prescribed capacity.

With respect to the construction of a thermal power plant with a fossil energy source, the Act on Rationalising Energy Use requires the operator to endeavour to ensure that such thermal power plant satisfies a standard of power generation efficiency as set out in the Act and its related regulations.

With respect to a nuclear power plant, under the Act on the Regulation of Nuclear Source Material, Nuclear Fuel Material and Reactors, the permission of NRA is required for the installation of a nuclear reactor and the approval of NRA is required for its construction plan, and the operator has to obtain approval from METI on a construction plan in accordance with the Electricity Business Act.

Under the Electricity Business Act, a person who intends to generate electricity for sale (unless the quantity of electricity generated is below 10 MW) is required to submit to METI a notification form filled in with certain prescribed information such as location of the generation facility and the power source and other specifications of the facility. The operator is also required to submit to OCCTO an application for OCCTO’s membership prior to submitting the notification to METI. A generation facility so constructed must pass a pre-use investigation conducted by METI before it starts commercial operation.

The environmental impact assessment under the Environmental Impact Assessment Act (as modified by the Electricity Business Act) has the following steps.

  • Consideration statement – the operator prepares a statement of the environmental impact that the operators expect the construction to have, and submits it to METI for review; the operator is expected (but not obliged) to publish it to seek comments from the public.
  • Scoping statement – based on the consideration statement as revised to reflect METI’s comments and the public’s comments (if any), the operator prepares a statement defining the scope and methodology of the environmental impact assessment that the operator proposes to implement, submits it to METI and the relevant local government for review and publishes it to seek comments from the public.
  • Environmental impact assessment – based on the scoping statement as revised to reflect the comments of METI, and the relevant local government and the public’s comments (if any), the operator shall implement the environmental impact assessment.
  • Draft environmental impact statement – based on the environmental impact assessment implemented, the operator prepares a draft of the environmental impact statement, submits it to METI and the relevant local government for review and publishes it to seek comments from the public.
  • Environmental impact statement – taking into account the comments of METI, and the relevant local government and the public’s comments (if any), the operator prepares an environmental impact statement, submits it to METI for review and, based on METI’s feedback (if any), finalises the environmental impact statement, submits it to the relevant local government and publishes it. METI has the authority to issue an order to further revise the environmental impact statement if it thinks such revision necessary to ensure due consideration of environmental impact.

Under the Act on the Regulation of Nuclear Source Material, Nuclear Fuel Material and Reactors, the operator may not install a nuclear reactor without obtaining the permission of NRA and approval of its construction plan from NRA.

An operator of Electricity Generation Business owes, in particular, the following obligations pursuant to the Electricity Business Act and its secondary regulations:

  • to supply electricity, as directed by the transmission and distribution network operators to balance the demand and supply of electricity within the network;
  • to join OCCTO;
  • to supply electricity in accordance with an order that METI may issue (such order has never been issued);
  • to prepare and submit a supply plan to OCCTO;
  • to submit its financial statements to METI;
  • to submit a report on its performance and operation result, etc; and
  • to comply with the Network Codes.

The Expropriation of Land Act (Act No 219 of 1951, as amended) amendments of 2017 and thereafter are not reflected)

empowers an operator of electricity business under the Electricity Business Act to expropriate a piece of land for its business in exchange for paying just compensation to the right-holder, following the procedure set out therein.

In order to expropriate land lots, the operator must first obtain approval from the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) or the relevant local government, as the case may be, on an undertaking that necessitates expropriation. After obtaining such approval, the operator files for expropriation with the Expropriation Committee, which will grant to the operator an award of expropriation unless the undertaking is found to be materially different or materially differently implemented than as explained to MLIT or the relevant local government.

If an operator of Electricity Generation Business intends to suspend or terminate the whole or a part of its business, it must submit an ex ante notification to METI. In addition, if the operator decommissions a generation facility that has an installed capacity of 100 MW or more, such operator must submit an ex ante notification to OCCTO in accordance with the Network Codes of OCCTO.

With respect to a nuclear power plant, the operator must prepare a decommissioning plan and obtain approval from NRA for the plan under the Act on the Regulation of Nuclear Source Material, Nuclear Fuel Material and Reactors.

Nagashima Ohno & Tsunematsu

JP Tower
2-7-2 Marunouchi
Chiyoda-ku
Tokyo
Japan
100-7036

+81 3 6889 7000

+81 3 6889 8000

info@noandt.com www.noandt.com
Author Business Card

Authors



Nagashima Ohno & Tsunematsu is one of the foremost providers of international and commercial legal services based in Tokyo. The firm has over 450 lawyers, including over 30 experienced foreign attorneys from various jurisdictions, and its overseas network includes offices in New York, Singapore, Bangkok, Ho Chi Minh City, Hanoi and Shanghai, and collaborative relationships with prominent local law firms throughout Asia and other regions. The firm regularly advises leading power utilities, trading companies and investors on their energy projects as well as regulatory matters, and financial institutions on financing on those projects. The firm has dealt with a number of renewable power projects since the introduction of the feed-in tariff in Japan. The firm represented Tokyo Electric Power Company Group on establishing an alliance platform with Chubu Electric Power Co, Ltd in the fuel and power business (including the establishment of a joint venture company, JERA).

{{searchBoxHeader}}

Select Topic(s)

loading ...
{{topic.title}}

Please select at least one chapter and one topic to use the compare functionality.