[en] After the Great East Japan Earthquake and the subsequent nuclear accident, nuclear power stations cannot be presumed perfectly safe any longer and can be hardly allowed to restart in Japan. We develop a nine-region spatial equilibrium model for Japan's power market and simulate two-part situations: (a) none of the nuclear power plants can operate any longer and (b) gas turbine combined cycle (GTCC) power plants are installed to cover the lost nuclear capacity. When all the nuclear power plants are shut down, the average power prices would rise by 1.5–3 yen/kWh. By replacing that lost capacity with GTCC power plants, we could compress the average price rise as high as 0.5–1.5 yen/kWh compared with the status quo. Their impact would differ by region on the basis of the share of nuclear power in their plant portfolios. After the nuclear power plant shutdown, regions with abundant nuclear capacity would not be able to afford to sell their power to other regions, which would cause less serious congestion at the inter-regional transmission links. The installation of GTCC power plants would make the plant portfolios more similar among regions and, thus, reduce inter-regional transmission further, which would very rarely cause congestion. - Highlights: • Nuclear power shutdown in Japan is simulated with a 9-region model. • It would raise the power price by 1.5–3 yen/kWh on average. • Installation of gasturbine plants would suppress the rise down to 0.5–1.5 yen/kWh. • It is effective especially for peak times. • These shocks would reduce inter-regional transmission and thus congestion.

[en] The Fukushima Daiichi Nuclear Power Station held by Tokyo Electric Power Company (TEPCO) had a serious nuclear accident in March 2011. TEPCO's liability for the losses caused by this accident is speculated to reach several trillion yen. For this compensation, TEPCO is supposed to sell its assets, including those for its power business. Their sales are crucial for its solvency. We estimate the fundamental values of TEPCO's thermal plants by modeling their plant operation patterns based on spot market prices and fuel costs. Then, we discuss the implication of their divestiture for TEPCO's reparations in the context of the regulatory reforms as a radical path to unbundling, which has not yet been achieved due to the strong resistance from the incumbents.

[en] In the assessment and review of regulatory reforms in the electric power market, price elasticity is one of the most important parameters that characterize the market. However, price elasticity has seldom been estimated in Japan; instead, it has been assumed to be as small as 0.1 or 0 without proper examination of the empirical validity of such a priori assumptions. We estimated the regional power demand functions for nine regions, in order to quantify the elasticity, and found the short-run price elasticity to be 0.09-0.30 and the long-run price elasticity to be 0.12-0.56. Inter-regional comparison of our estimation results suggests that price elasticity in rural regions is larger than that in urban regions. Popular assumptions of small elasticity of 0.1, for example, could be suitable for examining Japan's aggregate power demand but not power demand functions that focus on respective regions. Furthermore, assumptions about smaller elasticity values such as 0.01 and 0 could not be supported statistically by this study.