• Kyodo

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The government is planning to launch talks on measures to thoroughly reform the electric power industry by 2020, such as separating electricity generation and transmission, and reviewing utilities’ regional monopolies, sources said.

The move comes as the nation struggles to end the crisis at Tokyo Electric Power Co.’s Fukushima No. 1 nuclear plant, an emergency that led Germany to decide to close all of its atomic plants by 2022.

A panel to be created under the Council on the Realization of the New Growth Strategy will begin deliberations in early June and try to map out a basic course of reform by the end of the year, the sources said Monday.

The establishment of the new panel means the new growth strategy council will take over the role of working out energy policies from the Ministry of Economy, Trade and Industry.

At present, 10 electric power utilities handle everything from generation to transmission to retail and are granted monopoly status in their service regions.

Although the power generation business was partially liberalized in the late 1990s, few new companies have entered the market as the 10 utilities maintain strict control of power transmission networks.

Issues to be taken up by the new panel will include a review of the existing system of transmitting electricity from large power plants to the whole of each service region. The panel is expected to examine ways to transmit electricity through output from smaller plants using wind, solar and other natural energy sources, the sources said.

The panel, to be headed by national policy minister Koichiro Genba, will also discuss how to introduce a smart-grid electricity network that uses information technology to efficiently deliver electricity.

Near-term issues will include reinforcing power cables connecting the utilities and facilitating the entry of companies with private generators into the power supply market.

At the recent summit in France of leaders from the Group of Eight major powers, Prime Minister Naoto Kan said Japan will generate 20 percent of its electricity from natural power sources by the early 2020s.

To achieve this target, the power industry should be reformed before 2020, government officials said.

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