Uncertainty over Japan's nuclear policy and power market liberalization continues as 2015 opens, complicating investment decisions, particularly for developers of renewable energy. After a decisive victory in December elections, Prime Minister Shinzo Abe is expected to fulfill his election pledge of pushing through power reforms designed to make the sector more competitive after the March 2011 Fukushima disaster led to the progressive closure of the country's nuclear fleet, inflating fuel import costs and electricity prices. Abe also favors nuclear restarts and greater use of renewables, but the government has still to spell out the target fuel mix. The power reforms have met stiff resistance from the country's 10 power utilities, which are worried that their regional monopolies will be eroded by new players such as gas utilities. Heavily vested in nuclear and fossil fuels, they are also concerned about competition from renewables. The plan is for liberalization to occur in three stages. An independent cross-regional grid co-ordinator will be created this year to balance supply and demand; the residential sector will be opened to full competition next year; and utilities will have to split power generation and distribution into separate businesses from 2018-20, with independent operation of transmission infrastructure crucial to unlocking the full potential for renewables use. The legal framework is already in place, but the devil will be in the details. "The contents of the law are more important than the law itself," Mika Ohbayashi, director of advocate group Japan Renewable Energy Foundation (JREF), tells WGI.
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