In 2008, Japan consumed an average of 8507 kWh/person of electricity. That was 115% of the EU15 average of 7409 kWh/person and 95% of the OECD average of 8991 kWh/person.
Compared with other nations, electricity in Japan is relatively expensive.
Since the Fukushima Daiichi nuclear disaster, and the subsequent large scale shutdown on the nuclear power industry, Japan’s ten regional electricity operators have been making very large financial losses, larger than US$ 15 billion in both 2012 and 2013.
Since then steps have been made to liberalize the electricity supply market. In April 2016 domestic and small business mains voltage customers became able to select from over 250 supplier companies competitively selling electricity, though many of these only sell locally mainly in large cities. Also wholesale electricity trading on the Japan Electric Power Exchange (JEPX), which previously only traded 1.5% of power generation, was encouraged. By June 2016 more than 1 million consumers had changed supplier. However total costs of liberalization to that point were around ¥80 billion, so it is unclear if consumers had benefited financially.
In 2020 transmission and distribution infrastructure access will be made more open, which will help competitive suppliers cut costs.
Electricity transmission in Japan is unusual because the country is divided for historical reasons into two regions each running at a different mains frequency.
Eastern Japan (including Tokyo, Kawasaki, Sapporo, Yokohama, and Sendai) runs at 50 Hz; Western Japan (including Okinawa, Osaka, Kyoto, Kobe, Nagoya, Hiroshima) runs at 60 Hz. This originates from the first purchases of generators from AEG for Tokyo in 1895 and from General Electric for Osaka in 1896.
This frequency difference partitions Japan's national grid, so that power can only be moved between the two parts of the grid using frequency converters, or HVDC transmission lines. The boundary between the two regions contains four back-to-back HVDC substations which convert the frequency; these are Shin Shinano, Sakuma Dam, Minami-Fukumitsu, and the Higashi-Shimizu Frequency Converter. The total transmission capacity between the two grids is 1.2 GW.
The limitations of these links has been a major problem in providing power to the areas of Japan affected by the Fukushima Daiichi nuclear disaster.
According to the International Energy Agency the Japan gross production of electricity was 1,041 TWh in 2009, making it the world's third largest producer of electricity with 5.2% of the world's electricity. After Fukushima, Japan imported and additional 10 million short tons of coal and liquefied natural gas imports rose 24% between 2010 and 2012 mostly consumed in the power sector (64%).
Nuclear energy was a national strategic priority in Japan, but there has been concern about the ability of Japan's nuclear plants to withstand seismic activity.
Following an earthquake, tsunami and the failure of cooling systems at the Fukushima I nuclear power plant on March 11, 2011, a nuclear emergency was declared. This was the first time a nuclear emergency had been declared in Japan, and 140,000 residents within 20 km of the plant were evacuated. The total amount of radioactive material released during the incident is unclear, as the crisis is ongoing.
On 6 May 2011, Prime Minister Naoto Kan ordered the Hamaoka Nuclear Power Plant be shut down as an earthquake of magnitude 8.0 or higher was likely to hit the area within the next 30 years. Kan wanted to avoid a possible repeat of the Fukushima disaster, and, on 9 May 2011, Chubu Electric decided to comply with the government's request. Kan later called for a new energy policy with less reliance on nuclear power.
By October 2011, only 11 nuclear power plants were operating in Japan. There were electricity shortages following the power off of most nuclear plants, but Japan passed the summer of 2011 without the extensive blackouts that had been predicted previously. All 50 nuclear plants were put on hold by early 2012, and the Japanese government warned that voluntary power-saving may not be enough to prevent a massive electricity shortage the next summer. An energy white paper, approved by the Japanese Cabinet in October 2011, says "public confidence in safety of nuclear power was greatly damaged" by the Fukushima disaster, and it calls for a reduction in the nation’s reliance on nuclear power.
Of Japan's 50 nuclear reactors all will go offline on 15 September 2013, leaving Japan without atomic energy for only the second time in almost 50 years. In mid 2011 energy conservation policies were applied leading to a 12% reduction in electrical use. Carbon dioxide emissions from the electricity industry rose in 2012, reaching levels 39% more than when the reactors were in operation.
Hydroelectricity is Japan's main renewable energy source, with an installed capacity of about 27 GW, or 16% of the total generation capacity, of which about half is pumped-storage. The production was 73 TWh in 2010. As of September 2011, Japan had 1,198 small hydropower plants with a total capacity of 3,225 MW. The smaller plants accounted for 6.6 percent of Japan's total hydropower capacity. The remaining capacity was filled by large and medium hydropower stations, typically sited at large dams.
The Japanese government announced in May 2011 a goal of producing 20% of the nation's electricity from renewable sources, including solar, wind, and biomass, by the early 2020s.
Citing the Fukushima nuclear disaster, environmental activists at a United Nations conference urged bolder steps to tap renewable energy so the world doesn't have to choose between the dangers of nuclear power and the ravages of climate change.
Benjamin K. Sovacool has said that, with the benefit of hindsight, the Fukushima disaster was entirely avoidable in that Japan could have chosen to exploit the country's extensive renewable energy base. Japan has a total of "324 GW of achievable potential in the form of onshore and offshore wind turbines (222 GW), geothermal power plants (70 GW), additional hydroelectric capacity (26.5 GW), solar energy (4.8 GW) and agricultural residue (1.1 GW)."
One result of the Fukushima Daiichi nuclear disaster could be renewed public support for the commercialization of renewable energy technologies. In August 2011, the Japanese Government passed a bill to subsidize electricity from renewable energy sources. The legislation will become effective on 1 July 2012, and require utilities to buy electricity generated by renewable sources including solar power, wind power and geothermal energy at above-market rates.
As of September 2011, Japan plans to build a pilot floating wind farm, with six 2-megawatt turbines, off the Fukushima coast. After the evaluation phase is complete in 2016, "Japan plans to build as many as 80 floating wind turbines off Fukushima by 2020."
Japan relies mostly on pumped storage hydroelectricity to balance demand and supply. As of 2014, Japan has the largest pumped storage capacity in the world, with over 27 GW.