عوامل تعیین کننده تعدادی از مناقصه های تدارکات رقابتی قراردادهای تامین برق در بخش دولتی ژاپن

Since the electricity retail market in Japan was partially opened to competition in 2000, many government entities have sought to solicit competing bids for the electricity supply to their office buildings or facilities, encouraging competition between the incumbents and new entrants. However, in many cases, only the incumbent utility bids for the contract and the competitive effects are limited. This paper presents a statistical analysis of bidders' participation in competitive procurement. We employ several count data regression models to explain the number of bidders other than the local electric utility. Our results suggest that the number of bidders would decrease in response to an increase in the load factor, perhaps because the new entrants are less competitive in serving customers with high load factors as they do not operate low-cost base-load power plants such as nuclear power plants; It would increase along with the voltage level and contract demand. The results also indicate that new entrants are more likely to participate in the bidding process in large city areas.

The Japanese electricity industry has been dominated by 10 privately-owned, vertically-integrated electric utilities. They had been regulated as regional monopolies in the retail electricity market until the market was partially opened to competition in March 2000. It was the so-called “partial liberalization” scheme that allowed large-scale customers (connected to an extra-high voltage system of not less than 20 kV and with a maximum contract demand of 2000 kW or more) to choose their suppliers, as well as third-party access to the utilities' transmission network, subject to negotiated tariffs. Under this scheme, those who wished to supply electricity to large-scale customers were able to do so as power producers and suppliers (PPSs) by using transmission (wheeling) services provided by the electric utilities. Initially, the eligibility of retail access was restricted to large-scale customers; however, the government decided to extend retail access gradually. Since April 2005, all customers with a maximum contract demand of 50 kW or more have been allowed to choose their suppliers.1 The partial liberalization, however, did not immediately result in prosperity among newly-registered PPSs (new entrants), and their share of sales in the newly-opened retail market (i.e., the share based on sales to eligible customers) had been no greater than 1% for the first three years of the partial liberalization. It has increased since 2003; however, it still seems very small (less than 3% of the total demand of eligible customers). The effectiveness of retail competition in electricity supply is an issue of considerable policy interest.2 One of the factors that have encouraged competition in the Japanese electricity retail market is competitive procurement in the public sector. Since partial liberalization started, as eligible customers, many of the central and local government entities (including municipal water companies, universities, and hospitals) have sought competing bids for supplying electricity to their office buildings or facilities in compliance with the WTO Agreement on Government Procurement.3 Such competitive procurement has indeed facilitated competition between the incumbents and new entrants for electricity supply in the public sector, resulting in lower prices when there are multiple bidders. The number of competitive procurement biddings has increased, and PPSs have increasingly relied on such procurement in order to acquire new customers; in fact, they accounted for 25% of the additional sales by PPSs during FY2006. However, in many cases, only the local incumbent utility bids for a contract and the overall effects of competition on bid prices seem to be limited. As shown in Fig. 1, there are no new entrants in about 60% of the cases of procurement held from 2004 to 2006. Capacity constraints make it difficult for new entrants to bid for all the competitive procurements. They also enter into contracts with customers in the private sector. Competitive procurement in the public sector is not the only means by which new entrants can increase their sales; the burden of administrative costs associated with public procurements has induced new entrants to prefer contracting with customers in the private sector instead of those in the public sector. It seems that new entrants participate in the bidding only when they can be competitive. When one or more new entrants participated in the bidding, competing with the incumbent as well as with each other, at least one new entrant won 81% of the contracts. When only one new entrant participated in the bidding, competing with the incumbent, it won 69% of the contracts. These figures suggest that the new entrants are in fact relatively efficient in the procurement they actually decide to participate in, and they may be very conservative in estimating their relative competitiveness as indicated by the rather high ratios of the contracts they win.Although, in general, competitive procurement is desirable for efficiency, this may lead to an undesirable situation for the market given the large share of the incumbents. As they were aware that the new entrants were unlikely to participate in the bidding process, the local utilities do not lower the bid prices as much as they would have in case the new entrants had participated. It is important, therefore, to understand the reason the new entrants do not participate in bidding in many cases and to reform competitive procurement in order to induce competition by multiple bidders. Nevertheless, the determinants of the degree of competition or the number of bidders in these cases of competitive procurement have not been investigated thus far. The purpose of this paper is to empirically identify the determinants of the degree of competition in the competitive procurement of the electricity supply contracts of government entities in Japan. In particular, we estimate the effect of several attributes of the electricity supply contracts on the number of bidders among the new entrants. By revealing the attributes of contracts that are likely to attract many bidders, the results of our analysis would provide useful information with regard to key factors for effective competition in the retail electricity market. We will particularly examine how different technologies for electricity supply between the incumbent and new entrants affect the competition in the market. Our results can also be used by government entities to reconsider their procurement policy in order to facilitate competition in electricity demand in the public sector. This paper is organized as follows: Section 2 discusses our empirical model for analyzing the number of bidders in competitive procurement. Section 3 explains the method of estimation for our model and the data set we use. Section 4 presents the results, and Section 5 concludes our analysis and briefly discusses future issues.

Using the count data regression models, we identified several determinants of the number of bidders in the competitive procurement of electricity supply contracts with government entities in Japan. New entrants are willing to bid for extra high voltage contracts with a large contract demand; however, they refrain from bidding for contracts with high load factors. It may be possible to facilitate competition by increasing the size of contract demand by bundling multiple contracts. On the other hand, multiyear contracts would not necessarily encourage new entrants to participate in the bidding process. We also found some regional differences: the number of bidders is greater in large city areas. As the new entrants become more competitive, the number of bidders would increase in the future. Recently, however, the persistently high oil prices seem to have discouraged new entrants from participating in the bidding process as they still heavily relied on fossil fuel to generate electricity. Moreover, stricter measures for preventing global warming, which are to be introduced with regard to competitive procurement, might further weaken their competitiveness, as the incumbent utilities have facilities for nuclear power and hydropower generation. It is still unclear how such measures are implemented in the procurement procedures; however, future research needs to take these factors into account. Finally, in order to analyze the overall welfare effect, we need to investigate the strategic behavior of the incumbents, since it could cause distortion of prices in the market. This is also an important subject for future research.