Practices

Power and Gas

We support clients entering or operating in the electricity and gas markets by providing legal advice on tariff design, preparation and revision of standard terms and contracts, practical responses to the latest regulatory reforms, and engagement with supervisory authorities.  Our goal is to ensure stable and sustainable business operations. 

Entry into and Exit from the Electricity and Gas Markets

Companies seeking to operate as electricity or gas suppliers in Japan must meet specific registration or notification requirements.  For example, a company wishing to operate as a retail electricity provider must obtain registration from the Minister of Economy, Trade and Industry pursuant to the Electricity Business Act.  The registration process requires not only a formal application but also supporting documents such as a business plan and an explanation of the operational framework for retail electricity supply.  In addition, membership in the Organization for Cross-regional Coordination of Transmission Operators (OCCTO) is mandatory.

 

Our firm provides practical support throughout this process, including verifying compliance with registration requirements, preparing necessary documents, negotiating with regulators, and assisting with post-registration compliance frameworks, thereby facilitating smooth market entry.

 

Conversely, in the case of market exit, retail electricity providers must carefully assess whether and how existing supply contracts can be terminated.  The Guidelines on Electricity Retail Business set forth the obligations of retail providers when terminating supply agreements, including required procedures to protect consumers.  Our firm advises on the legal framework for contract termination and regulatory guidance, while also addressing business strategy and customer relations considerations, thereby supporting clients in executing practical and strategically sound market withdrawals. 

Responding to Regulatory Reforms

The Electricity Business Act, the Gas Business Act, and related regulations are frequently amended in line with policy initiatives such as the full liberalization of retail markets and the creation of new wholesale markets.  For example, the capacity contribution system, introduced in FY2024, directly impacts tariff design and cost recovery for retail electricity suppliers.  This new obligation represents a significant burden, particularly for retailers without their own generation assets.

 

Timely and strategic responses to regulatory reforms are not only essential to avoid legal risks but also present opportunities to capture new business and revenue streams.  Our firm provides practical, up-to-date legal services that enable clients to adapt to evolving regulatory frameworks while supporting their long-term business growth. 

Design of Tariff Menus and Pricing Structures

Tariff design in the electricity and gas sectors is not merely a matter of business judgment; it must also comply with the requirements of the Electricity Business Act, the Gas Business Act, and related guidelines.  For example, the Guidelines on Electricity Retail Business and Guidelines on Gas Retail Business prohibit tariff terms that fail to clearly specify pricing methodologies.

 

In the electricity sector in particular, complex tariff structures linked to wholesale market prices are becoming increasingly common.  This makes it essential for providers to pay close attention to the regulatory requirements applicable to such arrangements.  Our firm offers legal advice on tariff design to help clients establish pricing schemes that are transparent for customers while remaining fully compliant with regulatory obligations. 

Preparation of Supply Terms and Customer Disclosure Documents

We also assist with the preparation, review, and revision of retail supply terms and mandatory customer disclosure documents under the Electricity and Gas Business Acts. These include pre-contract disclosures and post-contract confirmation documents, which are strictly regulated as to their content and explanations to end users.  Any deficiencies in such documents may expose providers to corrective action by the Electricity and Gas Market Surveillance Commission.

 

The preparation of supply terms and disclosure documents should not be seen as a mere formality; it plays a critical role in building long-term trust with customers.  Our firm places particular emphasis on producing documents that are both practical and customer-friendly, taking into account recent regulatory trends and the enforcement stance of the supervisory authorities.  Through this approach, we help clients ensure compliance while also strengthening customer confidence, thereby supporting stable and sustainable business operations.

Renewable Energy and Power Generation Projects

We provide comprehensive legal support across the entire life cycle of renewable energy projects, including solar, wind, hydro, and biomass.  Our services cover development planning, financing, the preparation and negotiation of EPC and O&M agreements, and regulatory matters during the operational stage.  We also advise on acquisitions and sale of renewable energy facilities and energy-related companies, as well as compliance with Renewable Energy Special Measures Act, including support for community briefing sessions required under the law.

Project Development and Life-Cycle Support

Renewable energy projects face a wide range of legal challenges, from the initial concept stage to post-commissioning regulatory compliance. During the development stage, critical issues include land acquisition or leasing arrangements, conducting environmental impact assessments, and obtaining multiple permits and approvals.

 

Equally important is the structuring of financing schemes through negotiations with financial institutions and investors, as well as the preparation and negotiation of EPC and O&M agreements to establish a solid foundation for construction and operations.

 

Our firm provides end-to-end legal support throughout this project life cycle.  By streamlining procedures and negotiations, we help clients accelerate time-to-market, while careful structuring of contracts and regulatory compliance ensures long-term profitability and stable project operations.

M&A and Investments

We provide end-to-end support for acquisitions and sale of renewable energy facilities and energy-related companies, covering all stages from structuring transaction schemes, conducting legal due diligence, and preparing, reviewing, and negotiating share transfer agreements and business transfer agreements through to closing.

 

M&A and investment transactions in the renewable energy sector require careful consideration of sector-specific regulations.  For example, under the April 2024 amendment to the Renewable Energy Special Measures Act, applicants for FIT/FIP certification or changes to existing certifications are required to conduct local community briefing sessions or implement advance notification measures.  From an M&A perspective, similar obligations apply in cases where there is a change in the operator or its “closely related parties” (which may include members of a partnership, majority shareholders of a corporation, majority equity holders in a silent partnership, or parent companies of such entities), pursuant to Article 8-2 of the Enforcement Regulations of the Renewable Energy Special Measures Act.

 

Drawing on our extensive experience, we advise on these regulatory requirements while also supporting cross-border transactions and complex investment schemes involving domestic and international investors, financial institutions, and energy companies.  Our approach balances risk management with the smooth execution of transactions.

Environmental Regulations

We provide practical legal services on environmental regulations and permitting, reflecting the latest regulatory developments.  Our support extends to key corporate priorities such as carbon neutrality, ESG disclosures, and sustainability strategies, ensuring that clients can address environmental challenges that directly affect their business operations.  We also assist in interactions with ministries and local governments, including the preparation of regulatory reports and negotiations. 

Environmental Compliance and Permitting

We support clients in addressing compliance issues under various environmental laws, including emission standards, waste management regulations, and water and air pollution control measures.  We also assist in securing the environmental permits and approvals required for project execution.

 

For example, in the case of solar power projects, depending on the site, the following approvals may be required:

  • Forest land development approval under the Forest Act
  • Construction permit under the Land Development and Regulation of Certain Embankments Act
  • Authorization under the Erosion Control Act
  • Authorization under the Landslide Prevention Act
  • Authorization under the Act on Prevention of Disasters Caused by Collapse of Steep Slopes

Carbon Neutrality, ESG, and Sustainability

We support clients in developing and implementing carbon neutrality strategies, ESG disclosures, and sustainability policies, addressing both regulatory requirements and practical implementation.  We also advise on the use of non-fossil certificates and carbon credits, providing guidance that directly contributes to enhancing corporate value. 

Engagement with Regulators and Strategic Advice

We assist clients in their communications with regulatory authorities and in meeting reporting obligations, taking a practical and strategic approach that reflects the client’s position.  For example, if it comes to light that required disclosure documents were not delivered to customers or that explanation duties were not properly fulfilled, immediate corrective action is essential.  In such cases, it may also be necessary to consider reporting to the Electricity and Gas Market Surveillance Commission, where the timing and quality of the initial response are critical.

 

Our firm provides strategic advice that goes beyond ensuring compliance with laws and regulations.  We take into account both customer relations and regulatory expectations, helping clients to maintain business continuity while building long-term social credibility and trust. 

Energy Transactions

In addition to electricity and gas operations, we advise on a wide range of energy-related businesses, including renewable energy projects and community-based power initiatives.  Our services cover the entire spectrum of contractual arrangements across the project life cycle, from drafting and reviewing corporate PPAs and EPC agreements to O&M agreements and fuel procurement contracts. 

Structuring Energy Business Schemes

When launching energy businesses such as electricity and gas operations, renewable energy projects, or local/community-based utilities, it is essential to design schemes that account for regulatory frameworks and market conditions.  We support clients in structuring their business models, preparing joint venture and consignment agreements, and designing risk allocation structures, thereby enabling them to commence operations with confidence. 

Contract Drafting and Review

We provide drafting, review, and negotiation support for a wide range of contracts essential to energy businesses, including:

 

  • Corporate PPAs: Long-term agreements (typically 10–25 years) under which corporate or municipal consumers procure renewable electricity directly from generators, securing stable and predictable energy supply.
  • EPC Agreements: Contracts covering the engineering, procurement, and construction of power facilities.  These often include performance guarantees, completion deadlines, and price adjustment clauses in cases of non-compliance.
  • O&M Agreements: Contracts outsourcing the operation and maintenance of power facilities.
  • Fuel Supply Agreements: Long-term contracts for the procurement of fuels such as LNG, coal, and biomass.
  • Joint Venture and Consignment Agreements: Agreements governing collaborative projects among multiple companies or the consignment of specific functions.
  • Intermediary (Agency) Agreements: Agreements under which retail electricity/gas suppliers authorize intermediaries to enter into supply contracts directly with end users, thereby expanding market reach. 

Support for Community-Based Power Initiatives

The establishment and operation of community-based power companies in Japan requires not only registration under the Electricity Business Act and the preparation of supply contracts, but also the development of cooperative frameworks with municipalities and local businesses.  Our firm provides legal support in all stages of these initiatives, including:

 

  • Company Formation and Governance: Drafting articles of incorporation and shareholder agreements for joint ventures between municipalities and local enterprises.
  • Investment Schemes: Structuring capital contributions from municipalities or other investors and advising on applicable regulatory frameworks.
  • Registration and Licensing: Assisting with registration applications under the Electricity Business Act and negotiations with relevant authorities.
  • Supply Contracts and Tariff Design: Drafting and reviewing customer contracts, tariff menus, and retail supply terms.
  • Community Engagement: Preparing for and supporting community briefing sessions, and facilitating discussions with municipalities and local enterprises.
  • Utilization of Schemes and Revenue Models: Advising on the use of FIT/FIP programs, non-fossil certificates, and available subsidies or grant programs to build sustainable business models.

Dispute Resolution in the Energy and Environmental Sectors

Our firm handles a wide range of dispute resolution, from litigation and international arbitration concerning energy transactions to compliance controversies arising under environmental regulations.  Drawing on our hands-on experience in dispute resolution, we leverage practical insights in contract negotiations and transaction structuring, while conversely applying lessons learned from transactional work to our dispute resolution practice.  This dual perspective enables us to provide highly effective legal advice.

Disputes Related to Energy Transactions and Projects

Disputes in the energy and environmental sectors have unique characteristics that distinguish them from ordinary commercial conflicts. Projects typically involve significant capital commitments and multiple stakeholders—including operators, lenders, EPC/O&M contractors, regulators, and local communities—which makes contractual interpretation and performance issues particularly complex.  Disputes often arise from circumstances not clearly anticipated at the time of contracting, where ambiguous provisions require reasonable or supplemental interpretation of the parties’ intent.

 

Key issues include delays in construction, performance guarantees, and disputes over price adjustment clauses, all of which directly impact project schedules and profitability.  The interpretation of force majeure and material adverse change (MAC) clauses is also closely tied to international market fluctuations, requiring a high degree of legal and commercial expertise.

 

Our firm has represented clients in a broad spectrum of such disputes, including conflicts over PPAs in the electricity and gas sectors, as well as disputes arising from EPC and O&M agreements.  Recent examples include representing a domestic company in negotiations over an EPC contract dispute, and acting as counsel for an international client in JCAA arbitration concerning the transfer of ownership interests in a solar power development and operations company.

Environmental Regulation and Compliance-Related Disputes

We also advise on disputes involving compliance with environmental regulations, such as emission standards, waste management, water and air pollution control, and environmental impact assessments.  Our support covers responses to regulatory authorities, challenges to administrative actions, and disputes involving international environmental regulations.  By addressing these increasingly complex and cross-border risks, we provide clients with comprehensive and strategic dispute resolution services.