What is the Supply and Demand Balancing Market?

Overview of the supply and demand balancing market

The supply and demand balancing market was established on April 1, 2021 with the objective of ensuring fairness of participation opportunities for a wide range of power sources, transparency and appropriateness of procurement cost, and efficient securing of balancing capacity in connection with the procurement by general electricity transmission and distribution utilities of the balancing capacity needed to control frequency and balance supply and demand within their power supply territories.

Supply and demand balancing market products include tertiary balancing capacity (2) (introduced in fiscal 2021) and tertiary balancing capacity (1) (introduced in fiscal 2022).
Primary balancing capacity, secondary balancing capacity (1), and secondary balancing capacity (2) were introduced in fiscal 2024, and market trading of all product categories started.

*Excluding the supply territory of The Okinawa Electric Power Company, Incorporated.
*For all products, resources such as thermal power, pump hydro, battery storage, self-generation, and demand response are eligible to participate, provided they meet the market requirements.

Product explanations

Tertiary balancing capacity (2) (introduced in April 2021)

Balancing capacity to address forecast errors for renewable energy utilizing FIT special system (1) and FIT special system (3).

The response time is no more than 60 minutes, and the duration is 30 minutes.

Tertiary balancing capacity (1) (introduced in April 2022)

Balancing capacity to address the gap between supply and demand arising from demand forecast errors and renewable energy output forecast errors after gate closure as well as from generation source outages caused by unexpected failures or other causes.

The response time is no more than 15 minutes, and the duration is 30 minutes.

*Updated on March 13, 2026

Secondary balancing capacity (2) (introduced in April 2024)

Balancing capacity to address forecast errors (long-period component) arising after gate closure.

The response time is no more than 5 minutes, and the duration is 30 minutes.

*Updated on March 13, 2026

Secondary balancing capacity (1) (introduced in April 2024)

Balancing capacity to address intra-period fluctuations (short-period component) and generation source outages, etc.

The response time is no more than 5 minutes, and the duration is 30 minutes.

*Updated on March 13, 2026

Primary balancing capacity (introduced in April 2024)

Balancing capacity to address intra-period fluctuations (ultra-short-period component) and generation source outages, etc.

The response time is no more than 10 seconds, and the duration is 5 minutes or more.

* Tertiary balancing capacity (2)：Replacement Reserve-for FIT(RR-FIT)

* Tertiary balancing capacity (1)：Replacement Reserve(RR)

* Secondary balancing capacity (2) ：Frequency Restoration Reserve(FRR)

* Secondary balancing capacity (1)：Synchronized Frequency Restoration Reserve(S-FRR)

* Primary balancing capacity：Frequency Containment Reserve(FCR)