A hot start to summer across the Northern Hemisphere threatens to boost power demand and tighten global supplies of fuel like gas and coal
Hotter-than-normal summer temperatures are stretching the Tokyo grid, prompting the metropolitan region’s utility to urge consumers to use electricity efficiently.
The day-ahead spot price for the Tokyo region spiked to 21.9 yen per kilowatt-hour on Monday (Jul 8), the highest level since Feb 2023. The city’s mean temperature could reach 30 deg C on Monday, compared with the 30-year normal of 24 deg C, according to data compiled by Bloomberg.
A hot start to summer across the Northern Hemisphere threatens to boost power demand and tighten global supplies of fuel like gas and coal. The LNG market is already finely balanced, and prolonged heat in Japan threatens to push prices higher in Asia and Europe.
Unplanned maintenance also curbed available power generation across Japan. A 413-megawatt unit was shut at a gas-fired Kawasaki power plant on Monday, while a 300-megawatt unit at the gas-fired Kashima Kyodo facility will be closed until Tuesday, according to data compiled by the Japan Electric Power Exchange.
Tokyo Electric Power warned power supply was tight, while Japan’s grid coordinator ordered a neighbouring utility to share 200 megawatts of capacity. Jera, a venture between Tepco and Chubu Electric Power, increased power generation at several plants by nearly 400 megawatts to meet demand in the Tokyo area on Monday.
The day-ahead power price for Tokyo rose 13% on Monday, while the nationwide rate hit 18.5 yen, the highest since Sept 2023.
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The so-called imbalance price, which is a charge that occurs when the amount of power supply doesn’t match the planned demand submitted by retailers, rose to nearly 200 yen per kilowatt-hour in Tokyo at 9 am. The price dropped to about 30 yen as of 1.30 pm, indicating that supply tightness was easing from earlier in the day.
Pleas for power conservation have become common during summer and winter months when demand peaks, but Japanese authorities have said there is enough capacity for this season. BLOOMBERG
