Electricity prices on the Japanese market recorded a spectacular increase of 19.6% for the day of November 19, reaching 15.31 yen per kilowatt hour (kWh) compared to 12.80 yen/kWh the day before. The increase reflects increased demand, driven by a drop in temperatures, particularly marked in Japan's eastern and northern regions.
The electricity market in Japan, organized around the Japan Electric Power Exchange (JEPX), saw contracts for several geographic areas, including Tohoku, Tokyo, Chubu, Hokuriku and Kansai, experience notable increases. These prices have not reached such a level since October 18, when they peaked at 15.98 yen/kWh.
Energy demand influenced by weather conditions
According to the Japan Meteorological Agency (JMA), maximum temperatures in the Tokyo area fell to 16°C on November 18, slightly below the 30-year average for this period. Forecasts indicate a continuation of this decline, with temperatures forecast at 13°C on November 19, 12°C on November 20 and 15°C on November 21. This drop is attributed to winter atmospheric pressure, which intensifies the demand for heating and, by extension, electricity.
Increased heating needs have also boosted the use of thermal fuels such as liquefied natural gas (LNG) and town gas. However, despite this increase in consumption, operators report that demand for additional LNG cargoes on the spot market remains stable.
LNG inventory forecasting and management
An energy company representative said most companies had already anticipated a harsh winter and adapted their supply strategies accordingly. “Current stocks appear sufficient to meet expected demand, even if the situation evolves,” he added.
The Ministry of Economy, Trade and Industry recently announced that LNG stocks held by large power companies increased by 4.2% during the week of November 10, reaching 2.21 million tons. This increase marks the second consecutive weekly increase, guaranteeing a certain stability in the face of the seasonal increase in demand.
Limited impact on the LNG spot market
Despite the drop in temperatures, market participants have not reported any urgent need for additional LNG cargoes. This reflects proactive supply management by Japan's major energy companies. However, a continuation of severe weather conditions could test the limits of available reserves.
Japan's peak electricity demand, often seen in winter, highlights the country's continued reliance on fossil fuels for energy production, despite initiatives to diversify energy sources and build resilience. network.
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