Japan Power Price Rises on Expensive Gas and Cloudy Weather

(Bloomberg) -- Japan’s wholesale power rate advanced on rising liquefied natural gas prices and expectations for low solar output due to a forecast for cloudy and potentially snowy weather. 

The country’s next-day spot electricity price climbed to 29.52 yen per kilowatt hours on Monday, according to the Japan Electric Power Exchange, putting it on par with recent Monday morning levels.

There are forecasts for snow in northern Japan, and predictions for overcast skies and possibly rain in the south, which will curb solar output. Rising LNG spot prices caused by a dearth of supply in Europe and production outages in Australia, are also feeding through into Japanese wholesale power prices.

LNG stockpiles held by Japanese power producers fell to 2.16 million tons on Jan. 9 amid the frigid temperatures, according to trade ministry data. Inventories are still above the four-year average, however.

• Baseload Tokyo power futures for Jan. delivery on EEX settled at 23.69 yen/kWh on Friday, down 2.7% from the previous week
  • Feb. contract down 9.8% w/w to 22.10 yen/kWh

Other Japan power market news: 

• Mitsubishi Heavy Plans Reactor That Adjusts Power Flow: Nikkei
• Heating Fuels Demand to Rise in Japan, U.S. East Coast, FGE Says

©2022 Bloomberg L.P.