Power producers, as well as power consumers in Japan, are urged to take precautionary measures to tackle power shortages in July in areas such as Tohoku, Tokyo, and Chubu. There, the reserve power is expected to barely cover the minimum of three per cent required to secure a stable power supply in case of severe heat. The power shortages are especially noticeable in Tokyo (stay tuned for more updates on this.)
One reason for the possible power shortages is the change in consumer lifestyles due to the prolonged impact of the pandemic. It is thought that this has contributed to an unexpected increase in power demand. This trend has been significant in major areas of Japan since the summer of 2020.
Furthermore, the current political climate revolving around Russia and Ukraine has been a driving force behind the soaring prices of fuels such as LNG increasing the risk of procurement of a sufficient amount of fuel to ensure a stable power supply.
The potential impact of the expected power shortages this summer is critical as it will have a significant effect not only on the power prices creating increased volatility in the market but also on the power market structure leading to changes in the existing energy policies and regulations as outlined below.
In order to secure a stable power supply this summer, some measures have been put in place by the “Power Supply Demand Committee” in their 7 June meeting.
In addition to the measures above, several potential structural amendments have been discussed: