Tokyo: Rough Week for Power Supply-Demand

After power producers and power consumers in Japan were urged to prepare for power shortages this summer, this week saw the first alert – issued for the greater Tokyo area – as well as day-ahead electricity prices severely impacted by the high temperatures.


Jun 29, 2022

On 26 June, the Ministry of Economy, Trade, and Industry in Japan (METI) issued a power shortage alert for the greater Tokyo area for the following day as temperatures of 35C were expected. The alert was the first of its kind since the system was revised in May to send out more frequent/urgent messages to the consumers.

METI also urged consumers to reduce the amount of electricity used especially between 15:00 and 18:00. During these hours, the consumption is expected to exceed 50GW and the residual load is expected to reach 41.36GW reflecting the high power demand despite the gradual decrease of solar power generation later in the day, with reserve margins in the Tokyo area below 3.7%. As high temperatures across the country were forecast to continue until 29 June, the alert was further extended to Hokkaido and Tohoku regions with expected reserve margins of 4.1% in the two respective areas.

Volue Insight – Residual Load forecast issued for 24-26 June

Screenshot 1 Residual Load

The alert was issued based on the high temperature predicted on 25 June. The METI guidelines ask for the provision of an advance warning (警報) in case power reserve margins are expected to drop below 3%. According to The Organisation for Cross-Regional Coordination of Transmission (OCCTO) intraday data published on 27 June, the expected reserve margins were to fall to 1.8%.

Volue Insight forecast a severe increase in temperatures in the Tokyo area on 23-24 June

Screenshot 2 Temperature

The high temperatures severely impacted the day-ahead price of electricity reaching the ceiling price of JPY80/kWh between 15:30 and 16:30 during the peak demand hours. Imbalance price reached its ceiling price of JPY200/kWh during the same period, temporarily disrupting the cross-regional supply-demand system to suspend between 15:00 and 15:30.

Screenshot 3 Spot Prices

OCCTO announced a revision of their power demand/supply monitoring system in response to the expected power shortage between the end of June and August in order to provide early warnings and to send out urgent messages regarding the volatility of power supply-demand.

Going forward, the monitoring system will be based not only on the short-term (intraday up to 2 weeks ahead) kW-base procurement of power (to be updated weekly from early July) but also on the long-term (from 2 weeks to 2 months prediction) kWh-base procurement status of fuel for thermal power generation to reflect the volatile market conditions.