Japan Next-Day Power Price Hits Four-Year High on Fuel Costs

Japan’s nationwide next-day spot power price climbed more than 25% week-over-week to 31.15 yen ($0.19) per kilowatt-hour on Monday, according to Japan Electric Power Exchange data. That was the highest level in almost four years. Prices rose in all major power-consuming regions, with Tokyo up 19% from a week earlier while Kansai and Chubu gained 61% and 19%, respectively.

Fuel supply disruptions tied to the US-Iran war, as reported by Bloomberg, have pushed liquefied natural gas prices higher. The report said that cost pressure has prompted some countries to turn back to coal for energy security.

That renewed coal demand, combined with weaker supply from Indonesia, has also lifted coal prices. Newcastle benchmark futures have climbed steadily since late August, reaching $150.4 a ton last Friday, roughly 30% above the level before the war in Iran began.

Tight fuel markets have coincided with lower Japanese power generation. Available capacity for Monday was about 12% below the same day a month earlier, according to JEPX data, as some facilities entered scheduled maintenance ahead of winter.