Tokyo Faces Tight Power Supply on Scorching Heat, Plant Outages

(Bloomberg) — Hotter-than-normal summer temperatures are stretching the Tokyo grid, prompting the metropolitan region’s utility to urge consumers to use electricity efficiently.

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The day-ahead spot price for the Tokyo region spiked to 21.9 yen per kilowatt-hour on Monday, the highest level since Feb. 2023. The city’s mean temperature could reach 30C on Monday, compared with the 30-year normal of 24C, according to data compiled by Bloomberg.

A hot start to summer across the northern hemisphere threatens to boost power demand and tighten global supplies of fuel like gas and coal. The LNG market is already finely balanced, and prolonged heat in Japan threatens to push prices higher in Asia and Europe.

Unplanned maintenance also curbed available power generation across Japan. A 413-megawatt unit was shut at a gas-fired Kawasaki power plant on Monday, while a 300-megawatt unit at the gas-fired Kashima Kyodo facility will be closed until Tuesday, according to data compiled by the Japan Electric Power Exchange.

Tokyo Electric Power Co. warned power supply was tight, while Japan’s grid coordinator ordered a neighboring utility to share 200 megawatts of capacity.

The Tokyo area’s power reserves could fall as low as 2% at 5 p.m. on Monday, according to the Organization for Cross-regional Coordination of Transmission Operators. If a utility’s reserve rate falls below 3%, it is usually forced to buy power from other regions to avoid curtailment.

The day-ahead power price for Tokyo rose 13% on Monday, while the nationwide rate hit 18.5 yen, the highest since Sept. 2023.

The so-called imbalance price, which is a charge that occurs when the amount of power supply doesn’t match the planned demand submitted by retailers, rose to nearly 200 yen per kilowatt-hour in Tokyo at 9 a.m.

Pleas for power conservation have become common during summer and winter months when demand peaks, but Japanese authorities have said there is enough capacity for this season.

–With assistance from Stephen Stapczynski.

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