Japan's spot power prices retreat 13% for weekend despite snowstorms

Spot prices traded on the Japan Electric Power Exchange retreated 13.3% day over day for Jan. 11, with the 24-hour day-ahead price dropping to Yen 14.12/kWh from the highest level so far this winter on Jan. 10.

The decline in JEPX prices from Yen 16.29/kWh for Jan. 10, the highest level since Yen 16.42/kWh for Nov. 20, comes as Japan is expected to see weaker power demand over the weekend, despite ongoing snowstorms affecting the northern to southern parts of the country.

The Ministry of Land, Infrastructure, Transport and Tourism issued an "emergency" alert Jan. 8 for a heavy snow forecast along Honshu's Sea of Japan coast toward Jan. 10.

The latest weather forecast from the Japan Meteorological Agency indicates that Honshu regions, from Aomori in the north to western Shimane in the west, are projected to experience snowfall until Jan. 11 -- weather conditions likely to impact solar power output.

At 5:00-5:30 pm local time (0800-0830 GMT), the Chugoku area's reserve power supply capacity ratio stands at 6.46%, with the ratio expected to recover to 8.36% by 6:00 pm, according to the latest outlook from the Organization for Cross-Regional Coordination of Transmission Operators as of 5:00 pm.

The Kansai area's reserve power supply capacity ratio, meanwhile, has recovered to 10.50% at 5:00-5:30 pm, from 6.80% at 11:00-11:30 am, according to the OCCTO. The reasons behind the improvement in the reserve power supply capacity ratio were not immediately clear.

Japan's winter power supply and demand balance typically tightens in the early evening or morning during the peak winter months, as electricity consumption rises for heating after solar power generation ceases at sunset, with snowfall further impacting solar power output.

The country's LNG stocks held by major power utilities declined 16.5% week over week to a 12-week low of 1.87 million mt on Jan. 5, the Ministry of Economy, Trade and Industry said Jan. 8.

Despite an uptick in power demand from snowstorms hitting many parts of the country, Japanese utilities have yet to seek additional spot cargoes.

The current winter stormy weather, however, coincides with high waves around the Japanese archipelago, with the JMA issuing advisories from the north to southern Japan.

OCCTO monitoring

The latest OCCTO survey, released Jan. 10, showed that Japan's fuel inventory for power generation is expected to reach the minimum level March 13, based on stock monitoring conducted by the OCCTO for the Jan. 25-March 13 period.

Data monitored by the OCCTO -- comprising all power companies in Japan -- showed that the country's fuel stocks are set to reach 10.738 TWh, equivalent to a four-day average of electricity consumption, should power demand remain at the 30-year average.

Japan's fuel inventory for power generation is expected to reach the minimum level Feb. 26, based on stock monitoring conducted by the OCCTO for the Jan. 11-Feb. 27 period.

Data monitored by the OCCTO showed that the country's fuel stocks are set to reach 14.601 TWh, equivalent to a six-day average of electricity consumption, should power demand hover at the 30-year average.