TOKYO: Electricity prices in Japan rose to their highest in nearly 10 months on Monday (Nov 1), amid elevated global prices for liquefied natural gas (LNG) and coal — the main fuels to supply the country's US$150 billion power market.
While coal and LNG prices have pulled back from records in Asia, they remain high just as Japanese buyers are tempted back into the spot market to keep stocks high for the coming winter season and the resultant higher demand.
On Monday, prices for delivery of electricity early on Tuesday morning reached 55 yen (US$0.48) per kilowatt hour (kWh) the highest since late January.
Traders said higher LNG prices were starting to filter through to the local power market.
Japanese buyers of liquefied natural gas (LNG) are scouting for cargoes to ensure they have adequate supplies of the super-chilled fuel to meet peak heating demand this winter, industry sources told Reuters late last week.
Elevated electricity prices in recent weeks are reviving memories of last winter when prices hit record highs and Japan's grid nearly failed in the worst energy crisis for the country since the Fukushima disaster.
Energy prices across the world have been hitting records or multi-year highs as economies from Europe to Asia recover from the pandemic but face lingering supply chain and other disruptions.