Japan forecasts normal to colder winter weather
Japan is expected to experience normal or colder than usual weather for the coming winter. This will keep the country's power sector exposed to the risk of electricity shortages during the peak heating demand season, despite its efforts to increase power output capacity.
The Japan Meteorological Agency on 20 September forecast temperatures during December-February to be in line with the 30-year average at a 30-40pc probability and colder at a 40pc possibility across the country. The long-term average temperatures during December-February in major cities such as Tokyo, Osaka and Nagoya are 6.4°C, 7.2°C and 5.8°C respectively. JMA also predicted the likelihood of La Nina weather conditions continuing throughout the winter at 70pc. This indicates Japan may face a colder winter than usual.
But the forecast also implies winter could be similar or warmer than the previous year, given temperatures in December 2021-February 2022 were lower than usual. Temperatures in Tokyo, Osaka and Nagoya averaged 6°C, 6.6°C and 5.3°C respectively during the period.
The capital Tokyo and Tohoku areas are now anticipated to have power reserve levels of 3.4pc for January and 4.1pc for February, in the case of the coldest weather in the past decade occurring. This was revised up from the previous forecast of 1.5pc and 1.6pc respectively because of an earlier than expected return of the earthquake-hit Shinchi coal-fired power plant and the trouble-hit Takahama No.3 nuclear reactor. But the surplus is just above the minimum 3pc level needed for any emergencies and well below the ideal 8pc.
The country's power producers are likely to maximise the use of operational thermal power units, as there could be some scope for increased heating demand with colder weather forecast. Thermal output could rise compared with a year earlier, especially from December-January when the country's nuclear capacity is lower, assuming power demand in line with a year earlier.
But gas-fired power plants are unlikely to be switched on first to offset the shortfall in nuclear generation, as high spot LNG prices make gas uncompetitive with coal and oil in the country's generation mix. Power firms will have incentives to maximise oil-linked LNG deliveries under term contracts and boost output from base-load coal-fired units. They will also likely increase oil-fired generation before turning to the spot LNG market for additional supplies, given spot LNG prices are holding firmly above oil parity.
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