Tokyo—Japan's Minister of Economy, Trade and Industry Hiroshi Kajiyama on May 14 said he issued a directive for the ministry to prepare an "emergency response" for the country's severe summer and winter supply outlook, by the end of May.
"This summer we expect to have a needed [power] supply capacity to ensure stable supply, but we expect to have the most severe outlook [compared to] the last few years," Kajiyama told a press conference."We also expect Tokyo Electric's area [not to have] sufficient supply capacity to ensure stable supply this winter."
In response to the severe power supply outlook, Kajiyama had issued the directive to prepare the emergency response, including requests to power utilities to ensure supply capacity as well as to end-users to cooperate and provide timely information on supply and demand situations.
Among possible measures, METI intends to request Japanese utilities to report their LNG as well as other fuel procurement plans for summer in June to scrutinize them, a METI source told S&P Global Platts.
METI's move was the latest in its efforts to ensure the country's power supply and demand balance, after facing a severe shortage of power supply last winter.
METI aims to formulate power fuel guidelines around August, under plans released April 20, as part of precautionary measures for the next winter after grappling with severe power supply concerns in January.
Robust demandMETI has attributed the tightened supply-power balance from last winter mainly to robust power demand during severe cold spells when local power utilities had to restrict gas-fired power generation due to a fall in LNG stocks.
Japanese power utilities had boosted their LNG procurement from December, peaking in January at 5.54 million mt, from around 5 million mt in the same month over the last two years, according to METI's calculations based on its hearings with major power utilities.
LNG stocks held by power utilities also dropped by around 40% over the course of a month from mid-December. This led to utilities restricting LNG thermal power generation amid difficulties in building LNG inventories in the face of strong demand in East Asia, coupled with shipping constraints in the Panama Canal, according to METI.
The power supply-and-demand balance was exacerbated further by glitches at coal-fired power plants, low hydropower generation output due to droughts, and fluctuating solar power output from bad weather, amid reduced oil-fired power generation capacity and low nuclear power output, according to METI.
