Jan 20, 2021 (Reuters) - Japan’s wholesale electricity prices hit the maximum possible for a third day after the government set upper limits on moves last week amid the worst power crunch since the Fukushima disaster nearly a decade ago.
Electricity for delivery on Wednesday reached a high of 200 yen ($1.92) per kilowatt hour (kWh) for peak hours as cold temperatures persisted through many parts of Japan, driving demand for heating.
Japan’s old regional utilities, which now compete with scores of new entrants, have struggled to keep generation units going because of a shortage of fuel and with many reactors still shut after the 2011 nuclear catastrophe.
The industry ministry on Friday announced changes to trading arrangements, setting a cap on prices at 200 yen/kWh after they hit successive records up to 250.10 yen as power providers sought supplies on the Japan Electric Power Exchange.
The recent market squeeze was “beyond our expectations”, said Yuji Kawagoe, President of Ennet, one of Japan’s biggest independent power providers, speaking on Tuesday as an invited observer at an industry ministry panel on electricity and gas.
