Snowstorm in the northeast of Japan boosts demand for heating

On Sunday, the spot power price surged in Japan due to increased demand for heating. More and more energy is required as the northeast part of the country is hit by heavy snow.

According to information provided by the Japan Electric Power Exchange, the average price for next-day delivery on Sunday raised by 40% to the level of 34.63 yen per kilowatt-hour in comparison with the previous day. This became a three-month-high. On Monday, the price went down to the level of 32.07 yen, which is still 34% higher than a week ago.

As stated by the Japan Meteorological Agency, snow is unlikely to stop in northern prefectures of Hokkaido, Aomori, and Akita this week. Tokyo's temperatures might fall to 1 degree Celsius, according to the forecast. At the same time, cloudy and rainy weather is expected in widespread parts of the country. Thus, the pressure in the spot power market will remain, as energy demand is still strong while solar output is low because of cloudy weather.