Japan’s power prices climb to highest since 2023 on heat wave

Japanese power prices jumped to the highest in more than three years as hot weather boosted electricity demand and Middle East energy supply disruptions increased fuel costs.

The nationwide next-day power price rose 20% on Monday from the previous week to ￥25.18 ($0.16) a kilowatt-hour, the highest since January 2023, according to data from the Japan Electric Power Exchange.

The Japan Meteorological Agency issued a warning for unusually hot weather across the country from Wednesday. The regions around Tokyo and Kansai are predicted to see highs of 35 degrees Celsius Tuesday and Wednesday, according to the agency, while Nagasaki could see 37 C on Wednesday.

Spot prices for liquefied natural gas (LNG) in Asia are currently more than double levels from before the U.S. and Israel began attacks against Iran in late February. That’s boosted the cost of Japan’s biggest source of power.

Visible shipments of the super-chilled fuel through the Strait of Hormuz have been at a standstill since an Iranian attack on a Qatari-owned tanker in July. Washington’s vow to isolate Tehran economically has further dimmed prospects for a full reopening of the waterway, which carried about a fifth of the world’s LNG before the conflict.