Japan faces energy supply crisis

The import-dependent nation is increasingly reliant on expensive spot LNG cargoes

The global energy supply crunch is exposing Japan’s vulnerability, as surging oil and gas prices have led to spiking electricity rates, prompting calls from the government for residents to conserve power. Japanese electricity prices are already trading at a record high for this time of the year, with day-ahead rates on the Japan Electric Power Exchange up by more than elevenfold from a year ago. The country issued a power warning for the first time in March after supply neared critical levels in Tokyo following an earthquake, leading to a higher burden on power retailers and end-users. At the end of June, the Ministry of Economy, Trade and Industry (Meti) extended an advisory calling for hou