Economy Ministry Panel Examines Steps to Deal with Tight Electricity Supply

The Yomiuri Shimbun

10:00 JST, January 25, 2021

The Economy, Trade and Industry Ministry began Tuesday examinations of necessary tasks to resolve the nationwide problem of tight supply-demand conditions for electricity. Its expert panel is discussing the issue.

The discussion focuses on how to utilize renewable energy resources such as solar power — whose output is greatly affected by weather — and also on how to cope with shortages of fuel for thermal electric power plants.

The expert panel is the ministry’s Electricity and Gas Basic Policy Subcommittee, chaired by Hirotaka Yamauchi, a specially appointed professor at Hitotsubashi University.

Possibly in spring this year, the subcommittee aims to present results of its examination of the issues and a draft of measures to resolve them.

The subcommittee identified three main factors that have caused the tight electricity supply-demand situation.

First, output from solar power generation systems has significantly decreased.

Second, inventories of liquefied natural gas (LNG) to fuel thermal power plants are low.

Third, demand for electricity has steadily remained high.

According to the ministry’s statistics, demand for electricity as of Jan. 8 surpassed predicted maximum levels calculated in autumn in seven of 10 service areas across the nation. The 10 areas correspond to places served by major electric power companies.

In five service areas, such as the Kansai and Hokuriku regions, the marginal supply capability fell to below 3%, the minimum level essential for a stable power supply.

Regarding electric power output, the subcommittee’s analysis found that output from solar power generation declined in the Chugoku, Shikoku and Kyushu regions due to bad weather in the year-end and New Year period. The decrease accounted for about 10% of total output from all sources in the regions.

Thermal power plants, which usually cover such supply shortfalls, faced shortages of LNG fuel inventories. The subcommittee concluded that thermal power plants were unable to sufficiently operate.

Based on the analysis, members of the subcommittee shared the opinion that the method of predicting winter demand should be reviewed, eyeing how demand for electricity will steadily rise.

Also, one subcommittee member said, “If renewable energy resources are used more widely, [the risks of electricity shortages] will be much more serious. Sources of electric power should be diversified, including utilization of nuclear power plants.”

Other members also expressed concern about further increasing reliance on renewable energy sources.

The government will consider improving the circumstances in which nuclear and thermal power plants can be maintained and utilized in the future.

To prevent electric power plants from the risk of inadequate LNG inventories, one task will be to build monitoring systems to determine the necessary amount of fuel in advance.

Members of the subcommittee also paid attention to the fact that wholesale trading prices of electric power between electric power generating companies and electricity retail companies surged to more than 20 times higher than usual due to the tight supply-demand conditions.

University of Tokyo Prof. Toshihiro Matsumura, one of the subcommittee members, remarked, “The role of monitoring [the trading situation] has become more important.”