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With less than a month to go until the opening of the Tokyo Olympics, attention is turning to available electricity supply and how much consumers will pay for power during the hottest months of the year.

But while an earlier estimate by the government prompted warnings of tight demand, an industry association that includes utilities and retailers offered a revised estimate that showed a less dire situation, particularly in July.

“We hope that we will be able to ensure a stable supply of electricity without causing any concern, especially due to unplanned power outages and various problems,” Kazuhiro Ikebe, Chairman of the Federation of Electric Power Companies of Japan, said on June 18.

Under the country’s electricity laws, utilities must maintain a minimum reserve ratio of 3% of maximum demand as a safety precaution against sudden shortages. If the reserve ratio falls below 3%, there is risk of rolling blackouts due to the inability to supply power when maximum demand is reached. Utilities generally secure a reserve ratio of 7% to 8% or more to guard against a decrease in supply capacity due to power plant troubles and increases in demand caused by high summertime temperatures.

At the end of May, eight of Japan’s 10 major utilities predicted their reserve ratios would be 3.7% in July and 3.8% in August, when many people are expected to watch the Tokyo Olympics and the Koshien high school baseball tournament from their air-conditioned homes. Kyushu Electric Power Co. also predicted a reserve ratio of 3.7% for July but it forecast that figure to rise to 6.8% in August.

The reasons for the low forecasts, the Ministry of Economy, Trade and Industry (METI) said in late May, was because of a decrease in supply capacity caused by the suspension or closure of 10 older thermal power plants, including four operated by Tokyo Electric Power Company Holdings Inc. (Tepco), two each operated by Kansai Electric Power Co. (Kepco) and Tohoku Electric Power Co., and one each belonging to Chubu Electric Power Co. and Kyushu Electric. The government predicted that summer electricity demand would be at its most severe since 2017.

Triathletes suffer from the summer heat at an Olympic test event at Odaiba Marine Park in Tokyo in August 2019. | KYODO
Triathletes suffer from the summer heat at an Olympic test event at Odaiba Marine Park in Tokyo in August 2019. | KYODO

On June 18, however, a more optimistic viewpoint came from the The Organization for Cross-Regional Coordination of Transmission Operators, a group of electricity transmission and retail firms. With Kepco’s Mihama No. 3 reactor already restarted, the Oi No. 3 nuclear power plant expected to restart by next month and two thermal reactors in the Tohoku and Shikoku areas expected to be back online soon, the group said, there should be more power available on Honshu, Shikoku and Kyushu than METI predicted last month. However, some areas like Tokyo and Tohoku would still face strains in August.

The organization estimates that from Tohoku to Kyushu, the reserve rate will be 5% to 6.2% in July. For August, the rate for the Tohoku and Tokyo areas is expected to fall to 3.9%, but for the central and western parts of Japan, the expected ratio is 6.1% to 6.5%.

Only Hokkaido and Okinawa were expected to have more than enough electricity to meet demand. According to the two estimates, Hokkaido Electric Power Co.’s reserve ratio is expected to be 16.2% in July and 23.9% in August, while Okinawa Electric Power Co.’s ratio is predicted to be 29.9% in July and 31.6% in August.

Regardless of the difference between the utilities and the retailers over how close to the required reserve ratio electricity usage will be in July and August, consumers could be looking at higher energy bills. Tepco’s simulated model for household electricity costs shows an average monthly bill of ¥6,317 in January. That is predicted to rise by more than ¥600, to ¥6,973, by next month. The increase has been attributed to the price of crude oil, which was predicted to continue to rise into August.

“Because it will be difficult to continue lifestyles as usual in terms of things like air-conditioner usage, please try to use electricity efficiently by turning off the lights in unused rooms,” Chief Cabinet Secretary Katsunobu Kato said late last month.

The Mihama nuclear power plant's No. 3 unit in Mihama, Fukui Prefecture, on Wednesday. | KYODO
The Mihama nuclear power plant’s No. 3 unit in Mihama, Fukui Prefecture, on Wednesday. | KYODO

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