Japanese electricity prices jump over 25 percent in a week

Japanese households are paying a quarter more for electricity this week than last, as the country's post-Fukushima dependence on imported fuel collides with a war in the Strait of Hormuz that has turned tanker traffic into a lottery.

The nationwide average power price rose to $0.19 per kilowatt-hour on Monday, according to data from the Japan Electric Power Exchange cited by Bloomberg — an increase of more than 25 percent in a single week. Japan, one of the world's largest LNG importers, has spent the months since the Middle East war began burning more coal and less gas, as Asian LNG prices climbed to a four-year high. The spot price for December delivery into north-east Asia was assessed at $29.30 per million British thermal units at the end of last week, up sharply from $26.50 a week earlier.

Very few LNG cargoes are now managing to exit the Strait of Hormuz at all, and competition with Europe for winter supply is intensifying. Indonesia, the top thermal coal exporter, has reduced shipments, and Newcastle futures — the global coal benchmark — have jumped 30 percent above pre-war levels. Scheduled maintenance at some Japanese power plants ahead of winter has added a further squeeze.

The reactors that could have buffered this shock sit idle by political decision, shut down after Fukushima and never fully restarted. In their place Japan built an energy strategy that runs on seaborne fuel through the one waterway currently mined and burning — and households now absorb the spot price of that arrangement every month.

Japan's gas-fuelled power generation is the most expensive in years, and the country that swapped nuclear plants for imported gas is discovering what the swap costs when the sea lane closes.