Eskom resorts to land expropriation

Japan Electricity Crunch exposes vulnerabilities in a liberalised power market as LNG shortages, JEPX price spikes, snow-hit solar, and weak hedging strain energy security and retail providers amid cold snap demand and limited reserve capacity.

Key Points

A winter demand shock and LNG shortfalls sent JEPX to records, exposing gaps in hedging, data, and energy security.

✅ JEPX wholesale prices spiked to an all-time high

✅ LNG inventories and procurement proved insufficient

✅ Snow disabled solar; new entrants lacked hedging

Japan's worst electricity crunch since the aftermath of the Fukushima crisis has exposed vulnerabilities in the country's recently liberalised power market, although some of the problems appear self-inflicted.

Power prices in Japan hit record highs last month, mirroring UK peak power prices during tight conditions, as a cold snap across northeast Asia prompted a scramble for supplies of liquefied natural gas (LNG), a major fuel for the country's power plants. Power companies urged customers to ration electricity to prevent blackouts, although no outages occurred.

The crisis highlighted how many providers were unprepared for such high demand. Experts say LNG stocks were not topped up ahead of winter and snow disabled solar power farms, while China's power woes strained solar supply chains.

The hundreds of small power companies that sprang up after the market was opened in 2016 have struggled the most, saying the government does not disclose the market data they need to operate. The companies do not have their own generators, instead buying electricity on the wholesale market.

Prices on the Japan Electric Power Exchange (JEPX) hit a record high of 251 yen ($2.39) per kilowatt hour in January, equating to $2,390 per megawatt hour of electricity, above record European price surges seen recently and the highest on record anywhere in the world. One megawatt hour is roughly what an average home in the U.S. would consume over 35 days.

But the vast majority of the new, smaller companies are locked into low, fixed rates they set to lure customers from bigger players, crushing them financially during a price spike like the one in January.

More than 50 small power providers wrote on Jan. 18 to Japan's industry minister, Hiroshi Kajiyama, who oversees the power sector, asking for more accessible data on supply and demand, reserve capacity and fuel inventories.

"By organising and disclosing this information, retail electricity providers will be able to bid at more appropriate prices," said the companies, led by Looop Co.

They also called on Kajiyama to require transmission and distribution companies to pass on some of the unexpected profits from price spikes to smaller operators.

The industry ministry said it had started releasing more timely market data, and is reviewing the cause of the crunch and considering changes, echoing calls by Fatih Birol to keep electricity options open amid uncertainty.

Japan reworked its power markets after the Fukushima nuclear disaster in 2011, liberalizing the sector in 2016 while pushing for more renewables.

But Japan is still heavily reliant on LNG and coal, and only four of 33 nuclear reactors are operating. The power crisis has led to growing calls to restart more reactors.

Kazuno Power, a small retail provider controlled by a municipality of the same name in northern Japan, where abundant renewable energy is locally produced, buys electricity from hydropower stations and JEPX.

During the crunch, the company had to pay nearly 10 times the usual price, Kazuno Power president Takao Takeda said in an interview. Like most other new providers, it could not pass on the costs, lost money, and folded. The local utility has taken over its customers.

"There is a contradiction in the current system," Takeda said. "We are encouraged to locally produce power for local consumption as well as use more renewable energy, but prices for these power supplies are linked to wholesale prices, which depend on the overall power supply."

The big utilities, which receive most of their LNG on long-term contracts, blamed the power shortfall on a tight spot market and glitches at generation units.

"We were not able to buy as much supply as we wanted from the spot market because of higher demand from South Korea and China, where power cuts have tightened supply," Kazuhiro Ikebe, the head of the country's electricity federation, said recently.

Ikebe is also president of Kyushu Electric Power, which supplies the southern island of Kyushu.

Utilities took extreme measures - from burning polluting fuel oil in coal plants to scavenging the dregs from empty LNG tankers - to keep the grid from breaking down.

"There is too much dependence on JEPX for procurement," said Bob Takai, the local head of European Energy Exchange, where electricity pricing reforms are being discussed, and which started offering Japan power futures last year. He added that new entrants were not hedging against sharp price moves.

Three people, who requested anonymity because of the sensitivity of the matter, were more blunt. One called the utilities arrogant in assuming they could find LNG cargoes in a pinch. Prices were already rising as China snapped up supplies, the sources noted.

"You had volatility caused by people saying 'Oh, well, demand is going to be weak because of coronavirus impacts' and then saying 'we can rely more on solar than in the past,' but solar got snowed out," said a senior executive from one generator. "We have a problem of who is charge of energy security in Japan."

Inventories of LNG, generally about two weeks worth of supplies, were also not topped up enough to prepare for winter, a market analyst said.

The fallout from the crunch has become more apparent in recent days, with new power companies like Rakuten Inc suspending new sales and Tokyo Gas, along with traditional electricity utilities, issuing profit downgrades or withdrawing their forecasts.

Although prices have fallen sharply as temperatures warmed up slightly and more generation units have come back online, the power generator executive said, "we are not out of the woods yet."
 

Related News

• Electricity Forum News

• Power Generation News

Enel Green Power España Aragon wind farms advance Spain's renewable energy transition, with 90MW under construction in Teruel, Endesa investment of €88 million, 25-50MW turbines, and 2017 auction-backed capacity enhancing grid integration and clean power.

Key Points

They are three Teruel wind projects totaling 90MW, part of Endesa's 2017-awarded plan expanding Spain's clean energy.

✅ 90MW across Sierra Costera I, Allueva, and Sierra Pelarda

✅ €88m invested; 14+7+4 turbines; Endesa-led build in Teruel

✅ Part of 2017 tender: 540MW wind, 339MW solar, nationwide

Enel Green Power Espana, part of Enel's wind projects worldwide, has started constructing three wind farms in Aragon, north-east Spain, which are due online by the end of the year.

The projects, all situated in the Teruel province, are worth a total investment of €88 million.

The biggest of the facilities, Sierra Costera I, will have a 50MW and will feature 14 turbines.

The wind farm is spread across the municipalities of Mezquita de Jarque, Fuentes Calientes, Canada Vellida and Rillo.

The Allueva wind facility will feature seven turbines and will exceed 25MW.

Sierra Pelarda, in Fonfria, will have four turbines and a capacity of 15MW, as advances in offshore wind turbine technology continue to push scale elsewhere.

The projects bring the total number of wind farms that Enel Green Power Espana has started building in the Teruel province to six, equal to an overall capacity of 218MW.

Endesa chief executive Jose Bogas said: “These plants mark the acceleration on a new wave of growth in the renewable energy space that Endesa is committed to pursue in the next years, driving the energy transition in Spain.”

The six wind farms under construction in Teruel are part of the 540MW that Enel Green Power Espana was awarded in the Spanish government's renewable energy tender held in May 2017.

In Aragon, the company will invest around €434 million euros, reflecting broader European wind power investment trends in recent years, to build 13 wind farms with a total installed capacity of more than 380MW.

The remaining 160MW of wind capacity will be located in Andalusia, Castile-Leon, Castile La Mancha and Galicia, even as some Spanish turbine factories closed during pandemic restrictions.

Enel Green Power Espana was also awarded 339MW of solar capacity in the Spanish government's auction held in July 2017, while other Spanish developers advance CSP projects abroad in markets like Chile.

Once all wind and solar under the 2017 tender are complete they will boost the company’s capacity by around 52%.

Related News

• Electricity Forum News

• Renewable Energy News

Ontario Electricity Pricing Pilot Projects explore alternative rates beyond time-of-use, with LDCs and the Ontario Energy Board testing dynamic pricing, demand management, smart-meter billing, and residential customer choice to enhance service and energy efficiency.

Key Points

Ontario LDC trials testing alternatives to time-of-use rates to improve billing, demand response, and efficiency.

✅ Data shared across LDCs and Ontario Energy Board provincewide

✅ Tests dynamic pricing, peak/off-peak plans, demand management

✅ Insights to enhance customer choice, bills, and energy savings

The results from three electricity pilot projects being offered in southern Ontario will be valuable to utility companies across the province.

Ontario Energy Minister Glenn Thibeault was in Barrie on Tuesday to announce the pilot projects, which will explore alternative pricing plans for electricity customers from three different utility companies, informed by the electricity cost allocation framework guiding rate design.

"Everyone in the industry is watching to see how the pilots deliver.", said Wendy Watson, director of communications for Greater Sudbury Utilities.

"The data will be shared will all the LDCs [local distribution companies] in the province, and probably beyond...because the industry tends to share that kind of information."

Most electricity customers in the province are billed using time-of-use rates, including options like the ultra-low overnight rates that lower costs during off-peak periods, where the cost of electricity varies depending on demand.

The Ontario Energy Board said in a media release that the projects will give residential customers more choice in how much they pay for electricity at different times, reflecting changes for Ontario electricity consumers that expand plan options.

Pilot projects can help improve service

Watson says these kinds of projects give LDCs the chance to experiment and explore new ways of delivering their service, including demand-response initiatives like the Peak Perks program that encourage conservation.

"Any pilot project is a great way to see if in practice if the theory proves out, so I think it's great that the province is supporting these LDCs," she says.

GSU recently completed its own pilot project, the Home Energy Assessment and Retrofit (HEAR) program, which focused on customers who use electric baseboards to heat their homes, amid broader provincial support for electric bills to ease costs."We installed some measures, like programmable thermostats and a few other pieces of equipment into their house," Watson says. "We also made some recommendations about other things that they could do to make their homes more energy efficient."

At the end of the program, GSU provided customers with a report so that they could the see the overall impact on their energy consumption.

Watson says a report on the results of the HEAR program will be released in the near future, for other LDCs interested in new ways to improve their service.

"We think it's incumbent on every LDC...to see what ideas that they can come up with and get approved so they can best serve their customers."

Related News

• Electricity Forum News

• Energy Policy News

Rolls-Royce SMR UK Approval underscores nuclear innovation as regulators review a 470 MW factory-built modular reactor, aiming for grid power by 2029 to boost energy security, cut fossil fuels, and accelerate decarbonization.

Key Points

UK regulatory clearance for Rolls-Royce's 470 MW modular reactor, targeting grid power by 2029 to support clean energy.

✅ UK design approval expected by mid 2024

✅ First 470 MW unit aims for grid power by 2029

✅ Modular, factory-built; est. £1.8b per 10-acre site

A Rolls-Royce (RR.L) design for a small modular nuclear reactor (SMR) will likely receive UK regulatory approval by mid-2024, reflecting progress seen in the US NRC safety evaluation for NuScale as a regulatory benchmark, and be able to produce grid power by 2029, Paul Stein, chairman of Rolls-Royce Small Modular Reactors.

The British government asked its nuclear regulator to start the approval process in March, in line with the UK's green industrial revolution agenda, having backed Rolls-Royce’s $546 million funding round in November to develop the country’s first SMR reactor.

Policymakers hope SMRs will help cut dependence on fossil fuels and lower carbon emissions, as projects like Ontario's first SMR move ahead in Canada, showing momentum.

Speaking to Reuters in an interview conducted virtually, Stein said the regulatory “process has been kicked off, amid broader moves such as a Canadian SMR initiative to coordinate development, and will likely be complete in the middle of 2024.

“We are trying to work with the UK Government, and others to get going now placing orders, echoing expansions like Darlington SMR plans in Ontario, so we can get power on grid by 2029.”

In the meantime, Rolls-Royce will start manufacturing parts of the design that are most unlikely to change, while advancing partnerships like a MoU with Exelon to support deployment, Stein added.

Each 470 megawatt (MW) SMR unit costs 1.8 billion pounds ($2.34 billion) and would be built on a 10-acre site, the size of around 10 football fields, though projects in New Brunswick SMR debate have prompted questions about costs and timelines.

Unlike traditional reactors, SMRs are cheaper and quicker to build and can also be deployed on ships and aircraft. Their “modular” format means they can be shipped by container from the factory and installed relatively quickly on any proposed site.

Related News

• Electricity Forum News

• Power Generation News

Pickering Nuclear False Alert Investigation probes Ontario's emergency alert system after a provincewide cellphone, radio, and TV warning, assessing human error, Pelmorex safeguards, Emergency Management Ontario oversight, and communication delays.

Key Points

An Ontario probe into the erroneous Pickering nuclear alert, focusing on human error, system safeguards, and oversight.

✅ Human error during routine testing suspected

✅ Pelmorex safeguards and EMO protocols under review

✅ Two-hour all-clear delay prompts communication fixes

An investigation into a mistaken Pickering alert warning of an incident at the Pickering Nuclear Generating Station will be completed fairly quickly, Ontario's solicitor general said.

Sylvia Jones tapped the chief of Emergency Management Ontario to investigate how the alert warning of an unspecified problem at the facility was sent in error to cellphones, radios and TVs across the province at about 7:30 a.m. Sunday.

"It's very important for me, for the people of Ontario, to know exactly what happened on Sunday morning," said Jones. "Having said that, I do not anticipate this is going to be a long, drawn-out investigation. I want to know what happened and equally important, I want some recommendations on insurances and changes we can make to the system to make sure it doesn't happen again."

Initial observations suggest human error was responsible for the alert that was sent out during routine tests of the emergency alert, Jones said.

"This has never happened in the history of the tests that they do every day, twice a day, but I do want to know exactly all of the issues related to it, whether it was one human error or whether it was a series of things."

Martin Belanger, the director of public alerting for Pelmorex, a company that operates the alert system, said there are a number of safeguards built in, including having two separate platforms for training and live alerts.

"The software has some steps and some features built in to minimize that risk and to make sure that users will be able to know whether or not they're sending an alert through the...training platform or whether they're accessing the live system in the case of a real emergency," he said.

Only authorized users have access to the system and the province manages that, Belanger said. Once in the live system, features make the user aware of which platform they are using, with various prompts and messages requiring the user's confirmation. There is a final step that also requires the user to confirm their intent of issuing an alert to cellphones, radio and TVs, Belanger said.

On Sunday, a follow-up alert was sent to cellphones nearly two hours after the original notification, and similar grid alerts in Alberta underscore timing and public expectations.

NDP energy critic Peter Tabuns is critical of that delay, noting that ongoing utility scam warnings can further erode public trust.

"That's a long time for people to be waiting to find out what's really going on," he said. "If people lose confidence in this system, the ability to use it when there is a real emergency will be impaired. That's dangerous."

Treasury Board President Peter Bethlenfalvy, who represents the riding of Pickering-Uxbridge, said getting that alert Sunday morning was "a shock to the system," and he too wants the investigation to address the reason for the all-clear delay.

"We all have a lot of questions," he said. "I think the public has every right to know exactly what went on and we feel exactly the same way."

People in the community know the facility is safe, Bethlenfalvy said.

"We have some of the safest nuclear assets in the world -- the safest -- at 60 per cent of Ontario's electricity," he said.

A poll released Monday found that 82 per cent of Canadians are concerned about spills from nuclear reactors contaminating drinking water and 77 per cent are concerned about neighbourhood safety and security risks for those living close to nuclear plants. Oraclepoll Research surveyed 2,094 people across the country on behalf of Friends of the Earth between Jan. 2 and 12, the day of the false alert. The have a margin of error of plus or minus 2.1 per cent, 19 times out of 20.

The wording of Sunday's alert caused much initial confusion, and events like a power outage in London show how morning disruptions can amplify concern, warning residents within 10 kilometres of the plant of "an incident," though there was no "abnormal" release of radioactivity and residents didn't need to take protective steps, but emergency crews were responding.

In the event of a real emergency, the wording would be different, Jones said.

"There are a number of different alerts that are already prepared and are ready to go," she said. "We have the ability to localize it to the communities that are impacted, but because this was a test, it went provincewide."

Jones said she expects the results of the probe to be made public.

The Pickering nuclear plant has been operating since 1971, and had been scheduled to be decommissioned this year, but the former Liberal government -- and the current Progressive Conservative government -- committed to keeping it open until 2024. Decommissioning is now set to start in 2028.

It operates six CANDU reactors, generates 14 per cent of Ontario's electricity and is responsible for 4,500 jobs across the region, according to OPG, and OPG's credit rating remains stable.

During the COVID-19 pandemic, Hydro One employees supported the Province of Ontario in the fight against COVID-19.

The Green party is calling on the province to use this opportunity to review its nuclear emergency response plan, including pandemic staffing contingencies, last updated in 2017 and subject to review every five years.

Toronto Mayor John Tory praised Ontario for swiftly launching an investigation, but said communication between city and provincial officials wasn't what it should have been under the circumstances.

"It was a poor showing and I think everybody involved knows that," he said. "We've got to make sure it's not repeated."

Related News

• Electricity Forum News

• Utility Operations News

BC Hydro COVID-19 Bill Relief offers pandemic support with bill credits, rate cuts, and deferred payments for residential, small business, and industrial customers across B.C., easing utilities costs during COVID-19 economic hardship.

Key Points

COVID-19 bill credits, a rate cut, and deferred payments for eligible B.C. homes, small businesses, and industrial customers.

✅ Non-repayable credits equal to 3 months of average bills.

✅ Small businesses closed can skip bills for three months.

✅ Large industry may defer 50% of electricity costs.

B.C. residents who have lost their jobs or had their wages cut will get a three-month break on BC Hydro bills, while small businesses, amid commercial consumption plummets during COVID-19, are also eligible to apply for similar relief.

Premier John Horgan said Wednesday the credit for residential customers will be three times a household’s average monthly bill over the past year and does not have to be repaid as part of the government’s support package during the COVID-19 pandemic, as BC Hydro demand down 10% highlights the wider market pressures.

He said small businesses that are closed will not have to pay their power bills for three months, and in Ontario an Ontario COVID-19 hydro rebate complemented similar relief, and large industrial customers, including those operating mines and pulp mills, can opt to have 50 per cent of their electricity costs deferred, though a deferred costs report warned of long-term liabilities.

BC Hydro rates will be cut for all customers by one per cent as of April 1, a move similar to Ontario 2021 rate reductions that manufacturers supported lower rates at the time, after the B.C. Utilities Commission provided interim approval of an application the utility submitted last August.

Eligible residential customers can apply for bill relief starting next week and small business applications will be accepted as of April 14, while staying alert to BC Hydro scam attempts during this period, with the deadline for both categories set at June 30.

Related News

• Electricity Forum News

• T&D Business News