Hydro One launches Ultra-Low Overnight Electricity Price Plan


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Ultra-Low Overnight Price Plan delivers flexible electricity pricing from Hydro One and the Ontario Energy Board, with TOU, tiered options, off-peak EV charging savings, balanced billing, and an online calculator to optimize bills.

 

Key Points

An Ontario pricing option with ultra-low night rates, helping Hydro One customers save by shifting usage to off-peak.

✅ Four periods with ultra-low overnight rate for EV charging

✅ Compare TOU vs tiered with Hydro One's online calculator

✅ Balanced billing and due date choice support budget control

 

Hydro One has announced that customers have even more choice and flexibility when it comes to how they are billed for electricity with the company's launch of the Ontario Energy Board's new Ultra-Low Overnight Electricity Price Plan for customers. A new survey of Ontario customers, conducted by Innovative Research Group, shows that 74 per cent of Ontarians find having choice between electricity pricing plans useful.

"As their trusted energy advisor, we want our customers to know we have the insights and tools to help them make the right choice when it comes to their electricity plans," said Teri French, Executive Vice President, Safety, Operations and Customer Experience. "We know that choice and flexibility are important to our customers, and we are proud to now offer them a third option so they can select the plan that best fits their lifestyle."

The same survey revealed that fewer than half of Ontarians are familiar with either tiered or the new ultra-low overnight price plans. To better support its customers Hydro One is providing an online calculator to help them choose which pricing plan best suits their lifestyle. The company also offers additional flexibility and assistance in managing household budgets by providing customers with the ability to choose their billing due date and flatten usage spikes from temperature fluctuations through balanced billing.

During the pandemic, Ontario introduced electricity relief to support families, small businesses and farms, complementing these customer options.

"By offering families and small businesses more choice, we are putting them back in control of their energy bills," said Todd Smith, Minister of Energy. "Starting today Hydro One customers have a new option - the Ultra-Low Electricity Price Plan - which could help them save money each year, while making our province's grid more efficient."

Electricity price plan options

  • New Ultra-Low Overnight price plan (ULO): Designed for customers who use more electricity at night, such as those who charge their electric vehicle, this new price plan can help customers keep costs down and take control of their electricity bill by shifting usage to the ultra-low overnight price period and related off-peak electricity rates when province-wide electricity demand is lower.
  • This plan has four price periods that are the same in the summer as they are in the winter and includes an ultra-low overnight rate.
  • Time-of-Use price plan (TOU): TOU provides customers with more control over their electricity bill by adjusting their usage habits with time-of-use rates used in other jurisdictions as well.
  • In this plan, electricity prices change throughout each weekday, when demand is on-peak, and peak hydro rates can affect overall costs.
  • Tiered price plan (RPP): Tiered pricing provides customers with the flexibility to use electricity at any time of day at the same low price up until the threshold is exceeded during the month, after that usage is charged at a higher price.
  • For residential customers, the winter period (November 1 – April 30) threshold is 1,000 kWh per month and the summer period (May 1 – October 31) threshold is 600 kWh per month. 
  • For small business customers, the threshold is 750 kWh throughout the year, while broader stable electricity pricing supports industrial and commercial companies.

 

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Energy crisis: EU outlines possible gas price cap strategies

EU Gas Price Cap Strategies aim to curb inflation during an energy crisis by capping wholesale gas and electricity generation costs, balancing supply and demand, mitigating subsidies, and safeguarding supply security amid Russia-Ukraine shocks.

 

Key Points

Temporary EU measures to cap gas and power prices, curb inflation, manage demand, and protect supply security.

✅ Flexible temporary price limits to secure gas supplies

✅ Framework cap on gas for electricity generation with demand checks

✅ Risk: subsidies, higher demand, and market distortions

 

The European Commission has outlined possible strategies to cap gas prices as the bloc faces a looming energy crisis this winter. 

Member states are divided over the emergency measures designed to pull down soaring inflation amid Russia's war in Ukraine. 

One proposal is a temporary "flexible" limit on gas prices to ensure that Europe can continue to secure enough gas, EU energy commissioner Kadri Simson said on Tuesday. 

Another option could be an EU-wide "framework" for a price cap on gas used to generate electricity, which would be combined with measures to ensure gas demand does not rise as a result, she said.

EU leaders are meeting on Friday to debate gas price cap strategies amid warnings that Europe's energy nightmare could worsen this winter.

Last week, France, Italy, Poland and 12 other EU countries urged the Commission to propose a broader price cap targeting all wholesale gas trade. 

But Germany -- Europe's biggest gas buyer -- and the Netherlands are among those opposing electricity market reforms within the bloc.

Russia has slashed gas deliveries to Europe since its February invasion of Ukraine, with Moscow blaming the cuts on Western sanctions imposed in response to the invasion, as the EU advances a plan to dump Russian energy across the bloc.

Since then, the EU has agreed on emergency laws to fill gas storage and windfall profit levies to raise money to help consumers with bills. 

Price cap critics
One energy analyst told Euronews that an energy price cap was an "unchartered territory" for the European Union. 

The EU's energy sector is largely liberalised and operates under the fundamental rules of supply and demand, making rolling back electricity prices complex in practice.

"My impression is that member states are looking at prices and quantities in isolation and that's difficult because of economics," said Elisabetta Cornago, a senior energy researcher at the Centre for European Reform.

"It's hard to picture such a level of market intervention This is uncharted territory."

The energy price cap would "quickly start costing billions" because it would force governments to continually subsidise the difference between the real market price and the artificially capped price, another expert said. 

"If you are successful and prices are low and you still get gas, consumers will increase their demand: low price means high demand. Especially now that winter is coming," said Bram Claeys, a senior advisor at the Regulatory Assistance Project. 

 

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Tracking Progress on 100% Clean Energy Targets

100% Clean Energy Targets drive renewable electricity, decarbonization, and cost savings through state policies, CCAs, RECs, and mandates, with timelines and interim goals that boost jobs, resilience, and public health across cities, counties, and utilities.

 

Key Points

Policies for cities and states to reach 100% clean power by set dates, using mandates, RECs, and interim goals.

✅ Define eligible clean vs renewable resources

✅ Mandate vs goal framework with enforcement

✅ Timelines with interim targets and escape clauses

 

“An enormous amount of authority still rests with the states for determining your energy future. So we can build these policies that will become a postcard from the future for the rest of the country,” said David Hochschild, chair of the California Energy Commission, speaking last week at a UCLA summit on state and local progress toward 100 percent clean energy.

According to a new report from the UCLA Luskin Center for Innovation, 13 states, districts and territories, as well as more than 200 cities and counties, with standout clean energy purchases by Southeast cities helping drive momentum, have committed to a 100 percent clean electricity target — and dozens of cities have already hit it.

This means that one of every three Americans, or roughly 111 million U.S. residents representing 34 percent of the population, live in a community that has committed to or has already achieved 100 percent clean electricity, including communities like Frisco, Colorado that have set ambitious targets.

“We’re going to look back on this moment as the moment when local action and state commitments began to push the entire nation toward this goal,” said J.R. DeShazo, director of the UCLA Luskin Center for Innovation.

Not all 100 percent targets are alike, however. The report notes that these targets vary based on 1) what resources are eligible, 2) how binding the 100 percent target is, and 3) how and when the target will be achieved.

These distinctions will carry a lot of weight as the policy discussion shifts from setting goals to actually meeting targets. They also have implications for communities in terms of health benefits, cost savings and employment opportunities.

 

100% targets come in different forms

One key attribute is whether a target is based on "renewable" or "clean" energy resources. Some 100 percent targets, like Hawaii’s and Rhode Island’s 2030 plan, are focused exclusively on renewable energy, or sources that cannot be depleted, such as wind, solar and geothermal. But most jurisdictions use the broader term “clean energy,” which can also include resources like large hydroelectric generation and nuclear power.

States also vary in their treatment of renewable energy certificates, used to track and assign ownership to renewable energy generation and use. Unbundled RECs allow for the environmental attributes of the renewable energy resource to be purchased separately from the physical electricity delivery.

The binding nature of these targets is also noteworthy. Seven states, as well as Puerto Rico and the District of Columbia, have passed 100 percent clean energy transition laws. Of the jurisdictions that have passed 100 percent legislation, all but one specifies that the target is a “mandate,” according to the report. Nevada is the only state to call the target a “goal.”

Governors in four other states have signed executive orders with 100 percent clean energy goals.

Target timelines also vary. Washington, D.C. has set the most ambitious target date, with a mandate to achieve 100 percent renewable electricity by 2032. Other states and cities have set deadline years between 2040 and 2050. All "100 percent" state laws, and some city and county policies, also include interim targets to keep clean energy deployment on track.

In addition, some locations have included some form of escape clause. For instance, Salt Lake City, which last month passed a resolution establishing a goal of powering the county with 100 percent clean electricity by 2030, included “exit strategies” in its policy in order to encourage stakeholder buy-in, said Mayor Jackie Biskupski, speaking last week at the UCLA summit.

“We don’t think they’ll get used, but they’re there,” she said.

Other locales, meanwhile, have decided to go well beyond 100 percent clean electricity. The State of California and 44 cities have set even more challenging targets to also transition their entire transportation, heating and cooling sectors to 100 percent clean energy sources, and proposals like requiring solar panels on new buildings underscore how policy can accelerate progress across sectors.

Businesses are simultaneously electing to adopt more clean and renewable energy. Six utilities across the United States have set their own 100 percent clean or carbon-free electricity targets. UCLA researchers did not include populations served by these utilities in their analysis of locations with state and city 100 percent clean commitments.

 

“We cannot wait”

All state and local policies that require a certain share of electricity to come from renewable energy resources have contributed to more efficient project development and financing mechanisms, which have supported continued technology cost declines and contributed to a near doubling of renewable energy generation since 2008.

Many communities are switching to clean energy in order to save money, now that the cost calculation is increasingly in favor of renewables over fossil fuels, as more jurisdictions get on the road to 100% renewables worldwide. Additional benefits include local job creation, cleaner air and electricity system resilience due to greater reliance on local energy resources.

Another major motivator is climate change. The electricity sector is responsible for 28 percent of U.S. greenhouse gas emissions, second only to transportation. Decarbonizing the grid also helps to clean up the transportation sector as more vehicles move to electricity as their fuel source.

“The now-constant threat of wildfires, droughts, severe storms and habitat loss driven by climate change signals a crisis we can no longer ignore,” said Carla Peterman, senior vice president of regulatory affairs at investor-owned utility Southern California Edison. “We cannot wait and we should not wait when there are viable solutions to pursue now.”

Prior to joining SCE on October 1, Peterman served as a member of the California Public Utilities Commission, which implements and administers renewable portfolio standard (RPS) compliance rules for California’s retail sellers of electricity. California’s target requires 60 percent of the state’s electricity to come from renewable energy resources by 2030, and all the state's electricity to come from carbon-free resources by 2045.  

 

How CCAs are driving renewable energy deployment

One way California communities are working to meet the state’s ambitious targets is through community-choice aggregation, especially after California's near-100% renewable milestone underscored what's possible, via which cities and counties can take control of their energy procurement decisions to suit their preferences. Investor-owned utilities no longer purchase energy for these jurisdictions, but they continue to operate the transmission and distribution grid for all electricity users.                           

A second paper released by the Luskin Center for Innovation in recent days examines how community-choice aggregators are affecting levels of renewable energy deployment in California and contributing to the state’s 100 percent target.

The paper finds that 19 CCAs have launched in California since 2010, growing to include more than 160 towns, cities and counties. Of those communities, 64 have a 100 percent renewable or clean energy policy as their default energy program.

Because of these policies, the UCLA paper finds that “CCAs have had both direct and indirect effects that have led to increases in the clean energy sold in excess of the state’s RPS.”

From 2011 to 2018, CCAs directly procured 24 terawatt-hours of RPS-eligible electricity, 11 TWh of which have been voluntary or in excess of RPS compliance, according to the paper.

The formation of CCAs has also had an indirect effect on investor-owned utilities. As customers have left investor-owned utilities to join CCAs, the utilities have been left holding contracts for more renewable energy than they need to comply with California’s clean energy targets, amid rising solar and wind curtailments that complicate procurement decisions. UCLA researchers estimate that this indirect effect of CCA formation has left IOUs holding 13 terawatt-hours in excess of RPS requirements.

The paper concludes that CCAs have helped to accelerate California’s ability to meet state renewable energy targets over the past decade. However, the future contributions of CCAs to the RPS are more uncertain as communities make new power-purchasing decisions and utilities seek to reduce their excess renewable energy contracts.

“CCAs offer a way for communities to put their desire for clean energy into action. They're growing fast in California, one of only eight states where this kind of mechanism is allowed," said UCLA's Kelly Trumbull, an author of the report. "State and federal policies could be reformed to better enable communities to meet local demand for renewable energy.”

 

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Hydro Quebec to increase hydropower capacity to more than 37,000 MW in 2021

Hydro Quebec transmission expansion aims to move surplus hydroelectric capacity from record reservoirs to the US grid via new interties, increasing exports to New England and New York amid rising winter peak demand.

 

Key Points

A plan to add capacity and intertie links to export surplus hydro power from Quebec's reservoirs to the US grid.

✅ 245 MW added in 2021; portfolio reaches 37,012 MW

✅ Reservoirs at unprecedented levels; export potential high

✅ Lacks US transmission; working on new interties

 

Hydro Quebec plans to add an incremental 245 MW of hydro-electric generation capacity in 2021 to its expansive portfolio in the north of the province, while Quebec authorized nearly 1,000 MW for industrial projects across the region, bringing the total capacity to 37,012 MW, an official said Friday

Quebec`s highest peak demand of 39,240 MW occurred on January 22, 2014.

A little over 75% of Quebec`s population heat their homes with electricity, Sutherland said, aligning with Hydro Quebec's strategy to wean the province off fossil fuels over time.

The province-owned company produced 205.1 TWh of power in 2017 and its net exports were 34.4 TWh that year, while Ontario chose not to renew a power deal in a separate development.

Sutherland said Hydro Quebec`s reservoirs are currently at "unprecedented levels" and the company could export more of its electricity to New England and New York, but faces transmission constraints that limit its ability to do so.

Hydro Quebec is working with US transmission developers, electric distribution companies, independent system operators and state government agencies to expand that transmission capacity in order to delivery more power from its hydro system to the US, Sutherland said.

Separately, NB Power signed three deals to bring more Quebec electricity into the province, reflecting growing regional demand.

The last major intertie connection between Quebec and the US was completed close to 30 years ago. The roughly 2,000 MW capacity transmission line that connects into the Boston area was completed in the late 1990s, according to Hydro Quebec spokeswoman Lynn St-Laurent.

 

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UK National Grid Commissions 2GW Substation

UK 2-GW Substation strengthens National Grid power transmission in Kent, enabling offshore wind integration, voltage regulation, and grid modernization to meet rising electricity demand and support the UK energy transition with resilient, reliable infrastructure.

 

Key Points

National Grid facility in Kent that steps voltage, regulates power, and connects offshore wind to strengthen UK grid.

✅ Adds 2 GW capacity to meet rising electricity demand

✅ Integrates offshore wind farms into transmission network

✅ Improves reliability, voltage control, and grid resilience

 

The United Kingdom has strengthened its national power grid with the commissioning of a major new 2-gigawatt capacity substation in Kent. This massive project, a key part of the National Grid's ongoing efforts to modernize and expand power transmission infrastructure, including plans to fast-track grid connections across critical projects, will play a critical role in supporting the UK's energy transition and growing electricity demands.


What is a Substation?

Substations are vital components of electricity grids. They serve as connection points, transforming high voltage electricity from power plants to lower voltages suitable for homes and businesses. They also help to regulate voltage levels, and, where appropriate, interface with expanding HVDC technology initiatives, ensuring stable electricity delivery.  Modern substations often act as hubs, supporting the integration of renewable power sources with the main electricity network.


Why This Substation Is Important

The new 2-gigawatt capacity substation is significant for several reasons:

  • Expanding Capacity: It adds significant capacity to the UK's grid, enabling the transmission of large amounts of electricity to where it's needed. This capacity boost is crucial for supporting growing electricity demand as the UK shifts its energy mix towards renewable sources.
  • Integrating Renewables: The substation will aid in integrating substantial amounts of offshore wind power, as projects like the Scotland-England subsea link illustrate, helping the UK achieve its ambitious clean energy goals. Offshore wind farms are a booming source of renewable energy in the UK, and ensuring reliable connections to the grid is essential in maximizing their potential.
  • Future-Proofing the Grid: The newly commissioned substation helps bolster the reliability and resilience of the UK's power transmission network, where reducing losses with superconducting cables could further enhance efficiency. It will play a key role in securing electricity supplies as older power plants are decommissioned and renewable energy sources become more dominant.


A Landmark Project

The commissioning of this substation is a major achievement for the National Grid, amid an independent operator transition underway in the sector, and UK energy infrastructure upgrades. The sheer scale of the project required extensive planning and collaboration with various stakeholders, underscoring the complexity of upgrading the nation's power grid to meet future needs.


The Path Towards a Cleaner Grid

The new substation is not an isolated project. It is part of a broader, multi-year effort by the National Grid to modernize and expand the country's power grid.  This entails building new transmission lines and urban conduits such as London's newest electricity tunnel now in service, investing in storage technologies, and adapting infrastructure to accommodate the shift towards distributed energy generation, where power is generated closer to the point of use.


Beyond Substations

While projects like the new 2-gigawatt substation are crucial, ensuring a successful energy transition requires more than just infrastructure upgrades. Continued support for renewable energy development, highlighted by recent offshore wind power milestones that demonstrate grid-readiness, investment in emerging energy storage solutions, and smart grid technology that leverages data for effective grid management are all important components of building a cleaner and more resilient energy future for the UK.

 

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Iran Says Deals to Rehabilitate, Develop Iraq Power Grid Finalized

Iran-Iraq Power Grid Deals reinforce electricity and natural gas ties, upgrading transmission in Karbala and Najaf, repairing transformers, easing sanctions bottlenecks, and weighing GCC interconnection to diversify supply and reduce distribution losses across Iraq.

 

Key Points

Agreements to rehabilitate Iraq's grid, cut losses, and secure power via Iranian gas, electricity, and upgrades.

✅ Reduce distribution losses in Karbala and Najaf

✅ Repair and replace damaged distribution transformers

✅ Coordinate payments to TAVANIR amid US sanctions

 

Iran and Iraq have finalized two deals to rehabilitate and develop the power grid of Iraq, while Iran is upgrading thermal plants to combined cycle at home to save energy, IRNA cited the Iranian Energy Minister Reza Ardakanian.

Ardakanian met his Iraqi counterpart Majid Mahdi Hantoush in Tehran on Tuesday evening for talks on further energy cooperation on the sidelines of Prime Minister Mustafa al-Kadhimi’s trip to the Islamic Republic on his first foreign visit.

“It was decided that the contracts related to reducing losses on the electricity distribution network in the provinces of Karbala and Najaf, as well as the contract for repairing Iraq’s distribution transformers would be finalized and signed,” the Iranian minister said.

Iraq relies on Iran for natural gas that generates as much as 45 percent of its electricity, with Iran supplying 40% of Iraq’s power according to sector reports. Iran transmits another 1,200 MW directly, and has regional power hub plans as well, making itself an indispensable energy source for its Arab neighbor, but the United States is trying to pry Baghdad away from Tehran’s orbit.

The US has been enlisting its companies and allies such as Saudi Arabia to replace Iran as Iraq’s source of energy.

Iran’s money from exports of gas and electricity has accumulated in bank accounts in Iraq, because US sanctions are preventing Tehran from repatriating it.

In January, an official said the sanctions were giving Iran a run for five billion dollars, “sedimenting” at the Central Bank of Iraq, because Tehran could not access it.

Ardakanian said the issue was brought up in the discussions on Tuesday and it was agreed that “the payment of part of TAVANIR (Iran Power Generation and Transmission Company)’s claims will start from the end of July”.

The US administration is pushing for a deal between Washington, Baghdad and six Persian Gulf states to connect Iraq’s nationwide power grid to that of the Persian Gulf Cooperation Council, while Uzbekistan looks to export power to Afghanistan as regional linkages expand.

The US State Department said in a statement last Thursday that the six countries that make up the (Persian) Gulf Cooperation Council Interconnection Authority (GCCIA) — Saudi Arabia, Kuwait, Bahrain, Qatar, Oman and the UAE — had affirmed their shared support for the project to supply electricity to Iraq.

Iraq needs more than 23,000 MW of electricity to meet its domestic demand, and is exploring nuclear power plans to tackle shortages, but years of war following the 2003 US invasion have left its power infrastructure in tatters and a deficit of some 7,000 MW.

In the past, officials in Baghdad have said there is no easy substitute to imports from Iran because it will take years to adequately build up Iraq’s energy infrastructure, and meeting summer electricity needs remains a persistent challenge.

They have said American demand acknowledges neither Iraq’s energy needs nor the complex relations between Baghdad and Tehran.

In addition to natural gas and electricity, Iraq imports a wide range of goods from Iran including food, agricultural products, home appliances, and air conditioners.

On Tuesday, the Iraqi prime minister said during a joint news conference with Iranian President Hassan Rouhani that the purpose of his trip to Tehran was to strengthen historical ties between the two countries, especially in light of the challenges they faced as a result of the coronavirus outbreak and the fall of oil prices.

“In the face of such challenges, we need coordination between the two countries in a way that serves the interests of Iran and Iraq.”

Both Iran and Iraq, Kadhimi said, suffer from economic problems, adding the two countries need comprehensive and inclusive cooperation to overcome them.

Kadhimi said Iran-Iraq relations are not merely due to the geographical location of the two countries and their 1,450-km border, adding the ties are based on religion and culture and rooted in history.

“I am reiterating to my brothers in the Islamic Republic of Iran that the Iraqi nation is eager to have excellent relations with the Islamic Republic of Iran based on the principle of non-interference in the internal affairs of the two countries.”

Kadhimi said Iran and Iraq fought against terrorism and Takfiri groups together, and the Islamic Republic of Iran was one of the first countries to stand by Iraq.

“We will not forget this. That is why Iraq has stood with Iran to help it overcome economic challenges and turned to a big market for trade with Iran,” he said.

“We seek stability in Iraq and our philosophy and view of Iran is that we consider Iran a stable, strong, prosperous and progressive country, and this fact is in the interest of Iraq and the territorial integrity of the region,” he added.

According to Kadhimi, the two sides discussed implementing agreements between them, including connecting their railway through Khorramshahr in Iran and Basra in Iraq, adding he was very confident the agreements would be implemented soon.

Iraq’s delegation included the ministers of foreign affairs, finance, health, and planning, as well as Kadhimi’s national security adviser, some of whom also met their Iranian counterparts.

Last year, Iran’s exports to Iraq amounted to nearly $9 billion, IRNA reported. It said the two nations will discuss increasing that amount to $20 billion.

“The two governments’ will is to expand bilateral trade to $20 billion,” Rouhani said after an hour-long meeting with the Iraqi prime minister.

 

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Analysis: Out in the cold: how Japan's electricity grid came close to blackouts

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."
 

 

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