In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices for Aug 2-6 delivery in both East Japan and West Japan strengthened from the previous week. As the peak-demand month of August kicked off, spot prices moved into higher territory. In both East Japan and West Japan, persistent severe heat wave throughout the week boosted air-conditioning demand, pushing up volumes of bids to record-breaking 1,389.70 mil kWh for Aug 5 delivery. Reflecting brisk buying interest, trade volumes also expanded to a historical high of 1,118.47 mil for Aug 5 delivery. In East Japan, spot price extended a rally to hit Yen 50.00, the highest price in this fiscal year, during 15:30-16:00 hours for Aug 5 delivery. East Japan continued to outperform West Japan throughout the week. In line with growing demand, price trends reflected a difference in power supply configuration between East Japan and West Japan.

The actual highest price during the week was at Yen 50.00 in East Japan for Aug 5 delivery. The actual lowest price during the week was at Yen 6.66 in all of nine areas and the system price for Aug 2 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 12.07 in Hokkaido, up Yen 3.11 from the previous week, Yen 12.25 in Tohoku and Tokyo, up Yen 3.29, Yen 10.59 in Chubu, up Yen 1.35, Yen 10.58 in four areas including Hokuriku, Kansai, Chugoku and Shikoku, up Yen 1.34, and Yen 9.81 in Kyushu, up Yen 1.41.

Power demand in nine areas of Japan during Aug 2-6 was a combined 14,866.17 mil kWh, up 6.5% from 13,955.08 mil kWh during Jul 26-30. The figure was up 6.8% from the corresponding period a year earlier. Demand during Aug 3-7, 2020 after day of week adjustment was 13,922.85 mil kWh.

In the JEPX forward market, one transaction was reported on Aug 2, followed by two deals on Aug 3. On both days, the day time contract (delivery during 08:00-18:00 hours on weekdays) in Kansai changed hands on a weekly delivery basis with the following details: On Aug 2, 2MW for Aug 7-13 delivery at Yen 18.00. On Aug 3, 12MW for Aug 14-20 delivery at Yen 18.00 and 4MW for Aug 21-27 delivery at Yen 18.00.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Aug 2-6 were as below.

Deals reported on EEX (European Energy Exchange) during Aug 2-6 were as below.

In the week starting Aug 9, the price rally is likely to come to a lull. Ongoing severe heat wave is forecast to ease. Besides that, industrial demand for high and ultra-high voltage power is expected to slow down during the extended weekend ending Aug 9 and the Japanese Obon holiday during Aug 13-16. Large-scale factories often extend shutdown periods during the Obon period. Demand may wane as early as Aug 10, a factor that will likely put a lid on spot prices. But caution looms over another price spike after the Obon holiday. Spot prices may have a chance to surpass Yen 50.00 depending on temperature trends.