[Japan] BP enters Japan’s power market

On November 27, 2023, BP announced that it has entered Japan’s power market after receiving approval from the Ministry of Economy, Trade and Industry (METI).[1] BP Energy Japan (BPEJ), part of the company’s trading and shipping business, will operate the new business. In a statement, BP said the move was part of its plan to expand its investment in several areas of growth, including renewable energy and electricity. BP, which has been a supplier of liquefied natural gas (LNG), oil, petroleum products, and lubricants to Japan for over 60 years, plans to expand into low-carbon energy in the coming decades as it seeks to create a business model that can survive the global transition away from fossil fuels.

[1] https://www.bp.com/content/dam/bp/country-sites/ja_jp/japan/home/%E3%83%8B%E3%83%A5%E3%83%BC%E3%82%B9/pressrelease/documents/2023/BPEJ%20Announcement_231127%20FINAL.pdf

[USA] EIA: U.S. power use to hit record in 2022

According to the Energy Information Administration’s (EIA) Short-Term Energy Outlook (STEO), released on November 8, 2022, U.S. power consumption will rise to a record high in 2022 due to increasing economic activity and hotter summer weather.[1] The EIA projects that power demand increase from 3,930 billion kWh in 2021 to 4,036 billion kWh in 2022 before decreasing to 3,989 billion kWh in 2023 as temperatures moderate. Compared to 2021, in 2022, the EIA projects that power sales will rise to 1,509 billion kWh for residential consumers, 1,371 billion kWh for commercial customers, and 1,014 billion kWh for the industrial sector. Historically, record highs for power sales were 1,477 billion kWh for residential consumers set in 2021, 1,382 billion kWh for commercial customers set in 2018, and 1,064 billion kWh for industrial customers set in 2000. The EIA attributed the power sale increase for commercial customers to more people returning to the office.

The EIA expects that renewable sources will provide 22% of U.S. electricity generation in 2022 and 24% in 2023, largely coming from solar and wind capacity additions. Generation from natural gas will decline from 38% in 2022 to 36% in 2023.Coal's share will drop from 20% in 2022 and 19% in 2023.

[1] https://www.eia.gov/outlooks/steo/

[USA] Southeast utilities file SEEM proposal with FERC

On February 12, 2021, utilities in the Southeast filed with the Federal Energy Regulatory Commission (FERC) for the approval to create a new electricity market called the Southeast Energy Exchange Market (SEEM).[1] SEEM would set up an automated trading platform to buy and sell excess wholesale energy every 15 minutes, with the aim to reduce costs to customers and boost renewable energy resources. The new electricity market is expected to increased carbon-free energy across the Southeast by making it easier for utilities to incorporate renewables while maintaining reliability. SEEM members include Southern Company, Dominion Energy, and Duke Energy.[2] In their filing with FERC, the utilities requested that the commission give stakeholders a 30-day comment period. The utilities also request that FERC fast-tracks its review of the proposal and decide by May 13, 2021. If the proposal is approved, the market would be operational by early 2022.

[1] https://southerncompany.mediaroom.com/2021-02-12-Southeast-electric-providers-submit-filing-with-FERC-for-proposed-advanced-bilateral-market-platform

[2] The full list of expected members is: Associated Electric Cooperative, Dalton Utilities, Dominion Energy South Carolina, Duke Energy Carolinas, Duke Energy Progress, Georgia System Operations Corporation, Georgia Transmission Corporation, LG&E and KU Energy, MEAG Power, NCEMC, Oglethorpe Power Corp., PowerSouth, Santee Cooper, Southern Company and TVA.

[Japan] Japan increases monitoring as electricity market prices reach record high

According to Reuters, after electricity prices reached 103.1 yen ($1)/kWh on January 6, 2020, Japanese energy regulators say they have increased scrutiny of the electricity market.[1] Electricity prices on the Japan Electric Power Exchange (JPEX) have surged since December 2020 and are now at the highest level since trading started in 2005. Colder-than-normal winter weather has increased demand for heating. At the same time, many power producers have had to lower run rates or suspend operations due to delayed imports of liquefied natural gas (LNG). According to Yoshiaki Kuroda, the director of market policy planning, the Electricity and Gas Market Surveillance Commission closely monitoring trading on JPEX. So far, the commission has not found any improper trades. The Organization for Cross-regional Coordination of Transmission Operators (OCCTO), Japan’s electricity grid coordinator, also stepped in to avoid power shortages in Tokyo and Osaka. OCCTO directed power suppliers to operate at full capacity and offer surplus supplies to the market.

[1] https://www.reuters.com/article/japan-electricity-idUSL1N2JH0YD