Japan Day-Ahead Power Clears at 31.15 Yen per kWh, Highest Since December 2022, as Gas Fuel Cost Nears 91% of Price

Japan's day-ahead system price for electricity delivered on Tuesday, Oct. 20, cleared at 31.15 yen per kilowatt-hour in Monday's auction, up 26.3% from 24.66 yen for delivery a week earlier, according to Japan Electric Power Exchange data. It is the highest system price since Dec. 23, 2022, when it reached 32.32 yen.

JEPX System Price Runs 63% Above Its September Average

The system price averaged 19.12 yen per kilowatt-hour in September and 19.14 yen in August, and it averaged about 19.63 yen for deliveries from Oct. 1 to Oct. 19, Oil Authority calculations from JEPX daily data. The Oct. 20 price is therefore about 63% above the September average and 59% above its Oct. 1 to Oct. 19 average. A year earlier, the system price for delivery on Oct. 20, 2025, was 11.40 yen, so the latest figure is roughly 2.7 times that level.

JEPX Tokyo, Kansai and Hokkaido Area Prices Rise Up to 61%

The weekly increase was uneven across JEPX's areas. The Tokyo area price rose 19.1% to 33.29 yen per kilowatt-hour, Chubu rose 18.9% to 31.95 yen, and Kansai rose 61.2% to 30.21 yen. Hokkaido cleared at 39.44 yen, up 58.5%, while Kyushu rose 17.7% to 19.93 yen.

The auction data show buyers bidding for more power while sellers offered less. Sell bids for Oct. 20 delivery totalled about 1.33 billion kilowatt-hours, 5.6% fewer than for Oct. 13, while buy bids rose 10.8% to 1.44 billion kilowatt-hours. Contracted volume rose 10.0% to about 1.10 billion kilowatt-hours, Oil Authority calculations from JEPX data.

Gas Fuel at TTF Parity Equals About 91% of Japan's Power Price

At the European Central Bank's Oct. 16 reference rates, 31.15 yen equals about US$0.197 per kilowatt-hour, or US$197 per megawatt-hour. ICE Endex Dutch TTF November gas, a benchmark for the LNG cargoes that Europe and Asia compete for, settled at 87.55 euros per megawatt-hour on Oct. 16, about US$28.87 per million British thermal units.

A combined-cycle gas plant at 55% efficiency burns about 6.2 million British thermal units per megawatt-hour of power. At the TTF-equivalent price, the fuel alone costs about US$179 per megawatt-hour, roughly 91% of the system price before capital, maintenance or grid costs, Oil Authority calculations. Most Japanese LNG arrives under term contracts priced below spot, so utilities' average fuel cost is lower, but spot-priced cargoes set the marginal signal in the day-ahead market.

IEA Says Gulf LPG and Product Exports Remain Below Half of Pre-War

The International Energy Agency said in its Oct. 14 Oil Market Report that Gulf LPG exports reached 670,000 barrels per day in September, against 1.5 million before the war, and that product and LPG flows from the region remain below half of pre-war levels. The U.S. Energy Information Administration estimates regional crude production shut-ins averaged 4.77 million barrels per day in September.

Europe is bidding for the same cargoes. Gas Infrastructure Europe data show EU storage at 74.33% full on Oct. 16, against 82.81% a year earlier, as covered in our EU storage report. Our report on South Korea covered how another large Asian buyer is shifting toward coal and nuclear to limit spot LNG purchases.

Henry Hub and AECO Gas Trade Far Below Asian and European Prices

Henry Hub spot gas was US$3.22 per million British thermal units on Oct. 16, according to the EIA, and Alberta Treasury Board and Finance reported AECO-C at C$2.12 per gigajoule on Oct. 15. At those prices, the fuel cost of a gas-fired megawatt-hour in North America is a small fraction of the cost implied by Asian and European benchmarks.

That gap is the economic case for Pacific LNG exports from North America, including Canada's West Coast, where shipping to Japan avoids the Strait of Hormuz and the Suez route. For North American producers, the Japanese power price is a signal of how much buyers will pay for secure winter supply.

JEPX Daily Results, ICE Endex TTF and AGSI Storage Next

JEPX publishes results for each day's delivery the morning before. Whether the system price stays above 30 yen as winter demand builds will depend on generator availability and LNG arrivals. ICE Endex settlements and AGSI storage data will show whether European competition for cargoes eases or intensifies.