Soaring summer temperatures led Japan’s Ministry of Economy, Trade and Industry (METI) on Sunday to issue an urgent request that all Japanese electricity consumers including heavy industry users such as steelmakers to curb their consumption, for fear the country’s power generating infrastructure will be unable to cope.
Though all utilities firms nationwide are under pressure, METI was most concerned about possible power shortages in the area covered by Tokyo Electric Power Company (TEPCO) whose service area includes the Kanto Plan around Tokyo and parts of Yamanashi and Shizuoka prefectures to Tokyo’s south and southwest where some 14 electric-arc-furnace (EAF) mills are located.
When making its plea Sunday, METI estimated that the reserve rates on Monday – the margin TEPCO would have to spare to meet spurts in demand – would be just 4.7% on Monday afternoon’s peak time of 4~4.30 pm and fall to a worryingly small 3.7% between 4.30 and 5pm. Even if power companies in other areas can divert some of their power to Tokyo, the risk of disruption was great.
“We are not contacting each company, but with the formal announcement from us, we hope each citizen and company will reduce their power consumption somehow,” a METI official told Mysteel Global.
On Saturday, the temperature in Isesaki city in Gunma prefecture, north of Tokyo, reached 40.2 degrees, the hottest June day ever recorded, while the temperature in Tokyo on Sunday reached 36.2 degrees, also a June record for the capital, according to Japan Meteorological Agency data.
The METI official said that with the severe heat, the request for power-use restraint was unavoidable because some thermal power stations have been taken offline for environmental reasons, because of age or for other reasons, and most nuclear power stations in Japan were halted after the Fukushima power plant accident in 2011 for safety checks or due to opposition from local residents. “There is a likelihood of further requests for restraint being made this summer,” he admitted.
A steel sales official with a mini-mill in Tokyo explained that among EAF mills, most power is consumed during steelmaking. These days, most mini-mills only operate at night – to enjoy a lower power rate – but that some mills may be operating their re-rolling mills during day shifts and those may be affected, he warned.
“But if the power shortage causes a terrible situation, such as a blackout or continues into the evening hours, it will be a big problem for us,” he admitted. “We will have to monitor the situation very cautiously,” he told Mysteel Global.
A Tokyo-based steel trader said he was more concerned about the impact to manufacturers, the steel consumers, which may have to stop operations to comply with METI’s request.
“Among the automakers for example, their pace of production has been affected by the delay in component deliveries, and now they may have to slow down their operations due to power shortages,” he remarked. “Their steel consumption may decline further (so) we are very anxious to see how they might arrange their operations this summer,” he added.
And it’s not just weather events that can prompt METI alerts, Mysteel Global notes. Earlier this year on March 22, METI issued its first-ever power cut alert after a large earthquake with a maximum intensity of upper 6 on the Japanese seismic scale of 7 had occurred earlier, also off the Fukushima coast. The quake stopped some power plants in the area and large-sized industrial power consumers were asked to decrease power consumption, as reported.
Written by Yoko Manabe, yoko.manabe@mysteel.com
Note: This article has been published in accordance with an article exchange agreement between Mysteel Global and SteelMint.
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