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Japan may ask households and businesses to cut back on natural gas use on the back of concerns that increase in global competition for the precious fuel will disrupt stable supply.
A panel within Japan’s trade ministry called for discussion to create a framework that would allow the government to ask households and businesses to conserve gas when supply is tight, according to documents released Monday. While long-term liquefied natural gas contracts help the country secure stable supply, competition over the fuel is increasing and “conservation measures will be needed” in the event there are disruptions to energy procurement, the document said.
The government will first ask households and businesses to curb gas usage to the best of their abilities, and if that’s not enough to avoid supply shortages will follow up with specific conservation targets, according to the documents. Local media Nikkei reported the plan earlier.
The discussion comes after recent moves by Russia to transfer the rights to the Sakhalin-2 natural gas project to a new company, which could threaten foreign owners including Japanese firms. The Japanese government is already asking its citizens to play their part in power conservation, as electricity supply is expected to be tight this summer and winter.
Japan is expected to have enough power supply this week, with rainy weather expected to lower temperatures in several parts of the country. The power-reserve ratio, which measure spare capacity of generators, is expected to be lowest for the Tokyo area on Wednesday at 7.1%, according to the trade ministry, still above the 3% needed for a stable grid. Japan’s next-day spot electricity price settled at ¥31.22 a kilowatt-hour on Monday, according to the Japan Electric Power Exchange, down 3.8% from a week earlier.
