Can Japan keep the lights on? The war in Ukraine upsets a big energy bet.

However, the sudden price spike in early 2021 blindsided the company, which had not prepared for the possibility of a significant increase in costs, according to a statement it issued when it filed for bankruptcy.

Masaru Tagami, who is in charge of supplying facilities in the central Japanese city of Hida, one of Hope Energy’s former customers, said he was taken aback by the company’s “sudden” collapse and the rise in costs while its activity was entrusted to another. solidify.

The city’s annual electricity bill is expected to rise by 40%, he said, adding that the situation has upended his budget. “I am seriously concerned about the duration of these circumstances,” he said.

Power companies hit hard by the pandemic-related surge expected prices to fall by March as the effects on supply chains dissipate, said Junichi Ogasawara, senior research fellow at the ‘Institute of Energy Economics Japan.

“But with Russia’s invasion of Ukraine, the situation has changed to one where the current conditions will drag on,” he said.

Since then, the precariousness of Japan’s energy situation has only become clearer. In March, after an earthquake near Fukushima knocked out part of the power grid, a cold spell pushed Tokyo to the brink of blackouts. In the past, coal-fired power plants might have been tapped for cheap backup power, but old, inefficient plants were taken out of service.

In a disaster-prone country like Japan, “we’re still in a position where this stuff can happen again” unless the government addresses the problems introduced by deregulation and the patchwork shift to renewables, Dan said. Shulman, managing director of Shulman Advisory, a Japanese energy industry analyst firm.