METI and OCCTO released the outlook for Winter 2025/26 power supply-demand balance at the end of October. This season is expected to be one of the most challenging periods in recent years due to structural constraints in thermal generation capacity, slow progress in grid expansion, rising uncertainties in LNG procurement, and increasing electrification associated with DX and GX.

The government’s latest forecast indicates reserve margins will remain slightly above the 3% adequacy threshold nationally. However, some areas face tight conditions with reserve margins in the 4% range. Considering factors such as abnormal weather, changes in fuel procurement situations, and the concentration of thermal power plants along the Tokyo Bay and Pacific coasts, which are vulnerable to natural disasters, there remains significant uncertainty in power supply-demand balance.

In addition to high-demand periods, attention will also be paid to the balance during transitional seasons. If further tightening is anticipated, officials may enforce emergency measures, such as asking generators to delay maintenance works.

Reserve margins have become a central concern for Japan’s energy planners in recent years. After market liberalization in 2016, major utilities accelerated the idling of aging, inefficient thermal units, shrinking the buffer that once cushioned sudden spikes in demand. The risks became clear during the winter of 2020–21, when cold weather, LNG tightness and weaker-than-expected output from thermal plants sent spot prices soaring more than twenty fold in a matter of days.