Japan's Power Use Drops 5.4% on Lower Temperatures

By Megumi Yamanaka and Michio Nakayama

Sept. 5 (Bloomberg) -- Japanese electricity consumption dropped 5.4 percent in August from a year earlier as the world's third-biggest energy user curtailed demand on cooler weather.

Consumption fell to 91.48 billion kilowatt-hours, according to data released by the Electric Power System Council of Japan, which oversees grids throughout the country. Electricity demand typically peaks in August when homes and offices turn on air conditioners to stave off the summer heat.

Northern and western Japan experienced heavy rains and cooler weather last month. Demand slipped the most in the capital and the surrounding region, dropping 7.3 percent from a year ago. Other areas, except for Okinawa, where data weren't available, posted declines of more than 3 percent.

``Consumption, especially from households, was low,'' Hirofumi Kawachi, an energy analyst at Mizuho Investors Securities Co., said by telephone today. ``The Tokyo area is more likely to be affected by changes in weather since there are more service-sector businesses compared with other regions.''

Power producers including Tokyo Electric Power Co., Asia's biggest utility, and in-house generators supplied 30.31 billion kilowatt-hours to the Greater Tokyo region last month, the data showed. The average temperature in the capital was 2.1 degrees Celsius lower than a year earlier, the weather bureau said.

Demand in the Chubu area, of which Chubu Electric Power Co. is the main power supplier, fell 5.3 percent to 13.33 billion kilowatt-hours.

Economic Impact

``It's too early to say demand fell because industrial customers cut back on electricity use,'' Kawachi said. ``Demand from industrial users, in my opinion, remains steady.''

Power consumption is sometimes used as an indicator of economic well-being. The Ministry of Finance today published data showing Japan's capital spending dropped more than estimated in the second quarter ended June 30, posting a fifth straight decline.

``Not only the U.S., but Japan, Europe and emerging economies are also experiencing a downturn, fueling concern that global growth will slow further,'' Koji Shimamoto, chief strategist at BNP Paribas in Tokyo, told Bloomberg Television.

To contact the reporter on this story: Megumi Yamanaka in Tokyo at myamanaka@bloomberg.net.