Japan just lived through its hottest summer on record.
June 2025 clocked in at +2.34 °C above the 1991–2020 average, the hottest since measurements began in 1898. July was hotter still at +2.89 °C, and on August 5, the city of Isesaki hit 41.8 °C — a new national all-time high. We’re not talking about quirky weather: climate scientists call this a non-stationary climate, where the odds of breaking old records aren’t just higher, they cluster together.
Back-to-back monthly and national records don’t happen in a stable system. In fact, attribution studies show the 2018 heatwave in Japan was “essentially impossible” without human-driven warming, and similar research on the 2022 summer heat put the human-caused fraction of risk at one-third to almost 100%, depending on the region. In other words: the dice are loaded.
Heatwaves and the Price of Power
For Japan’s electricity market, temperature is not just background noise — it’s a structural driver. Power demand in Japan has a U-shaped relationship with temperature: both freezing winters and sweltering summers push usage up.
On the cold side, remember January 2021, when a cold snap sent JEPX day-ahead prices to a record ¥251/kWh as LNG supplies tightened. On the hot side, the pattern is just as clear. This July and August, power prices surged in step with “scorching weather” alerts. Late-afternoon peaks are particularly costly: solar PV flattens midday prices, but demand spikes again as the sun drops and the air-conditioning stays on.
Academic studies have quantified this: every +1 °C in certain urban contexts can mean hundreds of extra megawatts of demand. Forecasting models that incorporate temperature data consistently outperform those that don’t, and traders in Japan are starting to treat weather risk as a core input — not just a side variable.
The Baseline Wars: 1850 vs 1900
You’ll often hear climate progress measured against “pre-industrial levels.” The IPCC standard is 1850–1900, but some use 1900 or even later. The problem? The later you start, the smaller the apparent warming. Choosing 1900 as your baseline can understate warming by about 0.1 °C — a small number on paper, but enough to distort whether we think we’ve “crossed” critical thresholds like 1.5 °C.
Why Rolling 10-Year Averages Can Mislead
NASA’s James Hansen and colleagues have been warning that the common practice of using 10-year running means can hide acceleration in the warming trend. Their argument: use 12-month running averages and track Earth’s energy imbalance to detect changes as they happen. By those measures, the 2023–2024 warming surge stands out sharply, likely influenced by reduced aerosol cooling and the climate system’s high sensitivity.
Why This Matters for Japan’s Energy Future
When extreme heat events come in clusters, the risk isn’t just one expensive day — it’s sustained pressure over weeks. For utilities, that means higher imbalance penalties and more volatile intraday cash flows. For traders, it means weather-driven shape risk, especially late-afternoon spikes that don’t line up with renewable output. And for policymakers, it means that choosing the wrong baseline — or smoothing away the last few years of data — risks underestimating how quickly the climate, and the market, are changing.
The summer of 2025 is a preview of the operating environment to come: hotter peaks, tighter supply, and a market where weather is not background noise, but the opening line of every story.