Global Policy Forum

Japan's Nuclear Future in the Balance

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The March 2011 earthquake, tsunami and nuclear accident at Fukushima have led to a debate over the extent to which Japan should favor nuclear power as opposed to renewable energy resources for its growing energy base. Because Japan has virtually no indigenous oil or gas, it has relied heavily on nuclear power to reduce vulnerability to fossil fuel supply disruptions. Before the accident, Japanese government policy was to expand nuclear power so that by 2030 it would account for about half of Japanese electricity generation. Now, however, supporters of sustainable energy have urged a major shift away from nuclear toward solar, wind and geothermal power, which today accounts for only 1% of electricity generation. Aside from issues of cost, renewable energy faces the political and economic power of the close alliance between the government, reactor manufacturers and Japan's 10 leading electrical utilities which seek to maintain centralized control over the power grid – something which would be threatened by the growth of numerous small producers of renewables. 

By Andrew Pollack

May 9, 2011

The accident at the Fukushima Daiichi power plant has done more than spew radiation into the air and sea and force tens of thousands of people to evacuate their homes. It has blown a big hole in Japan’s energy policy, which had assumed that nuclear power would supply a growing part of the country’s needs.

On Tuesday, Prime Minister Naoto Kan said Japan  would  abandon plans to build new nuclear reactors, saying at a news conference in Tokyo that Japan needed to “start from  scratch” on its long-term energy policy.

Japanese officials had said over the weekend that Japan would not abandon nuclear power as an important source of energy, so many existing reactors are expected to keep operating. However, experts have been saying that it would now be difficult for Japan to further expand use of nuclear energy and realize a policy that predates the Fukushima disaster: construction of at least 14 new reactors by 2030 to go with the 54 that now exist. If completed, those reactors would have raised nuclear power’s share of Japan’s electricity generation to about 50 percent.

Advocates for renewable energy argue that the March earthquake, tsunami and nuclear accident have given the nation a reason to rebuild its economy as a world leader in clean, renewable energy — even though solar, wind and geothermal combined now account for only 1 percent of Japan’s electricity. An additional 8 percent or so comes from hydroelectric power.

“It is a battle between the future and the past,” said Tetsunari Iida, executive director of the Institute for Sustainable Energy Policies, a nonprofit policy research organization here.

Some members of Parliament recently held a forum, called Energy Shift Japan, to promote a move toward renewable sources.

And Masayoshi Son, the founder of Softbank and Japan’s richest man, said last month that he would donate about $12 million to start a research foundation for renewable energy. Continued reliance on atomic energy, he told a news conference, “would be a sin against our children, grandchildren and future generations.”

Those more attuned to the official government position, however, contend that renewable energy is too costly and requires too much land in this crowded country, leaving Japan little choice but to continue hitching its future to atomic energy, with fossil fuels filling any gap. “In the midterm, up to 2030, we cannot see the technological breakthrough that will allow us to get rid of nuclear power,” said Masakazu Toyoda, chief executive of the Institute of Energy Economics, Japan.

Even so, the future of the envisioned 14 reactors being planned is now unclear, with the public and local officials becoming more wary about living near such facilities. Already, the Tokyo Electric Power Company has been forced to drop plans to build two new reactors on the site of the crippled Fukushima Daiichi plant.

And just last Friday, the government requested that another utility, Chubu Electric Power, shut down a nuclear power plant 120 miles southwest of Tokyo until the company can fortify its earthquake and tsunami defenses. The company said on Monday that it would comply with that request. So many reactors have been shut down because of the earthquake or other factors, that soon only about 43 percent of Japan’s 49 gigawatts of nuclear capacity will be operational, according to Reuters.

Japan’s heavy dependence on nuclear power stems from its energy insecurity. With virtually no oil and natural gas of its own, it is almost totally reliant on imported fossil fuels, making the nation vulnerable to disruptions, for example any that might arise from unrest in the Middle East. And the cost of imported fossil fuels has risen from the equivalent of 1 percent of Japan’s gross domestic product in 1998 to almost 5 percent now.

Japan also imports uranium. But because the fuel is easier to stockpile than oil and gas, the government considers nuclear energy a quasi-domestic source. Atomic energy, to the extent it replaces fossil fuels, also reduces greenhouse gas emissions and is a little less expensive than energy from fossil fuels, according to the government.

Over the decades, nuclear power has been fostered by a close alliance between the government, electric companies and reactor manufacturers. Nuclear plants, as large, centralized sources of power, have helped Japan’s 10 main electric utilities maintain their control over the power grid.

The advent of a so-called smart grid that would handle power supplied by numerous small producers could threaten the utilities’ dominance. “What they want to do as much as possible is to keep distributed power off the agenda,” said Andrew DeWit, an expert on Japan’s energy policy at Rikkyo University.

While others beside the electric companies can generate electricity, so far this has not caught on in a big way. Now, though, some are calling for more competition in power production in an effort to spur innovation and bring down prices.

The government and power companies have not totally ignored renewable energy, but critics say they have not been aggressive enough. Over all, Ernst & Young ranks Japan 15th in the world in terms of attractiveness of its renewable energy markets and policies.

In 2002, the Japanese government mandated that by 2014, electric companies should produce about 1.6 percent of their electricity from renewable sources. That target did not include large hydroelectric power projects, for which many of the best opportunities have already been exploited.

Some regulators elsewhere are pursuing renewable energy more aggressively than Japan is. California, for instance, recently set a renewable-source goal for its electric companies of 20 percent by end of 2013 and 33 percent by the end of 2020.

Until 2004, Japan led the world in installation of solar photovoltaic cells. Japanese companies like Sharp and Sanyo are among the world’s largest manufacturers of solar panels.

But since then Germany and Spain, which offer higher subsidies to users, have raced ahead in the installation of solar panels.

Japan has made even less progress on wind energy. Some experts say Japan, which has little flat land, is not that well suited for wind power, although the Environment Ministry said recently that there was a huge potential in the northern part of the country.

But renewables could get a lift if Parliament, as expected, enacts a law requiring electric companies to buy electricity generated by wind, geothermal, biomass or small-scale hydroelectric power from those who produce it, paying premium prices to subsidize the providers’ costs. The system, known as a feed-in tariff, was started in late 2009 for solar energy produced by homeowners and businesses. The utilities pass the costs on to all their customers, raising electric bills slightly.

Mr. Iida of the sustainable energy institute said that it would be feasible for renewable energy to provide 30 percent of Japan’s electricity by 2020, with solar and wind each contributing about 7 to 8 percent, and hydroelectric providing most of the rest.

But Paul J. Scalise, an expert on Japan’s energy policy at Temple University’s Japan campus, said renewable energy was “simply uneconomical at the present time.” Wind and solar would also not provide the dependable electricity that Japanese industry needs, he said.

He said it cost Tokyo Electric 30.5 yen per kilowatt hour for renewable energy, compared with 9.1 yen for power from fossil fuels and 6.1 yen for nuclear power.

With nuclear plans now up in the air, Mr. Scalise said, electric companies “are not turning to renewables — they are turning to oil and gas again.” For instance, a Japanese consortium led by the trading company Itochu is considering building a plant in Vladivostok, Russia, to produce liquefied natural gas for shipment to Japan.

Still, the cost of renewable energy is declining as technology improves, while that of nuclear power is likely to rise after the accident because of stricter safety standards and higher liability insurance costs.

It is not clear if there is the political will to change the reliance on nuclear. In a nationwide telephone survey conducted in mid-April by the Asahi Shimbun, a leading Japanese newspaper, 41 percent said nuclear energy should be reduced or abandoned, up from 28 percent in 2007. And yet, 51 percent of respondents said the existing level of nuclear power should be retained, while 5 percent said it should increase.

One thing most experts agree on is that conservation should be a priority. Cutting power use 10 percent would be the equivalent of building about 13 reactors, said Mr. Toyoda of the energy economics institute.

The nation is likely to get a real-life conservation test in the coming months. Because of the nuclear and fossil fuel power plants knocked out by the earthquake and tsunami, businesses and households in some parts of the country will be asked to cut their peak energy use this summer by about 15 percent.


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