Japan’s Energy Trilemma: Restarting Nuclear Power

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(Thousands Protest Against Nuclear Plant Restart; Image Source: RT News)

On 11 March 2011, Japan faced a 9.0 magnitude earthquake, tsunamis, aftershocks, and consequently the world’s biggest nuclear disaster since Chernobyl. Thousands of people lost their lives and livelihoods, many had been exposed to dangerous levels of radiation, and others were fearful of exposure. Following the level 7 nuclear meltdown in Fukushima, all of the 50 remaining nuclear reactors were shut down on safety concerns. Energy procurement became a major challenge for the Japanese economy.

Japan currently faces an energy ‘trilemma’. Shortage of domestic supply exposes the economy to fluctuations in foreign supply and prices. With the weak yen, energy imports are expensive. Nuclear power had been environment friendly, but fossil fuel imports are making it harder to meet ambitious CO2 emission targets that Japan committed to.

Japan’s energy self-sufficiency is currently among the lowest in the world, and is the lowest among the G8 countries. Prior to 2011, energy self-sufficiency was approaching close to 20%, and the plan was to double self-sufficiency by 2030 by increasing the share of nuclear power from 30% to 50% and doubling the share of renewables. After the nuclear reactors were shut down, energy self-sufficiency fell to a mere 4%. Through nationwide efforts Japan managed to achieve an energy saving rate of 10%, but energy needs have continued to grow.

In 2011, Japan faced its first annual merchandise trade deficit (excluding freight costs) since 1963. Between 2011 and 2013, increased energy imports contributed 10 trillion yen or 55% of the trade deficit. The weak yen has made this more unfavorable. Japan is now the world’s largest LNG importer, second largest coal importer, and third largest net oil importer.

Coal is the cheapest alternative to nuclear power, and LNG is the next best. While geothermal power is a comparatively cheaper renewable source, other renewable power generation can cost double or even triple the cost of nuclear power. The generation cost for solar power can in fact be over four times that for nuclear power. In 2012, the ‘feed in tariff’ system was introduced to encourage the development of renewable sources. Under the system, utilities were required to buy power generated by renewable sources at the rate of 42 JPY per kwh for solar energy, 23 per kwh for wind power and 30-35 JPY per kwh for small scale hydropower, with the rates applying for 10 to 20 years, and the public paying the additional cost. Under the system solar power generation soared while geothermal and wind power generation increased very moderately.

In 2010, Japan had ambitions to cut CO2 emissions from 1990 levels by 25% by 2020. So far, CO2 emissions have decreased 6% from 1990 levels. Now Japan’s goals are modest: the aim is to cut emissions from 2005 levels by 3.8% by 2020.

With most Japanese still opposed to the use of nuclear power, Prime Minister Abe’s LDP government took a politically tough stance and announced plans to restart all reactors. Just last week, the Governor of the Kagoshima prefecture approved the first reactor restart. Choosing the Satsumasendai plant as the first to restart was a politically favorable move. It is located in a remote, poor region and will generate jobs and subsidies from the government. However a poll conducted by Kyodo News shows that 60% of the nation is against the restart. Some also say the Satsumasendai plant is at risk from a nearby volcano.

Should Japan restart nuclear power? While nuclear power can address many of the economic woes, safety concerns should not be ignored. Even if Japan decides to turn nuclear power back on fully, it is said that only about half of the reactors can be turned on. In five years, 12 of the reactors will become 40 years old, and this is the determined operational age limit. Four of the reactors are just six miles from Fukushima. It is estimated that it will cost over $12 billion to upgrade the remaining reactors. Developing renewable power is initially an expensive proposition, but renewables and cheaper LNG sources will be crucial in addressing energy security in the long run.

Sources:

The Economist. (2014, August 2). Restarting Nuclear Power is Unpopular but Crucial for Shinzo Abe. Retrieved November 2014, from: http://www.economist.com/news/asia/21610329-restarting-nuclear-plants-unpopular-crucial-shinzo-abe-flicking-switch

The Economist. (2012 January 14). After half a century of trade surpluses Japan is now in deficit. Retrieved November 2014 from: http://www.economist.com/node/21542794

Chubu Electric Power. (n.d.). Nuclear power generation as one of a variety of power sources. Retrieved October 2014, from The Hamaoka Nuclear Power Station, Chubu Electric Power: http://hamaoka.chuden.jp/english/n-power/n-power.html

Ingraham, C. (2014, March 11). Japan’s energy dilemma, in one chart. Retrieved October 2014, from The Washington Post: http://www.washingtonpost.com/blogs/wonkblog/wp/2014/03/11/japans-energy-dilemma-in-one-chart/

Humber, Y. (2014, September 18). Nuclear Power-less Japan Must Pay for Fuel Imports in Weak Yen. Retrieved October 2014, from Business Week: http://www.businessweek.com/articles/2014-09-18/nuclear-power-less-japan-must-pay-for-fuel-imports-in-weak-yen

Nakanishi, H. (2014, June 2). Japan’s Energy Situation and Policy. Retrieved October 2014, from Agency for Natural Resources and Energy, METI: http://www.pl.emb-japan.go.jp/keizai/documents/E0_2%20METI%20Nakanishi.pdf

RT News (2014, September 23). What’s Your Anti-Disaster Plan? Thousands Protest Japanese Nuclear Revival. Retrieved November 2014, from: http://rt.com/news/190068-japan-nuclear-energy-protest/

Webster J. (2014, September 11). Japan’s Energy Revolution. Retrieved November 2014 from the Economist Intelligence Unit: http://www.economistinsights.com/energy/opinion/japan%E2%80%99s-energy-revolution

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