Earthquake, tsunami overturn Japan's nuclear programme

The target is to rebuild the economy as a world leader in clean, renewable energy

The decision following the devastating earthquake and tsunami in March that caused a nuclear accident at the Fukushima Daiichi plant, will scrap a plan that the Kan government released last year. The plan called for building 14 more nuclear reactors by 2030 to increase the share of nuclear power in Japan’s electricity supply to 50 per cent. Japan has 54 reactors that until the earthquake produced 30 per cent of the country’s electricity.

The scrapping of the planned nuclear plants is the second announcement by Kan of big changes in Japanese nuclear policy without the usual endless committee meetings and news media leaks that characterise Japan’s consensus-driven decision making. Kan appears to be seeking a stronger leadership role after criticism of his government’s sometimes slow and indecisive handling of the Fukushima accident.

Last week, Kan asked a utility company to suspend operations at the Hamaoka nuclear plant 195 km southwest of Tokyo, which sits atop an active earthquake fault line. After three days of delays, the company, Chubu Electric Power, finally agreed to halt the plant until a new sea wall and other measures could be taken to strengthen the plant against earthquakes and tsunamis.

Kan said Japan would retain nuclear and fossil fuels as energy sources, but he vowed to add two pillars to Japan’s energy policy: renewable energy and conservation. While Japan has been a global leader in energy conservation, it lags behind the United States and Europe in the adoption of solar, wind and other new energy sources.

“We need to start from scratch,” Kan said. “We need to make nuclear energy safer and do more to promote renewable energy.”

Kan had previously called for Japan to sell its nuclear technology to emerging nations as a new source of export income. However, the Fukushima accident has prompted a global rethinking of nuclear energy and may also drive customers away from Japanese suppliers and to rivals , like South Korean companies.

Kan also appeared to be at least pulling back from his earlier vows to remain committed to nuclear power. His apparent about-face may be driven partly by public opinion, which has soured on nuclear power since the Fukushima accident.

Rebuilding exercises

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 one per cent of Japan’s electricity. An additional 8 per cent or so comes from hydroelectric power.

“It is a battle between the future and the past,” said Tetsunari Lida, executive director of the Institute for Sustainable Energy Policies, a nonprofit policy research organisation in Tokyo.

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 the richest man in Japan, said last month that he would donate about $12 million to start a research foundation for renewable energy. Continued reliance on atomic energy, he said at a news conference, “would be a sin against our children, grandchildren and future generations.”

Those more attuned to the official government position, at least before Kan’s announcement on Tuesday, 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.

Public and local officials have become more wary about living near nuclear facilities. Already, Tokyo Electric Power has had to drop plans to build two new reactors on the site of the crippled Fukushima Daiichi plant.

So many reactors have been shut down because of the earthquake or other factors that soon only about 43 per cent of Japan’s 49 megawatts 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 relies almost entirely on imported fossil fuels, making the nation vulnerable to disruptions — for example any that might arise from unrest in West Asia. And the cost of imported fossil fuels has risen from the equivalent of one per cent of Japan’s gross domestic product in 1998 to almost 5 per cent 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 green-house 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, centralised 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 in Tokyo.

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 generate 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 per cent 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.

Renewable energy

Some regulators elsewhere are pursuing renewable energy more aggressively than Japan. California, for instance, recently set a renewable-source goal for its electric companies of 20 per cent by end of 2013 and 33 per cent 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 particularly well suited for wind power, though the environment ministry said recently that there was 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 subsidise 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.

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

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

He said renewable energy cost Tokyo Electric ¥30.5 (yen), or nearly 4 cents, per kilowatt hour, compared with ¥9.1 for power from fossil fuels and ¥6.1 for nuclear power. With nuclear plans now up in the air, 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.