Japan Faces Post-Fukushima Power Struggle

Crisis transforms renewable energy bill into an antinuclear symbol

On the morning of 11 March 2011, Japan's cabinet forwarded a bill to parliament (known as the Diet) that would modestly expand support for renewable energy. A few hours later, an earthquake struck northeastern Japan. The tsunami and nuclear crisis it unleashed transformed that noncontroversial piece of legislation into a vanguard of efforts to radically redraw Japan's energy policy.

"This renewable energy law is a symbol of energy policy change. It is indispensable," says Tetsunari Iida, executive director of the Tokyo-based Institute for Sustainable Energy Policies and a long-time critic of nuclear power.

The driving force behind the bill is Prime Minister Naoto Kan, whose popularity plummeted after Tokyo Electric Power Co. (TEPCO) lost control of the Fukushima Daiichi nuclear power plant and then misled the public about the danger. Since then, however, Japan's fifth prime minister in as many years has been fending off resignation calls by challenging Japan's nuclear industry. In May, Kan demanded closure of the 3.5-gigawatt Hamaoka nuclear power plant, a coastal station with limited tsunami walls, and vowed to remake Japan's energy policy with renewables as a central pillar. In late June, Kan canceled the Diet's summer break, extending the session by 70 days to push through the renewables bill (along with a compensation package for Fukushima Daiichi's neighbors and a budget bill).

Kan's initiative could be a major shift for Japan. The country's nuclear-focused Basic Energy Plan called for 14 new reactors by 2030, which would nearly double nuclear generation and make it about 50 percent of Japan's electricity supply. Last year, despite being the world's third-largest economy, the country invested just US $3.3 billion in alternative energy, placing it 11th among the G-20, according to a March 2011 ranking by the Pew Charitable Trusts.

The bill before the Diet would build on Japan's sole renewable bright spot: a recent jump in solar power driven by a feed-in tariff (FIT) law introduced in 2009. The law required utilities to pay 48 yen per kilowatt-hour ($0.59/kWh) for solar energy delivered to the grid from residential rooftops, and half that for surplus generation by businesses and schools. Thanks to the tariffs, solar installations grew by 111 percent last year.

The 2011 proposal (the "Bill on Special Measures Concerning Procurement of Renewable Energy Sourced Electricity by Electric Utilities") would add FITs for other forms of renewable generation starting from 2012, including a 20 yen FIT for wind power and a 15 yen FIT for geothermal. Regulators, meanwhile, have adjusted the solar FIT to 42 yen for homes and 40 yen for institutions. Those price premiums could inspire up to 148 GW of renewable energy by 2030, according to projections by Japan's Ministry of the Environment.

Equipment firms such as Toshiba and Mitsubishi Heavy Industries are ramping up their renewable offerings as they downgrade expectations for nuclear reactor construction. But Japan's 10 regional electric utilities are raising concerns about costs that will be passed on to consumers, and the influential Keidanren industrial federation is opposing the bill. Powerful Diet members from Kan's Democratic Party of Japan and the opposition Liberal Democratic Party, echoing industry's concerns, were blocking debate on the bill as IEEE Spectrum went to press.

Editorials by the Asahi Shimbun see self-interest behind the opposition. The popular Japanese daily wrote on 21 June that expanded FITs will "demolish the traditional assumption that electricity is produced at large power plants" and thus "shake up" the status quo in which "utilities have been monopolizing regional markets." The paper attributes opposition to the legislation to utilities' "strong influence" on Japan's political parties.

Renewables advocate Iida says the utilities are right to suspect a challenge to their monopolies. His institute projects that by 2020, renewable power and energy efficiency moves could phase out at least three-fifths of Japan's nuclear generation and reduce oil and coal-fired generation at the same time. His own plan includes 40 GW of wind turbines and 81 GW of solar panels. That's more wind power than was installed globally in 2010 and twice the photovoltaics currently operating worldwide.

Such a shift would require substantial grid upgrades. The massive fluctuating power flows of solar and wind installations would overwhelm the utilities' weakly connected regional grids, epitomized by the tiny 1.2-GW connection between TEPCO's 50-hertz grid and the 60-Hz grids to its west.

Targeted investments can fix individual bottlenecks. Iida's plan, for example, calls for up to 9 GW of new frequency converter stations to bridge Japan's frequency divide. But readying Japan for reliance on renewable energy will take a more radical overhaul than just that, says Iida. What Japan needs is the transmission structure emerging in renewables leaders like Germany: grids with robust regional interconnections, owned by independent transmission companies and operating under national rules that prioritize renewable generation.

Iida's ideas are controversial, but post-Fukushima, they are no longer unspeakable. This spring Kan even floated the idea of deregulating the power industry by splitting power generation and transmission. No wonder Japan's utilities are having a fit.