Pressure on Japan’s Government to Revamp Country's Energy Mix

Slow nuclear restart and lukewarm reception for electricity deregulation is forcing an energy mix rethink

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Slow Nuclear Restart and Lukewarm Reception for Electricity Deregulation Is Forcing an Energy Mix Rethink
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Following the 2011 Fukushima Daiichi nuclear plant accident, the Japanese government drafted a plan for a new energy mix starting in 2013. The aim was to: improve the country’s energy security by supporting renewable and nuclear energy; lower costs by utilizing cheaper coal-fired power generation; and reduce CO2 emissions by leveraging renewables and optimizing efficient coal-fired and LNG powered generation. 

At the same time, the government has also been pushing ahead with liberalizing the energy market. It deregulated the electricity retail market last April; the gas market will follow suit this year. Unbundling of electric generation, transmission, and distribution is due to take place in 2020.

Yet, three years after the new energy plan was published, so little is working out as hoped; the government is expected to produce a revamped plan this year.

Ten months after deregulation of the electricity market last April, prices have hardly been altered, and only 3 percent of customers have changed suppliers. This despite the Big Ten power providers now having a free hand to compete in each other’s formerly protected regions, and despite hundreds of new competitors entering the market from various sectors such as telecommunications and the oil and gas industries.

As detailed in the Japanese press, reasons for the paucity of interest in changing suppliers include little difference in pricing, poorly defined benefits, and procedures that have proven off-putting 

At the same time, most of the 3 percent that have changed providers reside in the Tokyo and Osaka regions, by far the country’s most populated areas. The new power providers have also targeted these areas, meaning that customers residing outside the two megacities have few or no opportunities to choose a new provider, even if they were so inclined.

When it comes to nuclear power, the government had aimed for it to provide between 20 and 22 percent of the country’s energy mix by 2030. The government hoped to, at the same time, gradually ease back on this controversial energy source by decommissioning older reactors. Before the Daiichi accident, nuclear power accounted for about 29 percent of the country’s energy mix. But in the aftermath of the 2011 tsunami having devastated Fukushima Daiichi and the surrounding countryside, all 48 of the remaining reactors were closed down as a safety precaution.

Given the strong anti-nuclear attitude many Japanese now harbor following the Daiichi accident, 20-22 percent seemed overly optimistic in 2013. Today, it appears out of reach.

After Japan’s Nuclear Regulation Authority drew up a new set of safety standards following the accident—which it claims are the most stringent in the world—only five reactors have managed to obtain licenses to restart operations. Of these, just three are in operation, with the other two being stalled by court injunctions brought by local governments or citizens groups because of safety concerns. Similar injunctions are sure to follow as the power companies attempt to restart more reactors. 

“So, there are many difficulties in reaching the 20-22 percent figure,” says Professor Takeo Kikkawa of Tokyo University of Science Graduate School of Innovative Studies, who spoke to the press on 8 February. 

“On top of those issues, current Japanese law says that after 40 years of operation, reactors are to be decommissioned,” he said. This means 24 reactors, including the four at Fukushima Daiichi, would have to be decommissioned by 2030. So, even if all the remaining reactors seeking licenses to operate were successful in going back online, nuclear power would still only account for 15 percent of Japan’s energy mix, said Kikkawa. 

And should the government seek to extend the life of the reactors to 60 years, it would be breaking its public pledge to “decrease reliance on nuclear as much as possible,” he pointed out.

Because of all these issues, the government has no choice but to produce a new energy mix. 

Kikkawa, who was a member of the advisory committee the government relied on to come up with its 2013 energy plan, has put forward a new energy mix solution he believes can be achieved by 2030: nuclear 15 percent, renewables 30 percent, fossil fuels 40 percent, cogeneration 15 percent.

Yet given the apparent lack of answers to the many issues that exist today, even such a revamped plan may have to be revised yet again three years from now.

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