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information about Fukushima published in English in Japanese media info publiée en anglais dans la presse japonaise

All ready to start again

Japan returns to nuclear power

http://blogs.ft.com/nick-butler/2015/06/22/japan-returns-to-nuclear-power/?

 

Nick Butler

| Jun 22 05:30 | 3 comments | Share

 

Within the next few weeks the Japanese utility Kyushu Electric Power will restart its two nuclear power reactors at Sendai in the Kagoshima prefecture in the far south of the country. Fuel loading is set to begin July and the plants should be onstream again in August. After four years of crisis and much legal and political debate, the Japanese nuclear industry is finally on the way back. The implications for the rest of the energy sector in Asia and across the world are significant.

The two reactors at Sendai have been closed since 2011. From a nuclear fleet of 50 reactors capable of producing some 47 GW of electricity and supplying over 30 per cent of Japan’s daily electricity needs at the beginning of 2011, the sector’s output shrank to zero in the months following the Fukushima disaster. At Fukushima itself six reactors have been closed and are being decommissioned. The rest of Japan’s nuclear fleet stands cold and unused. Gradually, however, the negative mood of 2011 has abated. Now the operators of 24 different reactors across the country have applied for permission to reopen with the full and very active co-operation of the Japanese state and the powerful industrial lobbies such as the Kaidanren and the Keizai Doyukai.

Public opinion in Japan is divided about nuclear power but the Democratic Party of Japan (DPJ ) which campaigned for the phasing out of all nuclear activity, lost power at the 2012 elections and has been unable to recapture the surge of support it enjoyed in the immediate aftermath of Fukushima.

The DPJ’s plans to transform Japan’s energy mix were dropped when the government of Shinzo Abe came to power. The policy of the current administration focuses on a gradual restoration of nuclear’s share in Japan’s energy mix . The process is slow and painful. Each plant still faces challenges to demonstrate conformity with new standards. In some cases there is local opposition but the chances are that up to 10 nuclear plants will be operational again within 18 months. There are even plans for the construction of new nuclear stations, most of which are reported to have strong local support. As the industry never fails to point out no one died at Fukushima and the story can be written as one of an industry responding to the challenge of a natural disaster completely beyond its control.

The record of the last four years has demonstrated once again the ability of the Japanese government to command the key players in the national economy when necessary. It is hard to imagine such a process working in the same way in the US or in Europe.

The first step was the imposition of a dramatic programme of energy conservation measures. Electricity demand fell by 12 per cent — and peak demand by 18 per cent. A comparable programme applied across the EU would reduce consumption by as much as 300 terawatt hours a year.

The remaining gap in Japanese energy needs has been filled by expensive gas and by coal. In both fuels Japanese demand has sustained the global market and kept prices up. As nuclear returns the impact will be painful, especially for gas. For the last few years gas prices have included an Asian premium because of increased demand from Japan. In recent months, however, gas prices have begun to fall as the coming shift back to nuclear is factored in. As a paper by Peter Hughes and Daniel Muthmann for the recent Pacific Energy Summit in Beijing demonstrates, the regional premium is disappearing and gas is becoming a single global commodity market with LNG spot prices in Asia and Europe converging.

Worldwide, the demand for traded gas is weak. As the new BP Statistical Review confirmed last week, gas demand in Europe fell by more than 11 per cent in 2014 as it was pushed out of the fuel mix by the combination of subsidised renewables and cheap coal. US demand is fully satisfied by local supplies. Japanese gas demand was 112bn cubic metres last year and could easily fall by 10 per cent a year for the next three years. Once the first nuclear stations such as Sendai are back onstream the pace of recovery could be quite rapid.

The trend will hit the coal market as well. Japanese coal imports grew after Fukushima and the Japanese government was forced to abandon their 2020 emissions reduction target. Now, however, Mr Abe’s government is keen to get back to something close to the original targets within the next decade, and that means that coal use will be strictly limited.

The irony is that over time Fukushima may be seen as having done more damage to the nuclear sector outside Japan than to the industry within the country. It is Germany not Japan that has abandoned nuclear. Many other countries have found that the added costs of protecting nuclear stations from the sort of extreme weather conditions that destroyed Fukushima are prohibitive. New safety regulations have certainly contributed to the problems of Areva and EDF as they struggle to build new capacity in Finland, France and the UK.

In Japan, however, faith in civil nuclear power remains strong. The country imported more than 80 per cent of its energy needs in 2014 — an uncomfortably high figure. Nuclear is regarded as an indigenous source of supply that can limit this dependence. The Japanese economy retains a strong industrial sector which sees nuclear as a low-cost source of supply. Most important of all, despite the fact that the local utility Tepco made every possible mistake in handling the Fukushima disaster, the accident has not been blamed on the nuclear sector as such. Nuclear reactor businesses including Toshiba and Hitachi retain a very high reputation and remain attractive suppliers worldwide. In contrast to the panic in Germany, Japan has methodically adjusted to what has happened and has absorbed the costs of ever tighter regulation. By 2020 it would not be surprising to see Japan back as one of the most nuclear dependent economies in the world.

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