GIS Dossiers aim to give our subscribers a quick overview of key topics, regions or major disruptions based on a selection of our experts’ reports since 2011. This survey describes how the trauma of Japan’s 2011 nuclear power plant disaster has led one of the world’s most developed industrial nations to recast its energy system
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On March 11, 2011, a magnitude 9 earthquake struck the east coast of Japan, about 400 kilometers (250 miles) northeast of Tokyo, triggering a huge tsunami that brought havoc on land and claimed the lives of more than 22,000 people. The Fukushima Daiichi Nuclear Power plant in Okuma, Fukushima Prefecture, was flooded and suffered catastrophic damage. Disabled cooling systems led to meltdowns in three of the plant’s six nuclear reactors, hydrogen-air explosions and the release of radioactive materials into the environment.
The disaster shook Japan to its core. The crisis was handled poorly by the country’s establishment and revealed a cozy relationship between the regulators, the bureaucrats in the Ministry of Economy, Trade and Industry (METI), and the monopolistic energy sector. As a result, the so-called “nuclear village” – a network of pronuclear politicians, bureaucrats, industry executives, academics and journalists – lost the Japanese public’s trust. The country, practically devoid of fossil fuels, began groping for a way to end its half a century of heavy reliance on nuclear power. Today, the “nuclear village” is history, as is Japan’s previous energy mix. Tokyo-based GIS Expert Dr. Stefan Lippert covered the key aspects of this transformation from the start.
Five years later, in 2016, Dr. Lippert summed up the process he had witnessed:
The current reform in the energy sector shows that it takes a calamity, a sudden disaster which also affects the Tokyo-based elite, to shake the powers that be out of their complacency. Like the Meiji Restoration in the 19th century, the revolution in the power sector has been triggered by an external event, but it is being carried out internally by the ruling elite with quiet, calm determination.
Japan’s energy sources
- It lacks significant domestic reserves of fossil fuels and imports substantial amounts of crude oil, natural gas and coal
- It consumes 6% of global energy supplies
- Its first nuclear power plant in Tokai was built in the early 1960s, generating power from 1966 until it was decommissioned in 1998
- Its first nuclear plant with an output of more than 1,000 MW of electricity went on the grid in 1977
- Up until March 2011, it had 54 active nuclear power reactors, generating almost a third of its electricity
For months following the meltdowns at the Fukushima Daiichi plant, Japan’s public and political figures had little idea on what the country’s energy strategy should be in the new circumstances. In his first report on the matter, published in GIS on July 15, 2011, Dr. Lippert pointed out that only one year earlier, Japan’s strategic goal had been to increase the proportion of electricity obtained from nuclear power to 50 percent. As many as 14 projects for new reactors had been under consideration.
Four months after the disaster, the government was alarmed by a process that amounted to a spontaneous denuclearization of the country’s power industry: local politicians, responding to the upset citizens’ expectations, were refusing to grant the permits the energy suppliers needed to restart reactors that had been shut for scheduled maintenance. “If they keep pursuing this line of policy, there may not be any Japanese nuclear power plants on the grid by 2012,” the expert accurately predicted.
Government’s first responses
Six months after the catastrophe, though, Dr. Lippert reported that the worst had been avoided and Japan was “back in business.” The country had made it through the hot summer without suffering blackouts. The energy-saving measures taken by households, companies and public institutions proved astoundingly effective.
The government of Japan’s new Prime Minister Yoshihiko Noda (in office since September 2, 2011), set out to work on a new energy strategy. In less than 20 years, 10 percent of Japan’s electricity was to be coming from alternative sources. The nuclear industry’s oversight system was to be revamped.
There was considerable enthusiasm among the public that renewables were the most obvious fix
The alternative energy sector, Dr. Lippert continued, particularly photovoltaics using solar power, was set to experience rapid growth. The first bill establishing feed-in tariffs for solar, wind and geothermal electricity meant to encourage investment in these technologies, was passed in August 2011. (The tariffs were slightly modified in 2012 but have remained generous.)
Green fix hopes
As the nuclear power system was gradually being shut down, there was considerable enthusiasm among the public and parts of the government that renewables were the most obvious fix to the quandary that Japan had found itself in. “Japan is on the cusp of completely revising its energy policy,” was how the GIS expert described the public mood in the fall of 2011 in the first of his series of reports on Japan’s renewable energy potential. Dr. Lippert’s follow-up report on wind energy is here.
The Japanese Ministry of the Environment, a strong proponent of the energy revolution, published studies that claimed that the economically exploitable potential of alternative sources of energy was “around 887 gigawatts (GW).” That was nearly four times the total capacity installed at the time for fossil-fuel and nuclear power, which was 240 GW. Theoretically, this would be enough to power not only Japan but also the rest of East Asia, Dr. Lippert pointed out.
“[T]his is utterly unrealistic from both a technological and political point of view,” the GIS expert commented on the ministry’s data. However, “it does suggest that Japan has the opportunity, over the long term, to drastically reduce its dependence on imports” of hydrocarbon products, he noted.
‘Culturally driven indecisiveness’
While Japan’s economy seemed to be on the mend from the previous year’s crisis, Dr. Lippert wrote in January 2012, the country was yet to decide what to do about its nuclear industry. Only 10 of Japan’s 54 reactors remained operational at that point, but all would be switched off for routine maintenance by the middle of 2013. The country could be free of nuclear power, the expert noted, “but more because of culturally driven indecisiveness” than a planned exit strategy.
Municipal-level officials were not allowing the post-maintenance restarts of nuclear reactors. Bureaucrats within the Ministry of the Environment, the author explained, were pushing for the development of alternative energy sources. By contrast, the Ministry of Economics adopted a pronuclear line – “a position only supported by a small minority of citizens since the Fukushima disaster,” Dr. Lippert signaled.
The country was resorting to stopgap solutions such as gas combustion. It became the world’s largest importer of liquefied natural gas (LNG). Gas, coal and oil power stations were running at full stretch. There was no cheering as the nuclear power stations switched off, but there was no discussion about the significant rise in CO2 emissions either. Dr. Lippert gave this explanation:
A basic Japanese principle of organization applies here: if there is no consensus, then it is better not to act. That means the reactors will remain switched off, at least for the time being.
By March of 2012, the disaster’s first anniversary, only two of Japan’s reactors, corresponding to 4 percent of the available nuclear capacity, remained on the grid, the GIS expert wrote. Japan continued down the same path. No decision on the future of nuclear power had been made, no dismantling of the reactors was discussed by politicians or in the media. The cost of removing the facility in Fukushima alone was (optimistically) estimated at around $40 billion. Disassembling all of Japan’s reactors would place a huge financial strain on the already highly indebted country. Public opinion in Japan had turned anti-nuclear though, which tied the government’s hands.
Cautious steps to restart
By May 2012, Japan’s energy sector was, for the first time in 40 years, nuclear-free, noted the GIS expert. The government, however, pressured by the electric power companies, large industrial firms and nuclear-oriented bureaucrats, took its first, cautious steps to restart carefully selected reactors (at the Oi plant in Fukui Prefecture), pointing out the need to ensure stable power supply in the Kansai region during the summer. These attempts met stiff opposition from local politicians, including Osaka’s radical mayor.
TEPCO believed it could carry on enjoying the privileges of being one of the world’s largest energy suppliers
In the spring of 2012, Dr. Lippert delivered a five-part series covering all the critical aspects of Japan’s energy predicament and opportunities: the first response to the crisis; the truth about the Fukushima disaster; the nuclear safety lessons; the regulatory failings; and the positive heroes of the drama.
Bailout and nationalization
After the Fukushima disaster, Dr. Lippert wrote, the owners of the Daiichi plant, TEPCO, believed it could carry on, as usual, enjoying the privileges of being one of the world’s largest energy suppliers and the comforts of one of Japan’s regional monopolies. But when the scale of TEPCO’s culpability in the disaster became known and the costs realized, the once proud company had no other option than to accept a government bailout, and subsequent nationalization.
By the summer of 2012, another aspect of the situation started coming to the fore of discussion in Japan, wrote Dr. Lippert for GIS: the country had become the world’s largest consumer of liquefied natural gas (LNG) because it needed to replace the electricity-generating capacity lost from nuclear power. The cost of the change was devastating: the Japanese were paying between $17-18 for a million British Thermal Units (BTU), or roughly eight times more than their U.S. competitors were paying for gas at home (some $2/BTU).
In 2011 alone, Japan imported some 83 million tons of this expensive fuel at the cost of $66 billion – a 20 percent increase over the previous year.
Return of the Jedi
On July 1, 2012, the first two reactors (at the Oi nuclear power facility on Japan’s west coast), went back online, reported Dr. Lippert in his GIS report. But Japan was not about to return to the old ways of the “nuclear village,” the author insisted. He made this right-on-target prediction:
It is likely that Japan will continue to muddle through when it comes to nuclear power. Some plants will be reactivated under the new regulatory environment. For now, a clear decision on a total nuclear power pullout is not on the cards.
Through the rest of 2012, the strategic indecision continued: when a new long-term energy strategy was finally hammered out, with stretch goals for renewables’ growth, the government seemingly leaned toward a nuclear-free future, recounted the GIS expert. It budged soon, however, under pressure from the business lobby alarmed about the loss of competitiveness due to high renewable energy prices. The environment ministry, on the other hand, wanted to boost the nation’s power generation capacity from such sources by a factor of six until 2030, completely replacing nuclear energy production.
Enter new prime minister
Shinzo Abe was elected on December 16, 2012, and postponed a fundamental decision on Japan’s energy strategy for 10 years, “apparently speculating that the Fukushima nuclear disaster of 2011 will be forgotten over time,” wrote Dr. Lippert in his first 2013 report. The composition of Japan’s political scene virtually assured that the country’s energy policy would remain ambiguous for years to come, he pointed out. The renewable energy sector was flourishing, though, especially solar power, despite the new government’s evident pronuclear stance.
The “nuclear village” experienced a morality boost when Mitsubishi Corporation and the French builder of nuclear reactors Areva (today Orano) landed a deal to build a nuclear plant in Turkey.
Under Mr. Abe’s government, the nuclear power industry in Japan still faced uncertain times. In this report, from June 2013, Dr. Lippert described the demanding technical criteria that utility companies had to meet even to hope to get more of their reactors online. The cozy relationship between the industry, regulators and politicians remained a thing of the past under the new prime minister. In August 2013, the GIS author described the political fallout of another bad piece of news from the Fukushima Daiichi plant: that radioactive tritium had been seeping from it into the Pacific Ocean and the operator had tried to conceal that information.
By May 2014, the full dimensions of Japan’s energy-strategy dilemma, including its security and economic competitiveness aspects, were visible. GIS Expert Dr. Frank Umbach discussed them in this comprehensive report. He wrote:
From the perspective of most Japanese energy experts in governments, ministries, industries, and academia, the importance of nuclear power in Japan’s energy mix has never been really questioned. … Japan can never, in their view, realistically hope to come close to the Kyoto agreement targets and decrease its high dependence on politically unstable fossil fuel imports without nuclear power.
Japan’s precarious energy position
- Japan was the third-largest economy in the world, its fourth-largest energy consumer, the third largest oil consumer and importer, the second largest coal importer, and the world’s largest LNG importer before the Fukushima nuclear catastrophe
- Japan was only 16% energy self-sufficient at the beginning of 2011. It had one of the highest energy security risk indexes of developed countries before the Fukushima disaster, despite its high energy efficiency standards, considered the best in the world
- Japan was forced to import 30,000 barrels a day more in 2011 and another estimated 80,000 barrels a day more in 2012 to compensate for the loss of almost all nuclear power. The cost of imported fossil fuels rose from 1% of Japan’s GDP in 1998 to nearly 5% just months after Fukushima.
Strategy at last
In April 2014, Japan produced its highly anticipated fourth Strategic Energy Plan, which put nuclear power back on the agenda, albeit at a reduced level. Nuclear, Dr. Lippert reported, was expected to become a baseload energy source – that is, one which operates continuously. The plan also included an emphasis on renewables/clean energies, as well as diversification, advanced technology and independence. A third pillar of the strategy was to be the move toward a “hydrogen society,” a concept strongly pushed by influential industrial players such as Toyota that held patents related to hydrogen or fuel cells.
Japan had become an experimental area for breakthrough technologies such as floating solar plants and wind turbines, GIS Expert Dr. Lippert wrote in the summer of 2015.
However, the expert emphasized, Japan’s energy strategy was not centered on such technologies. The government, Dr. Lippert explained, had to take into consideration how quickly and how steeply the cost of renewable generation was likely to decline in the decades to come, as the economies of scale kicked in. Offshore wind power, with its bulky and expensive hardware, was the biggest loser under this criterion. Photovoltaic “farms,” floating and inland, fared much better. The shift from wind to solar was pronounced.
Secondly, the uncertainty about nuclear power had diminished. Under the plan, nuclear power would account for 20-22 percent of the energy mix. That was the first quantitative definition of “baseload power” to which the government of Prime Minister Shinzo Abe had been alluding to since 2013.
Dr. Lippert cautioned that such a high goal for nuclear power was unrealistic due to an insurmountable set of political, economic and technical obstacles.
On August 15, 2015, four years after the Fukushima Daiichi accident and two years after the last operating reactor was shut down, Japan ended the nuclear-free era. The No. 1 reactor of the Sendai nuclear power station in Kagoshima Prefecture, on the rugged west coast of the island of Kyushu, was restarted. Dr. Lippert described the event as Prime Minister Abe’s political test. The public was wary but took it well enough for the government to proceed with other restarts.
Abe’s power revolution
In November, Dr. Lippert described the dramatic, two-track change coming to Japan’s electricity market in this way:
On the one hand, the recent restart of two nuclear reactors signals the government’s commitment to well-connected, entrenched interests. On the other, a push to liberalize the energy sector will break these interests’ long-held grip on the country’s generation and distribution businesses. On both counts, Prime Minister Shinzo Abe implemented plans that were shrewdly calculated to help his Liberal Democratic Party (LDP) maintain its hold on power through the 2018 elections.
The government’s revolution comprises three fundamental steps: first, the establishment of a regulatory authority for the national electricity supply; secondly, the abolition of regional monopolies; and thirdly, the separation of power generation and distribution as well as the full liberalization of retail electricity rates, by 2020.
In a follow-up report in March 2016, Dr. Lippert suggested that Japan provided a “fascinating case study” in a substantial change in a country so deeply set in its ways that it was often perceived as “stuck in its old ways.” The expert wrote:
During the complete shutdown of Japan’s … nuclear reactors (from 2012 through 2015), the administrative control of the nuclear-power sector became the province of the newly created Nuclear Regulation Authority (NRA), which operates under the Ministry of the Environment. It has been staffed with survivors from the previous regulatory system, yet almost all experts agree: the NRA really has teeth and does its job remarkably well.
Consensus in 2016
Japan’s nuclear sector appeared to be on the way to silently vanishing. Prime Minister Abe had overturned the policy of a mandatory phaseout of nuclear energy, the expert explained, but kept the rule that limited the operations of reactors to 40 years. The law allowed a one-time extension of up to 20 years on the condition that a reactor receives a clean bill of safety from the NRA. The government made clear that such extensions should be “the rarest of exceptions.”
As for renewables, the 2011/2012 introduction of generous feed-in tariffs for electricity from these sources had helped to make Japan the world’s second-largest market for new solar installations. (The costly to install wind power lagged significantly behind.) There was a problem, however, pointed out the GIS expert.
For an island nation such as Japan, the limitations of a stand-alone power system are not going to disappear
Even the fanciest “smart” grid infrastructure cannot solve the so-called intermittency problem of solar and wind energy, Dr. Lippert wrote. There are times when neither sunshine nor wind is available, and Japan is not part of any broader Asian grid which could provide power during such periods. For an island nation such as Japan, the limitations of a stand-alone power system can only be eased by new technologies but are not going to disappear in the foreseeable future.
Eight years after Fukushima
On July 3, 2018, the Japanese government unveiled a revised version of its Strategic Energy Plan (SEP) of 2014. The plan’s newest iteration takes into account new parameters that affect the country’s energy position. Also, the Paris Agreement on limiting greenhouse gas emissions, in effect since 2016, has required Tokyo to look beyond 2030, all the way to 2050. GIS Expert Urs Schoettli listed four main issues that the revised 2018 SEP focuses on:
- security and geopolitics
- the role of nuclear power in the aftermath of Fukushima
- the changing patterns of energy production and energy consumption
- the transparency and citizen friendliness of energy policies
Tokyo has been watching with a wary eye the activities of many emerging powers, such as China and India, that have strived to secure exclusive access to energy sources beyond their borders. Japan’s modified SEP endorses the government’s active engagement in similar resource diplomacy.
Japan’s traditional focus on the efficient use of energy by consumers, private as well as corporate, is not going away. Also, the country remains committed to the environmental objectives expressed in the Paris Agreement and wants to reduce its reliance on energy that has to be sourced in politically unstable regions.
With these goals stated clearly, the SEP of 2018 envisages a more pronounced role for nuclear power than is currently the case. “No government in which the currently ruling LDP will have a say will even consider the prospect of a total replacement of nuclear power,” wrote Mr. Schoettli. While the plan mentions renewable energy sources, such as hydro, wind, solar and geothermal power, it does not foresee a decisive enhancement of the role these energy sources will play in the coming three decades, emphasized the expert.