Japan Exercising the Nuclear Option, Again

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Researched by Industrial Info Resources (Sugar Land, Texas)--This week, Japanese Prime Minister Yoshihiko Noda kept his word to restart two of the country's nuclear reactors. He told his country last week that it had to restart the two Oi reactors on the Sea of Japan, or face possible power shortages and blackouts when demand increased this summer. After last year's tsunami caused the biggest nuclear reactor accident since Chernobyl, Japan took all 50 of its nuclear power plants off line. In spite of the continuing evolution of new safety rules post-Fukushima, the Japanese public is reluctantly starting to accept the resumption of nuclear power, which could start as early as this weekend.

In the year since the disaster, public opinion has been firmly against nuclear power, with more than 70% of people saying they would prefer Japan to move away from using nuclear power altogether. Interestingly, more than half of the same population pragmatically accepts the resumption of nuclear power as a short term measure to avoid power shortages this summer.

Before Fukushima, Japan got 30% of its power supply from nuclear power and had plans to increase that share to 50% by 2030 (the country does not have native fossil fuel alternatives available to replace nuclear in the long term). Other countries, such as Germany, have decided to reduce or eliminate nuclear power from the power generation mix and this is having an effect on power generation companies across the world, especially in Europe. One Germany's largest players RWE AG (OTC:RWEOY) (Essen, Germany) has announced that it is completely withdrawing from the nuclear power sector and other companies like RWE, E.ON and Energie Baden-Württemberg AG (EnBW) (Karlsruhe, Germany) are not only losing billions of Euros in income because of the German government's decision, but seeking compensation from the German government. For more information, see June 26, 2012, article - RWE Quits Nuclear Power.

The Japanese government just submitted three possible long-term plans for balancing the demands of power generation and the political pressure of the general public's new anti-nuclear stance. The attached table shows the share of power production each plan allots to different fuel types and the current levels of each.

In order for any of the three plans to work, Japan has to cut its electricity demand from 1.1 trillion kilowatt-hours (kWh) to 1 trillion between now and 2030. "All of the three options are compliant to the goals we now have: lower reliance on nuclear power, lower reliance on fossil fuels and lower carbon dioxide emissions," said Motohisa Furukawa, National Strategy Minister.

These plans are now up for public debate. The Japanese government is allowing public comment through email, letters and hearings and will conduct an opinion poll in August. Early indications are that a compromise will be sought. Government adviser and energy expert Hiroshi Takahashi says Japan will probably reduce the nuclear share of the energy mix from 30% to 15% over the next 20 years.

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