Japan's Energy Future Could Survive Without Nuclear

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Researched by Industrial Info Resources East Asia (Kofu-shi, Japan)--When Japan began reviewing greenhouse gas reductions, the government set a goal to reduce emissions by at least 50% by 2050. Despite having the highest electricity consumption in the world, Japan is slow to add electrical capacity due to low demand growth. Power demand increases at an average of 0.7% per year, and will continue to do so through to 2018. An aging population coupled with a lack of energy demand in the future has allowed Japan to transition slowly into cleaner energy with little pressure. To aid the country in achieving its 2050 emissions goal, Japan had planned to incorporate the wide-scale use of nuclear energy, boosting nuclear's share to 50% by 2030.

Last week, Prime Minister Naoto Kan announced that Japan would overhaul its energy strategy and possibly reduce the prevalence of nuclear power in the long term. There are 54 active nuclear reactors employed throughout Japan. Combined, these have a total capacity of 48 gigawatts (GW), however only 19 are currently online. Of the remaining 35, which represent approximately 31 GW, 11 are offline due to the Great East Japan Earthquake that occurred on March 25, while the others are undergoing scheduled maintenance. Between 10 and 15 reactors are offline at any given time due to scheduled maintenance.

There are 24 pressurized water reactors, 26 boiling water reactors, and four advanced boiling water reactors. Approximately one-third were built in the 1970s and another third in the 1980s, while the remainder was built throughout the 1990s and 2000s. The 2000s saw a slowdown in commissions, and there are currently only two new units under construction. Another 12 reactors were in the planning stages, however two, planned as Fukushima Daiichi expansions, have been cancelled all together due to the nuclear crisis and three others have been placed on hold for the same reason. Citing earthquake and tsunami instability, the government ordered that Hamaoka nuclear power station, owned and operated by Chubu Electric Power Company Incorporated (TYO:9502) (Chuden) (Nagoya, Japan), be suspended indefinitely. Chuden complied with the order on May 12 and began shutdown procedures for the station.

As nuclear capacity is revised down, renewable energy will become more prevalent. Currently Japan has almost 3 GW in total installed solar power capacity, and the government has set forth definitive solar power targets, stating that 28 GW must be installed by 2020. By 2050, solar power is supposed to account for 10% of total domestic energy production, but it has the potential to generate approximately 100 GW if innovation, subsidies, and feed-in tariffs are applied in the right measures. Wind power, if the maximum potential of both onshore and offshore development is harnessed, could produce up to 1,900 GW.

Other renewables, such as geothermal and hydroelectric power, as well as biomass and alternative fuels, also have a better chance for development following last week's announcement. The use of clean energy would allow Japan to forego the use of both nuclear and thermal energy, while meeting its 2050 goals. Industrial Info is currently following the development of 52 projects in Japan that are geared toward clean energy and represent more than $5 billion of investments.

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