Since the earthquake and subsequent tsunami that caused the catastrophic meltdown of the Fukushima Daiichi nuclear power plant in March 2011, Japan’s nuclear energy capacity has faced an uncertain future. The government has faced a significant cleaning up operation in the wake of the worst nuclear accident since Chernobyl. But their troubles do not stop there, as the costs of shutting down Japan’s 48 reactor plants for safety checks and inspections begin to mount up. Japan has been nuclear-free since September 2013.
The operators of these idled plants have been forced to spend approximately $87bn on burning fossil fuels to make up for the energy shortfall, driving costs higher. As a result, they have seen $60bn wiped from their combined stock values, and the nine publicly traded nuclear operators together lost an estimated sum in the region of $50billion in the two business years since Fukushima. The ramifications of these gargantuan losses have been keenly felt. Kyushu Electric Power Co has sought a $1bn bailout from the government, alongside Hokkaido Electric Power Co which is also seeking financial backing to get them out of their difficulties.
Nuclear power however remains unpopular with the general public after the disaster at the Fukushima plant, and the struggles of Tokyo Electric Power Co in trying to deal with it. 69% of respondents to a poll in the Tokyo Shimbun said they felt that nuclear power should be entirely phased out and an Asahi newspaper poll last month found that nearly 80 percent of those surveyed supported a gradual exit from atomic power.
Regardless of these concerns, the Japanese Cabinet approved an energy policy that reverses the previous government’s plans to gradually decommission the country’s 48 nuclear power plants, which are currently idling pending rigorous safety inspections.
The country is seeking to move away from over-reliance on nuclear power (before the Fukushima disaster, nuclear power accounted for nearly one third of Japan’s electricity) but is adamant that once reactors can be verified as being safe, they will be restarted. The new energy policy seeks to increase the amount of clean energy used by Japan ahead of old targets, but also names coal as being an important pillar of Japan’s energy strategy. That said, it was also stated that while coal is economical, with a steady and stable supply, the large amounts of greenhouse gases it emits are a concern. Thus there are also plans to push through technological developments that will be aimed at drastically reducing these emissions through efficiency gains.
But returning to the question of nuclear power once again, a Reuters analysis suggested that of the 48 currently idled reactors, 17 are unlikely to be restarted, and as many as 34 may have to be mothballed due to the high costs of necessary safety upgrades, seismic risks or general local opposition. Therefore, if these figures are to be believed, the major Japanese utility firms face major decommissioning costs if their plants do not pass the strict new safety standards when they are eventually inspected.
The new energy plan defines nuclear power as “an important base-load power source” but the overall role of nuclear power in the Japanese energy mix was not defined. There is a commitment to go beyond existing targets for renewable energy usage, but no concrete numbers were given. What is clear is that Prime Minister Shinzo Abe is enacting a policy that is likely to prove unpopular in order to secure the ailing atomic industry. But it may still be too late to save the ailing atomic industry in Japan, with Mycle Schneider, a Paris-based independent energy consultant saying: “I think it is unavoidable that the Japanese utilities will write off most of their nuclear 'assets' and move on.”
Japan faces major difficulties with regards to its energy requirements in the post-Fukushima landscape, with gargantuan costs faced by the major energy companies, as well as the burden placed on the government and other creditors as these companies desperately try to stay solvent. While the re-activation of several plants is likely to alleviate these problems somewhat, it is clear that many will never be turned on again. Japan needs to reduce its dependency on nuclear power, a move that is supported by the general public, but it also needs to ensure that it can guarantee a stable energy supply going forward, and attempt to mitigate the huge losses already caused by the “nuclear problem” so far. The latest energy policy seeks to strike a balance between these aims, but it remains to be seen whether they will be successful.