The need for a resilient energy policy in Japan

By Charles D. Ferguson | March 16, 2011

While the disaster continues to unfold in Japan, it is not too early to learn lessons for Japan’s future energy policy. One immediate lesson is that Japan may be taking too great of a risk by having a relatively large portion of electricity generated by nuclear power. As of March 16, four reactors at the Fukushima Nuclear Power Plant have suffered significant damage. The March 11 earthquake and tsunami forced the shutdown of about 12 gigawatts of electricity generating capacity. In comparison, Japan’s nuclear power fleet has a capacity of 49 gigawatts; thus, about one-fourth of Japan’s nuclear generation was knocked out by the natural disaster. While most of that nuclear power will be brought back online eventually, the four damaged reactors at Fukushima Daiichi are still a major loss. Before the disaster, nuclear energy provided almost 30 percent of Japan’s electricity.

Also before the disaster, Tokyo had plans for even greater use of nuclear power. In particular, it wanted to increase the share of nuclear-generated electricity to 40 percent in 2017 and up to 50 percent in 2030. Japanese leaders should reconsider having nuclear power play such a major role.

Nuclear power plants, however, have generally been a wise investment for Japan because of the country’s lack of indigenous sources of fossil fuels. The 1973 Arab oil embargo, in particular, shocked Japan’s leadership into moving away from heavy reliance on oil for electricity generation. In 1974, Japan generated 66 percent of its electricity by burning oil. Today, oil accounts for about 10 percent of Japan’s electricity, and this use is primarily to provide power when peak demand exceeds the capacity of base-load generators that are providing the minimum constant demand.

But despite concerns about energy insecurity, Japan still relies heavily on fossil fuels for electricity production. In addition to oil providing 10 percent, coal contributes 28 percent, and natural gas supplies 26 percent according to the latest 2009 data from the US Energy Information Administration. In 2002, Japan stopped domestic coal mining. In 1969, Japan became the first country to import liquefied natural gas, and today it is the world’s largest importer. Although Japan still has domestic natural gas resources, these provide only about 5 percent of total usage. Recognizing the essential role of liquefied natural gas, Japan has more than 40 terminals to receive this energy source — far exceeding the current demand. The natural disaster damaged the major terminal at Sendai; otherwise, Japan continues to have a robust infrastructure for importing this energy source. Thus, the near-term consequence of the disaster is that Japan will rely more on natural gas to meet its electricity needs.

But burning natural gas emits carbon dioxide, a greenhouse gas. Tokyo has been a world leader in pushing for greater use of very low carbon emission sources. Burning natural gas emits about half of the carbon dioxide as compared to burning coal; but if natural gas were to displace nuclear power, this would increase Japan’s greenhouse gas emissions, which nuclear reactors do not emit.

Thus, if Tokyo wants to remain an outstanding example for combating climate change, it should launch a two-part strategy. First, it should not phase out nuclear power plants.  But it should not have too great of proportional electricity generation from nuclear power. Aiming for not more than one-third of electricity from nuclear power appears to be a wise goal. All new nuclear plants need to meet the highest standards for safety and natural disaster protection. In fact, the plants now under construction have improved safety features as compared to the Fukushima Daiichi plant. The Japanese regulatory agency may need to order safety retrofits on many existing plants and may also need to order the shutdown of some older generation plants like the Fukushima Daiichi-type plants that do not have adequate safety systems. This determination will have to result from a thorough investigation of the disaster and the nuclear accident.

Second, Tokyo should promote greater use of renewable energy sources to reduce the significant dependency on fossil fuels. According to a 2010 report by the Japan Renewable Energy Policy Platform, an association of several renewable energy organizations, Japan could generate up to two-thirds of electricity from renewable sources by 2050. In recent years, hydropower has generated about 8 percent of Japan’s electricity, and solar, wind, and geothermal have provided roughly 2 percent. Because non-hydro sources are intermittent, Japan will need to invest in energy storage systems to make a far larger use of these sources.

But Japan’s leadership has failed to enact effective policies for greater use of renewable energies. In particular, the renewable portfolio standard has been set too low so that the current low-level use has easily met the most recently passed standard. Lobbyists from large power utilities have opposed more ambitious renewable energy goals. Ten large utilities have monopoly control over Japan’s major electricity-usage regions. Collectively, these utilities produce more than 85 percent of Japan’s electricity. They have substantial influence at the local and national governmental levels.

Although it will be extremely hard to do because of Japan’s dysfunctional political system, which has gone through five prime ministers in as many years, Japanese leaders should exert — for the good of their country — the courage and political power needed to form a more effective energy policy that is more resilient to natural disasters and that is not unduly influenced by monopolies. With a combination of safer nuclear plants and much greater use of renewable energy, Japan will significantly reduce its dependence on foreign fossil fuels and will serve as a global leader in shifting toward a sustainable pathway with renewable sources.

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