Despite being the only country to have suffered the devastating effects of nuclear weapons in wartime, with over 100,000 deaths, Japan embraced the peaceful use of nuclear technology to provide a substantial portion of its electricity. However, following the tsunami which killed 19,000 people and which triggered the Fukushima nuclear accident (which killed no-one), public sentiment shifted markedly so that there were widespread public protests calling for nuclear power to be abandoned. The balance between this populist sentiment and the continuation of reliable and affordable electricity supplies is being worked out politically.

Japan’s energy situation and international dependence

Japan’s shortage of minerals and energy was a powerful influence on its politics and history in the 20th century. Today it depends on imports for over 90% of its primary energy needs. As it recovered from World War II and rapidly expanded its industrial base it was dependent on fossil fuel imports, particularly oil from the Middle East (oil fuelled 66% of the electricity in 1974). This geographical and commodity vulnerability became critical due to the oil shock in 1973. At this time, Japan already had a growing nuclear industry, with five operating reactors. Re-evaluation of domestic energy policy resulted in diversification and in particular, a major nuclear construction program. A high priority was given to reducing the country’s dependence on oil imports. A closed fuel cycle was adopted to gain maximum benefit from imported uranium.

Nuclear power has been expected to play an even bigger role in Japan’s future. In the context of the Ministry of Economy, Trade and Industry (METI) Cool Earth 50 energy innovative technology plan in 2008, the Japan Atomic Energy Agency (JAEA) modelled a 54% reduction in CO2 emissions (from 2000 levels) by 2050 leading on to a 90% reduction by 2100. This would lead to nuclear energy contributing about 60% of primary energy in 2100 (compared with 10% in 2008), 10% from renewables (from 5%) and 30% fossil fuels (from 85%). This would mean that nuclear contributed 51% of the emission reduction: 38% from power generation and 13% from hydrogen production and process heat.

In June 2010 METI resolved to increase energy self-sufficiency to 70% by 2030, for both energy security and CO2 emission reduction. It envisaged deepening strategic relationships with energy-producing countries. Nuclear power would play a big part in implementing the plan, and new reactors would be required as well as achieving 90% capacity factor across all plants.

However, following the Fukushima accident, in October 2011 the government sought to greatly reduce the role of nuclear power. This appears to have been a significant factor in them losing office in 2012 elections (see later section). The new government in 2014 adopted the 4th Basic (or Strategic) Energy Plan, with 20-year perspective and declaring that nuclear energy is a key base-load power source and would continue to be utilized safely to achieve stable and affordable energy supply and to combat global warming.

Earlier in 2011, nuclear energy had accounted for almost 30% of the country’s total electricity production (29% in 2009), from 47.5 GWe of capacity (net) to March 2011, and 44.6 GWe (net) from then. There were plans to increase this to 41% by 2017, and 50% by 2030.

In April 2015 the government announced that it wanted base-load sources to return to providing 60% of the power by 2030, with about one-third of this being nuclear. Analysis by the Research Institute of Innovative Technology for the Earth estimated that energy costs would then be reduced by JPY 2.4 trillion (USD 20.0 billion) per year compared with the present 40% base-load scenario (renewables being 30%). At the same time, it was reported that 43 coal-fired power projects were planned or under construction, totalling 21.2 GWe and expected to emit 127 million tonnes of CO2 per year. As well as the coal power revival with 20% increased consumption, Japan’s LNG imports increased from about $20 billion in 2010 to $70 billion in 2013.

According to a 2011 government report, generation costs per kWh were JPY 9 for nuclear, JPY 10 for wind and JPY 30 for solar. In 2014 the estimates were nuclear JPY 10.1, coal JPY 12.3, LNG JPY 13.7, solar (non residential) JPY 24.3.

The electricity market was deregulated in April 2016 at the distribution level, and the Revised Electricity Business Act 2015 requires legal separation by April 2020 of generation from transmission and distribution. As the first step towards this, the Organization for Cross-Regional Coordination of Transmission Operators (OCCTO) was set up in April 2015 to function as a national transmission system operator (TSO). All power companies are required to join OCCTO. It will ensure greater interconnection among present utility networks, and increase the frequency converter capacity across the 50-60 Hz east-west divide to 3 GWe by 2021. OCCTO is expected to invest about JPY 300 billion.

In February 2015 the prime minister said that 80% of Japan’s oil and 20% of its natural gas came from the Persian Gulf through the Strait of Hormuz.

Post-Fukushima energy policy changes

In July 2011 an Energy & Environment Council (Enecan or EEC) was set up by the Democratic Party of Japan (DPJ) cabinet office as part of the National Policy Unit to recommend on Japan’s energy future to 2050.* It was chaired by the Minister for National Policy to focus on future dependence on nuclear power. Its initial review was to recommend that nuclear power’s contribution to electricity be targeted at 0%, 15%, or 20-25% for the medium term – a 36% option was dropped.

The Atomic Energy Commission (JAEC) and Central Environment Council apparently came under Enecan in 2011, and in 2012 were restored to previous status.

Meanwhile major Japanese companies such as Mitsui and Mitsubishi started investing heavily in LNG production capacity from Australia and elsewhere eg a 15% stake in Woodside’s Browse LNG project for $2 billion. METI estimated that power generation costs would rise by over JPY 3 trillion ($37 billion) per year, an equivalent of about 0.7 percent of gross domestic product, if utilities replaced nuclear energy with thermal power generation. In February 2012 METI’s minister said that electricity costs would need to increase up to 15% while the nuclear plants remained shut.

Meanwhile, costs of nuclear power relative to alternatives were published. The Institute of Energy Economics of Japan in 2011 put the cost of nuclear electricity generation at ¥8.5 per kWh taking into account compensation of up to ¥10 trillion ($130 billion) for loss or damage from a nuclear accident. Later in the year a draft report for Enecan estimated nuclear generation costs for 2010 to be ¥8.9 per kWh (11.4 US cents). This included capital costs (¥2.5), operation and maintenance costs (¥3.1), and fuel cycle costs (¥1.4). In addition, the estimate included ¥0.2 for additional post-Fukushima safety measures, ¥1.1 in policy expenses and ¥0.5 for dealing with future nuclear risks. The ¥0.5 for future nuclear risks is a minimum: the cost would increase by ¥0.1 for each additional ¥1 trillion ($13 billion) of damage. The ¥8.9 figure was calculated based on a model nuclear power plant using average figures from four plants operating over the period since the 2004 estimate, with an output of 1200 MWe and construction costs of ¥420 billion ($5.4 billion). Costs were calculated assuming a discount rate of 3%, a capacity factor of 70% and a 40-year operating life. The 2010 costs for fossil fuel generation, including costs for CO2 measures, ranged from ¥9.5 for coal through to ¥10.7 for LNG to ¥36.0 for oil. Projecting forward to 2030 the nuclear cost remains stable but fossil fuels costs increase significantly.

In July 2012 feed-in tariffs (FiTs) were introduced for solar and wind power. The solar FiT was ¥42/kWh (41 cents US) for ten years, which was reduced in April 2013 to ¥38 for small systems, and to be reduced again in April 2014 to ¥37/kWh residential and ¥32/kWh for systems over 10 kW. The wind FiT in 2012 was ¥23.1/kWh for units above 20 kW, and ¥57.75 for smaller units (of which none had been approved).

Enecan’s “Innovative Energy and Environment Strategy” was released in September 2012, recommending a phase-out of nuclear power by 2040. Reprocessing of used fuel would continue. Enecan promised a “green energy policy framework” is promised by the end of 2012, focused on burning imported gas (LNG) and coal, along with expanded use of intermittent renewables. This provoked a strong and wide reaction from industry, with a consensus that 20-25% nuclear was necessary to avoid very severe economic effects, not to mention high domestic electricity prices. In the past year increased fossil fuel imports had been a major contributor to Japan’s record trade deficit of JPY 2.5 trillion ($31.78 billion) in the first half of 2012. The Keidanren (Japan Business Federation) said the Enecan phase-out policy was irresponsible, as did the leadership of the Liberal Democratic Party (LDP).

Four days after indicating general approval of the Enecan plan, the DPJ cabinet backed away from it, relegating it as “a reference document” and the prime minister explained that flexibility was important in considering energy policy. The timeline was dropped. Reprocessing used nuclear fuel would continue and there would be no impediment to continuing construction of two nuclear plants – Shimane 3 and Ohma 1. A new Basic Energy Plan would be decided after further deliberation and consultation, especially with municipalities hosting nuclear plants.

However, at the end of 2012 the new Liberal Democratic Party (LDP) government promptly abolished Enecan, along with the National Policy Institute, so that METI’s Advisory Committee for National Resources and Energy became responsible for formulating energy plans, while MoE’s Central Environment Council focused on climate change matters. The new LDP prime minister ordered a ‘zero-based’ review of energy policies.

In December 2012, after a decisive victory in national elections for the Diet’s lower house, with 294 out of 480 seats, the LDP took a more positive view of restarting idled nuclear power plants than its predecessor, which had seemed indifferent to electricity shortages and massive LNG and other fossil fuel import costs. (The DPJ won only 57 seats, down from 267)  The new government said it would take responsibility for allowing reactor restarts after the Nuclear Regulation Authority issued new safety standards and confirmed the safety of individual units. After abolishing Enecan it also said that abandoning reprocessing of used fuel was ruled out. Construction of Shimane 3 and Ohma 1 was to continue, and the construction of up to 12 further units could be approved.

In July 2013, elections for the Diet’s upper house gave the LDP 115 seats out of 242. Its coalition partner and another pro-nuclear party won 29 seats. This consolidated the LDP position and role in reviving the economy, including restoring power supplies. The DPJ with its policy of abandoning nuclear power by 2040 won only 59 seats. The LDP won a seat in every constituency with a nuclear power plant. In Fukushima prefecture the LDP candidate polled more than twice as many votes as the DPJ candidate. In Fukui prefecture, where Kansai Electric Power Co. has 11 units, Japan Atomic Power Co. has two units, and the government had the Monju prototype breeder reactor, an LDP candidate beat the DPJ contender, 237,000 votes to 56,000.

In February 2014 METI presented the proposed new 4th Basic (or Strategic) Energy Plan with a 20-year perspective to government, which adopted it in April. It said that nuclear energy is a key base-load power source and would continue to be used safely to achieve stable and affordable energy supply and to combat global warming. Two other base-load options – hydro and geothermal – are limited, another is coal, and though cheap, its pollution works against emissions goals and represents a geopolitical risk. Natural gas/LNG was designated as intermediate between low-cost base-load and peaking oil, and capable of complementing the intermittency of renewables. Renewables were given the most space and will be “accelerated to full introduction” though without targets: solar is seen as useful to supply power during peak demand; large-scale deployment of wind could produce significant power, but this would come from northern areas and would require balancing with as-yet undeveloped storage systems. Nuclear power is presented as a quasi-domestic source that gives stable power at low operational cost and with low greenhouse gas profile. Nuclear power is an “important power source that supports the stability of the energy supply and demand structure,” it said, though the degree of dependence on it should be reduced. Used fuel will receive more attention, and the nuclear fuel cycle will be promoted, including R&D on fast reactors.

Later, in October 2014, at least seven of the ten major utilities limited the access of renewable energy to their grids due to potential overloads. The government addressed the problem by reducing the 2012 high fixed-price feed-in tariffs (FITs).

In January 2015 the Institute of Energy Economics, Japan (IEEJ) released a report looking at four electricity scenarios in 2030 and their implications, for about 1150 TWh (less than 10% up on 2013). They ranged from zero nuclear up to 30% nuclear contribution, with power costs for zero being 42% higher than the 30% nuclear scenario (21.0 vs 14.8 JPY/kWh), and GDP being JPY 10 trillion less. The other metric of obvious significance is energy self-sufficiency, only 7% in 2013, and ranging from 19% in zero-nuclear scenario to 28% in the 30% nuclear one (considering nuclear as quasi-indigenous, as it has been). LNG imports in the zero nuclear scenario are almost as high as in 2013, but reduce 20% from 2013 level in the 30% nuclear one. Reliance on renewables is 35% in zero-nuclear but only 20% in high-nuclear scenario, compared with 13.5% in 2013.

In June 2015 the government’s Plan for Electricity Generation to 2030 was approved. This had nuclear at 20-22% in 2030, renewables 22-24%, LNG 27% and coal 26%. It aims to reduce CO2 emissions by 21.9% by 2030 from the 2013 level, and to improve the energy self-sufficiency rate to 24.3%, from 6.3% in 2012.

In July 2015 the government approved the FY2014 Energy White paper (to March 2015). It showed that the percentage of power from fossil fuel had risen from 62% to 88% over four years, and the increased fuel cost due to nuclear shutdowns was JPY 2.3 trillion in FY2011, JPY 3.1 trillion in FY2012 and JPY 3.6 trillion in FY2013 (to March 2014). Household energy expenses had increased by an average of 13.7% over the four years.

In July 2017 the cabinet approved the draft Basic Concept on Nuclear Energy Use, developed over two years by JAEC, involving public consultation. It will provide a reference for future decisions about nuclear energy policy. It outlines eight priority activities in attaining the basic targets for using nuclear energy safely while promoting its benefits. JAEC’s previous policy advice was in July 2005 (see above), but it now plans to review and revise policy every five years.

The 5th Basic Energy Plan, approved in July 2018, maintains the same electricity percentages as agreed in mid-2015. It presents nuclear power as “an important base-load power source contributing to the stability of the long-term energy supply-and-demand structure,” and states that necessary measures will be taken to achieve nuclear power’s share of 20-22% in the 2030 energy mix. Towards 2050 it proposes moving to a low-carbon scenario.

Economic impact of shutdowns

JAIF has said that increased fuel imports are costing about ¥3.8 to 4.0 trillion ($40 billion) per year (METI puts total fossil fuel imports at ¥9 trillion in FY2013). The trade deficit in FY2012 was ¥6.9 trillion ($70 billion), and in 2013 ¥11.5 trillion ($112 billion), up 65% on 2012’s figure. For fiscal 2013 the trade deficit was ¥13.75 trillion ($134 billion), 70% up on FY 2012, according to the Ministry of Finance. The total trade deficit from April 2011 to end of March 2014 was thus ¥23.25 trillion ($227 billion), compared with previous surpluses of at least ¥2.5 trillion per year (¥6.6 trillion in 2010).

Generation cost was up 56% from ¥8.6/kWh to 13.5/kWh in FY 2012. Losses across the utilities are about ¥1 trillion per year. The Ministry of Economy Trade and Industry (MITI) said in April 2013 that Japanese power companies had spent an additional ¥9.2 trillion ($93 billion) to then on imported fossil fuels since the Fukushima accident. In FY 2012 the additional fuel costs to compensate for idled nuclear reactors was ¥3.6 trillion ($35.2 billion), mostly for oil and LNG. In 2013 Japan imported a record 109 million tonnes of coal, and plans to build almost 15 GWe of coal-fired generating capacity were reported.

At the end of 2013 the Japan Business Federation (Keidanren) said that “By stopping nuclear power plants, national wealth of ¥3.6 trillion ($34.9 billion) per year is flowing overseas” due to increased fossil fuel imports. The ongoing slump of trade balance into the negative could lead to deterioration of government credit and must be addressed “with a sense of crisis.” “There can be no new capital investment in domestic industry which is power-intensive.” Keidanren urged the government to recognise that economic growth depends on stable and affordable power, and nuclear needs to be part of that rather than continuing undue reliance on LNG. Also the current feed-in tariff to encourage renewables should be reviewed to reduce its burden on the economy.

In June 2014 three major business lobbies – the Japan Business Federation (Keidanren), the Japan Chamber of Commerce and Industry, and the Japan Association of Corporate Executives (Keizai Doyukai) – submitted a written proposal to the Industry Minister seeking an early restart of the nuclear reactors. “The top priority in energy policy is a quick return to inexpensive and stable supplies of electricity”, they said.

In April 2015 the Institute of Energy Economics, Japan (IEEJ) said that an important economic role of nuclear power in the past was to reduce extreme dependence on imports, and this policy had saved Japan from sending ¥33 trillion ($276 billion) overseas. “We are effectively living on these savings and we may lose about two-thirds by 2020 if we stay on this course,” due to the “drain of national wealth” caused by ¥3.6 trillion ($30 billion) being spent on imported fuel each year simply to compensate for idled reactors.

In early 2014 some 92 mostly very old oil-burning generation plants were running to full capacity, and these will be the first to shut down, due both to age and cost of running with imported oil.

In March 2017 METI announced that the new levy on household electricity bills to support feed-in tariffs for renewables would be increased to JPY 9504 (US$ 83) per year for FY2017. The national total borne by consumers would be JPY 2140 billion ($18.77 billion).

In August 2017 the IEEJ in its Economic and Energy Outlook for FY2018 said that it expected at least ten reactors to be online by March 2019, generating 65.6 TWh/yr and representing 7% of total electricity. These would contribute JPY 500 billion to GDP. In a high case scenario, 17 reactors are online then, providing 99 TWh/yr.

Public opinion

A number of public opinion polls were taken in April and May 2011 following the Fukushima accident. Those in April showed around 50% supported the use of nuclear power at present or increased levels, but as the crisis dragged on the May polls showed a reduction in support to around 40% and a growth in opinion to over 40% of those wanting to decrease it. A steady 15% or so through May- June 2011 wanted it abolished. In March 2013, the proportion opting for increase or status quo had dropped to 22%, while 53% wanted to decrease it and 20% wanted to abolish it.

A poll taken in February 2015 by the Mizuho Information & Research Institute of Japan asked whether or not the respondent would use nuclear-generated electricity if the costs were the same or less than they were that month, and 67% said “yes”. Only 32% replied in the negative. This contrasts with a number of media polls with voluntary and hence non-representative participation, and the distortion is compounded by a 2012 news media survey finding that 47 of the 50 most popular press outlets in Japan said they were antinuclear.

brief:

  • Japan needs to import about 90% of its energy requirements.
  • Its first commercial nuclear power reactor began operating in mid-1966, and nuclear energy has been a national strategic priority since 1973. This came under review following the 2011 Fukushima accident but has been confirmed.
  • Up until 2011, Japan was generating some 30% of electricity from its reactors and this was expected to increase to at least 40% by 2017. The prospect now is for two-thirds of this, from a depleted fleet.
  • Currently 42 reactors are operable. The first two restarted in August and October 2015, with a further seven having restarted since. 17 reactors are currently in the process of restart approval

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