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Arguments for nuclear power losing credibility,as Japan’s utilities jostle for funding

In the Wake of Fukushima: Japan’s Nuclear Energy Policy Impasse  60% of Japan’s 48 viable nuclear reactors,are not as yet being considered for application to the Nuclear Regulation Agency (NRA) for restart By Andrew Dewit Global Research, April 07, 2014
Asia-Pacific Journal

“…….Hard-Pressed Utilities

As for the utilities themselves, Tepco is not viable in its current form, having lost a stunning 81.2% of its market capitalization between March 10 of 2011 and April 2 of 2014. It was nationalized in June 2012 via a YEN 1 trillion injection of public capital, “the biggest state intervention into a private non-bank asset since America’s 2009 bail-out of General Motors (Economist, 2012). Resolving pressing matters such as the Fukushima and area clean-up and compensation, the decomissioning of ruined assets and the like are well beyond Tepco’s means. Some specialists question whether the other nuclear-dependent utilities are viable as well (Kaneko, 2013), and in early April of 2014 Kyushu Electric and Hokkaido Electric were revealed to be in discussion with the public sector Development Bank of Japan for bailouts (Financial Times, April 2, 2014). Kyushu Electric’s reliance on nuclear power is 42% of generating assets and Hokkaido Electric’s reliance is 30%. Their respective losses of market capitalization are 38.9% and 58.2%.11

The Japanese public sector has thus long been in a powerful position vis-à-vis the utilities, enabling it to press for reform. But this authority was used sparingly by the central government, even under the previous Democratic Party administration. The Tepco bailout was notable for protracted negotiations between Tepco and its politico-bureaucratic allies and state officials. They were not bargaining about weighty matters such as ownership of the power grid, but rather salaries and the size of increases on rate-payers. Outsiders regarded it as “bewildering” to see such minor items on the table. The Financial Times’ Jonathan Soble, also a close follower of Japan’s post-Fukushima power crisis and politics, argued that it “underscored the depth and resilience of Tepco’s resilience, and that of the ‘nuclear village’ of utility executives, bureaucrats and lawmakers that built Japan’s atomic power industry.“12

But now Tepco’s siblings are lining up for bailout, and this seems unlikely to end. Like big utilities in Europe and North America, Japanese utilities face the existential challenge of the ICT, renewable and efficiency-driven “electricity revolution” summarized nicely by Brookings energy security specialists Charles Ebinger and John Banks.13 A recent very detailed article in Scientific American shows how America’s 3000-plus utilities are fighting a losing battle against solar power and smart grids.14 Centralized power and monopolized conventional-grid ownership are confronting a far larger tsunami than the mobile phone shock to land-line telephony. But Japan’s monopolized and nuclear-reliant utilities have the added conundrum of nuclear power’s delegitimation in a very seismically sensitive country.

After Fukushima, the Japanese public debate received a very accelerated course of instruction on how various political economies were responding to the risks of resource price increases as well as climate change and the opportunities of developing new industries in renewable energy and related fields. The public debate also became apprised of just how far behind Japan was in its deployment of energy alternatives such as solar and wind. Moreover, the old arguments that these forms of power generation were not suited to Japan, because of “unique” winds and lack of space, lost their credibility.

The Push for Local Resilience

In addition, local governments exhibit increasing efforts to seize opportunity in the emergence of alternatives to highly centralized and concentrated nuclear power. Centralized power, such as Tepco’s nuclear reactors, led to concentrated economic benefits for a few communities whereas the risks of accident were distributed among a much broader range of communities. Fukushima Prefecture’s post-3-11 commitment to 100% renewable energy by 2040 encouraged other prefectures and cities, including Tokyo, Kyoto, and Osaka, to adopt ambitious targets.15

Moreover, at the end of 2013, Japan’s 16 trillion yen power market featured 192 independent power producers, including such new entrants as Toyota. That number was 79 at the end of 2012, and there has thus been a 240% increase in the number of firms.16 Japan’s “feed in tariff” policy support for diffusing renewables, effective from July of 2012, saw over four gigawatts (roughly four large nuclear reactors worth) of new renewable capacity deployed in the initial year. Japanese domestic shipments of solar cells and modules during July-September of 2013 leapt to 2.075 gigawatts, over triple the 627 megawatt level of a year earlier.17 The Pew Research April 3, 2014 publication of “Who’s Winning the Clean Energy Race? 2013” argues that China remains the leader, at USD 54.2 billion, but that “Japan experienced the fastest investment growth in the world, increasing 80 percent, to almost $29 billion.”18

Since Japan’s public debate on energy is so polarized between Team Abe and the majority, it seems useful to examine which of the two idealized options – nuclear or green – offers the better return. Table 1 is an aid to this objective by its highlighting of the profoundly skewed energy R&D priorities of all the IEA countries. Over two-thirds of the 1980 peak in energy R&D expenditures by all IEA members was devoted to nuclear fission and fossil fuels. By contrast, only 12.3% was invested in renewables and only 6.4% in efficiency. Yet according to the IEA Energy Efficiency Market Report of 2013, global energy efficiency investment in 2011 was worth roughly USD 300 billion, “a similar scale to renewable energy and fossil fuel power investments.”19 Directly comparative data on nuclear power investments appear not to be available. But Mycle Schneider, and Antony Froggatt’s authoritative “The World Nuclear Industry Status Report 2013” reveals that the 2013 global total of 427 reactors with an installed capacity of 364 GWe was considerably lower than the 2010 peak of 444 reactors with an installed capacity of 375 GWe.20………… http://www.globalresearch.ca/in-the-wake-of-fukushima-japans-energy-policy-impasse/5376899?utm_source=rss&utm_medium=rss&utm_campaign=in-the-wake-of-fukushima-japans-energy-policy-impasse

April 8, 2014 Posted by Christina Macpherson | business and costs, Japan | Leave a comment