Japanese Government Shooting Itself in the Foot on Nuclear Restarts

The way the Noda administration is going about restarting Japan’s idled nuclear reactors does nobody any favours – not themselves, not the Japanese public, not domestic electric power companies (EPCOs), not the nuclear industry worldwide, and most certainly not the environment. [Links with JP are in Japanese and EN in English]

In February 2011, one month before the triple calamity that struck Japan on 11th of March, 49 GW of installed nuclear generation capacity produced 23 TWh of power, i.e. 31% of all of the country’s electricity. The 2010 revision of the government’s Basic Energy Plan (JP) envisioned adding 14 new reactors by 2030, but it strains anybody’s imagination to imagine how these plans could be politically accomplished in the wake of the multiple meltdowns at Tokyo Electric Power’s (TEPCO) Fukushima Daiichi power plant.

The short-term effects were immediately visible during the summer of 2011. 24.8 GW of generation capacity (of which 12.4 GW nuclear) were knocked offline by the earthquake and the tsunami, forcing the Ministry of Economy, Trade and Industry (METI) to issue an administrative order to large-scale consumers to cut their peak consumption by 15% (JP). Japan managed to squeak past black-outs last year, yet the problem has metastasised: Nuclear reactors in Japan have to undergo periodical safety checks during which they are taken offline, yet previously pliable local communities, shocked by the displacement of nuclear refugees from the areas surrounding Fukushima Daiichi, have since the accident refused to allow the restart of any reactor.

As I am writing, only one (Tomari, in Hokkaidō – 912 MW) of Japan’s 54 reactors is online, and it is supposed to go offline on May 5. It is starting to dawn on the Japanese public that the lights are still on even without the unpopular (even prior to the earthquake) nuclear reactors – despite the decades-long recitations from EPCOs and policy makers about these plants’ indispensability. This development has set stakeholders in the power sector aflutter to restart these hugely expensive reactors before the need to keep the electricity flowing by any other means burns a hole in their pockets.

However, the long history of allegations of poor governance involving power companies and their regulators has meant that the restart was always going to be an uphill struggle for EPCOs and METI. It is important to stress that these claims are not just anecdotal evidence gathered from dark mutterings from jaded outsider conspiracy theorists without a real grasp of the practical restrictions of energy policy, but documented instances of attempts to manipulate public opinion, marginalise the need for further safety measures and cover up actual safety breeches. The restart of the Genkai reactor  (EN), the tsunami wall at Fukushima Daiichi (EN) and the sodium leak at Monju (EN), respectively, come all too easily to mind for those even marginally aware of the topic. Thus, although they must have been aware how rife with distrust the Japanese discussion on nuclear power is, in at least three areas people who should have known better have egregiously failed to smoothly regain the public’s trust.

First, when a consensus crystallised that regulatory failure had created safety lapses that made the Fukushima accident the world’s second worst nuclear disaster ever, a reform of Japan’s Nuclear and Industrial Safety Agency was announced (EN), separating it from METI, who explicitly promotes the expansion of nuclear power. The new agency has not been created yet, but already the government’s proposal to create a new body under the Ministry of Environment has been dismissed as an empty legal artifice. It is not clear what would prevent regulatory capture from re-occurring and no authority has been granted to the Minister of Environment to take speedy and forceful measures in the case of Fukushima-like emergencies, such as calling on the Self-Defence forces for assistance (JP). The public would likely need a lot more convincing to believe that real reform has taken place here.

Second, the attempts to restart the idled reactors have been extremely poorly managed. In the wake of Fukushima the evacuation radius in the case of a meltdown has been expanded to 30 km (hat-tip: Michael Cucek (EN). This has created a public relations disaster in the case of Kansai EPCO’s reactors at Ōi, which the government tried to clear for restarting this April. Townships across three prefectures lying within the new radius, with a combined population of more than 130,000 people, did not fail to notice that the safety standards used to give the reactors the go-ahead, found by METI minister Edano Yukio to be “broadly applicable” (JP), are nothing more than operational performance checks (JP). In fact, in the hurry to restart the idled reactor fleet, earthquake-related safety regulations have not been revised (EN), even though new “stress tests” had been promised already during the summer of 2011 (EN), under the Kan administration. Consequently, the townships are now trying to butt their way into the approval process, with the stated goal to withhold restart permits. It is nothing short of stunning that Japanese advocates of nuclear power, frenziedly trying to sweet-talk the public with their commitment to raise safety standards to the highest level in the world, should fail to realize that the said public might double-check whether it was getting what it was being promised.

Third, a number of leaks have come forth pointing out the skewedness of scenarios calling for an increase of nuclear power and speedily restarts are demonstrably skewed. Thus, Chief Cabinet Secretary Fujimura Osamu quoted on February 20 METI projections showing that the summer of 2012 would see a 9.2% shortage. Yet those projections entirely ignore the use of consumption adjustment contracts commonly agreed upon between utilities and large-scale consumers and set scheduled inspections for large thermal plants in the middle of the summertime demand peak – not to mention completely ignore 7.5 GW of already installed renewable capacity. Independent calculations by the Fujitsu Research Institute show that correcting for this yields a 6% surplus (JP). Similar calculations from regional EPCOs (hat-tip: Paul Midford) inflate demand and completely ignore the role of independent power producers.

It is no surprise that the public is leery of buying into the discourse calling for bringing nuclear back.  An Asahi public opinion poll from April 14-15 (JP) shows that 55% of Japanese oppose a restart at Ōi, 70% do not have faith in the current nuclear safety standards, 66% do not believe supply-and-demand projections, 83% support the approval of all townships in a 30 km radius for the restart of a plant, and 73% believe that Japan ought to wean itself from nuclear power – and 61% believe that the Noda administration is not pursuing that course.

While the media gives extensive coverage to the groundswell against nuclear, it is interesting how little there is to read, even beyond Japan’s five largest broadsheets, about how the eight other EPCOs with nuclear reactors see their own future after internalising TEPCO’s misfortune. After all, words fail us when it comes to describing the kind of trouble that TEPCO is in. Not only does the company have to produce electricity by burning more expensive fossil fuels (more on that below), but it has to pay for the indemnities of those displaced by radioactive fall-out, for the clean-up of the polluted sites, and for the dismantling four reactors under conditions never before experienced anywhere in the world (JP). Few envisage scenarios where all of this could be paid for without passing it all on to taxpayers, and talk of nationalisation, asset stripping and forceful unbundling an everyday occurrence in the media. Given this calamity, the serenity with which other EPCOs push for a continued expansion of the Japanese nuclear sector, with figures of 30-35% of electricity from nuclear sources by 2030 routinely bandied about in committee hearings, boggles the mind – and it would be nice to know just what makes them so confident that they could shoulder a potential future accident of comparable scale.

Of course, this is most likely just a negotiating ploy. The Atomic Energy Commission of the Cabinet has since March 29 started drafting three scenarios for 2030, with 20% as a compromise position between the extremes of 0% and 35%. 20% was also mentioned as a likely maximum figure on April 12 in MOE’s Committee on Post-2012 Policies and Measures on Global Warming. But how the public is to be convinced of the need for even this is conspicuously absent from the discussion. And, as fervent believer in the role of renewable energy in mitigating climate change as I may personally be, I cannot stress enough the need to restart non-superannuated reactors – even in the case of a freeze on further nuclear expansion, yet also only on the condition of substantive and forceful regulatory reform.

This is because in order to keep the lights on EPCOs have been resorting to the only possible short-term solution possible: fossil fuels. Japan imported in Q4 of 2011 114.3% more crude oil than in Q1 (EN). With an energy crunch ahead, the Foreign Minister paid a visit to the Gulf states (EN) and energy companies position themselves for easier procurement of coal (JP) and LNG (EN). The developments are on an impressive scale. Japan now has its first trade deficit since 1980 (EN), with Credit Suisse economists positing that energy imports explain “roughly half of the deterioration of the trade balance from Q4 2010 through Q4 2011” (hat-tip: Paul Scalise). These expenditures have driven TEPCO and 7 further utilities into the red (EN), with regulators scampering to redraft the methodology for tariff calculation to allow power companies to pass on the extra fuel costs onto consumers (JP).

One cannot help but wonder just what exactly it was that kept Japanese decision-makers from drafting better legislation, revising safety regulations and producing more careful projections in the face of an angry public, ballooning fuel costs and rising emissions. This neglect extends even to the management of the discussion. It is very odd for instance that, for a country where newspapers have such a close relationship to the government and the bureaucracy, the discussion has been allowed to drift in a direction treating nuclear power with such broad brushstrokes. Fukushima Daiichi had been tainted by a long history of mishaps even before last year’s catastrophe, but newer reactors feature safer designs reflecting decades of technological progress. Yet little of this technical fact percolates to the surface through the visceral public discussion. Even more strangely, it seems to have occurred to nobody to raise the question of what to do with the reactors should it somehow be decided to decommission them all. A nuclear reactor is not just a piece of landscape, but needs to be dismantled – at cost! How is paying for taking apart viable power plants that do not emit CO₂ smart policy?!

Sadly for Japanese energy policy, the Noda administration, and indeed the entire political scene, seems to be otherwise engaged. Indeed, the biggest politics story since December 2011 has been the string of escalating desertions rocking the government coalition – all explicitly linked to the questions related to fiscal policy. The government has promised to produce a new Basic Energy Plan by the summer of 2012, but the public’s reaction to the cavalier manner in which nuclear restarts have been addressed so far suggests that the policy landscape is going to be more difficult to navigate than previously imagined. The next couple of months promise to be very turbulent.