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Japan’s Energy Dilemma

Rajaram Panda was Senior Fellow at the Institute for Defence Studies and Analyses, New Delhi. Click here for profile
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  • March 24, 2011

    Japan is devoid of domestic energy resources and depends on imports for the bulk of its energy needs. The scramble for oil and resources was, in fact, a principal driver for the Japanese military’s expansionist policy in the early part of the 20th century. In the post-World War II period, Japan’s sense of vulnerability heightened every time political disturbances occurred in the Persian Gulf region, its principal source of energy supply. Japan consequently focused on nuclear power. Its first commercial nuclear power reactors were built in the 1970s in cooperation with General Electrics and Westinghouse. Since then, Japan has made substantial advances in reactor designs and manufacturing. 54 nuclear power plants were in operation before the quake- and tsunami-induced Fukushima accidents. With 54 nuclear power plants, Japan has the largest commercial nuclear power programme in Asia. These contribute about a third of its energy needs. In contrast, South Korea has 21 plants, India 22, China 13, Taiwan 6, and Pakistan 2. The US has the largest number of nuclear power plants in the world at 104. As of 2010, China had 20 new nuclear power plants under construction, South Korea 6, India 5 and Taiwan 2. Japan, Pakistan and the US are planning to build one plant each.

    Even while Japan is grappling with the Fukushima accidents, opinion is emerging in Japan about giving up the dependence on nuclear energy in future. But this does not seem to be a viable option because as much as a quarter of the country’s energy consumption is catered for by nuclear power plants. If Japan were to abandon nuclear power and attempt to meet its demands with oil, its oil imports will increase by about 62 million metric tones per year, or about 1.2 million barrels a day. This will disrupt the world oil market and have cascading effects on oil prices. Calculated at the current rate of $100 a barrel, Japan will have to spend an additional $46 billion per year. In addition, it will also have to spend tens of billions of dollars for about a decade to build new oil, coal or natural gas-fired power plants to meet its electricity needs. Thus, the switch to oil is not a feasible one.

    Japan is only 16 per cent energy-sufficient. It is the third largest oil consumer in the world, behind the US and China, and the third largest net importer of crude oil. Japan is already the world’s largest importer of liquefied natural gas (LNG) and coal. Since Japan lacks sufficient domestic hydrocarbon resources, Japanese companies have actively pursued participation in upstream oil and natural gas projects around the world. The share of oil in Japan’s total energy consumption was 80 per cent in the 1970s, but declined to 46 per cent in 2009 because of the strategy of diversifying to alternative energy sources.

    In the wake of the Fukushima accidents, Japan may be compelled to revisit its policy on developing and maintaining the existing nuclear reactors with adequate safeguards. The older nuclear plants may have to be decommissioned and those located at vulnerable sites strengthened in terms of improving their safety. How Japan addresses this issue is itself a challenge as the whole country is earthquake prone and coastal sites are preferred locations for building nuclear power plants because they discharge large quantities of heat which the ocean can absorb. For example, if nuclear power plants were to be built near rivers or lakes, not only will the water contained in them be inadequate but the eco-system may also get affected.

    Japan is a pioneer in protecting the global environment and was one of the first countries to switch to LNG at a time when cheap coal was available. It was the first in the world to take the initiative to facilitate the signing of the United National Protocol in Kyoto and pursued a policy of reducing emissions of greenhouse gases. In view of its commitment to contribute to preventing climate change, Japan’s energy strategy has remained focused on reducing dependence on oil and coal as sources of energy and instead preferring nuclear power and LNG as alternative sources. Japan is a major exporter of energy-sector capital equipment. Its energy research and development programme is supported by the government. This is in line with its policy of pursuing energy efficiency measures domestically, and thus meet the country’s energy security while at the same reducing carbondioxide emissions. This strategy seems to have suffered a setback because of the nuclear accident in Fukushima.

    From now, gaining public support for additional nuclear power plants is likely to be a tall order. Japan may therefore shift its emphasis to the greater use of LNG and renewable sources of energy like solar and hydro power. Though it is too early to expect a complete abandonment of nuclear energy as a source of meeting the nation’s power requirements, there may be compelling reasons for the political leadership to place extra emphasis on other risk-free energy sources.