On Friday, the Japanese Government approved the safety of two reactors of Oi Nuclear Plant in Fukui Prefecture. This is a significant step forward in the process of restarting the nation’s 54 reactors. Currently, all reactors, except for one in Hokkaido, have ceased to generate electricity. The last reactor is planned to stop in early May. Belonging to Kansai Electric Power Co. (Kepco), Oi Nuclear Plant has the third largest energy generation capacity after Kashiwazaki-Kariwa (Tepco) and Fukushima Daiichi (Tepco). The government’s approval will likely to cause the restarting of other reactors.
This governmental approval has stirred the public that tends toward abolishing nuclear energy altogether in spite of the caution and care taken by the current administration. Last June, the then Minister of Economy, Trade, and Industry (METI) announced the safety of all reactors that have gone through regular inspection in order to restart a few of them. Then-Prime Minister Naoto Kan intervened by disagreeing with his own minister and demanded “stress-test” for all reactors. Several months later, Kepco turned in the result of the stress test for Oi Plant. The government in turn approved the plant’s safety according to the new standard, which was recently decided on April 6.
Some have felt the government’s procedure to be too hasty. Popular Osaka Mayor Toru Hashimoto has accused the current administration of ignoring the proper procedure. He demands the safety of reactors to be approved by Nuclear Safety Commission (NSC) that belongs to the cabinet. Although Mr. Hashimoto’s demand is a wrongheaded one (because the government has actually gone through an extra step of mandating stress tests and NSC has no proper power in this matter), it probably represents the feeling of many Japanese who have been hurt deeply by the nuclear disaster in Fukushima. Taro Kono of Liberal Democratic Party (LDP), a long-time opponent of nuclear energy, has also argued that the government must wait for the report from the National Diet’s Fukushima Nuclear Accident Independent Investigation Committee. Another investigation committee that belongs to the Cabinet Secretariat turned in its interim report last December, but the final report has not yet come out.
The government wants to hurry the process of restarting the reactors because of the heightened energy demand expected for this summer. Even though Tepco’s expectation for the energy demand for 2011 turned out to be higher than its actuality by almost 10 million kWh, the situation this year is a little different. There were still 19 reactors active in July and 16 in August whereas there will be none after May 5 should no reactor restarts. Also the industries in Tohoku were largely wiped out last summer due to the earthquake, but this year is expected to see much greater economic activities. This is the main argument used by the Japanese government, especially by METI. The Institute of Energy Economics (IEE), which functions almost like an advocate of METI, has reported the expected growth of GDP without nuclear energy will be 0.1% with trade deficit of 4.7 trillion yen whereas with nuclear energy the GDP will grow by 1.9% and trade surplus by 1.7 trillion yen. Some have voiced their doubt concerning the accuracy of these numbers.
As for Kansai and Oi Nuclear Plant, Mr. Kono questions the official reports by Kepco and the Japanese government. According to the Institute for Sustainable Energy Policies (ISEP), Kepco generated 29.47million kWh last summer while the actual usage was 27.84 million kWh. For this summer, the government estimates the energy usage of 31.38 million kWh while the anticipated energy production is 24.89-25.74 million kWh. According to these numbers, there will be the energy shortage of about 5.5-6.5 million kWh. Mr. Kono suggests, however, that this number presuppose the purchase of only 0.83 million kWh of energy from non-utility generation facilities. In fact, within the area provided by Kepco, the total amount of energy generated by non-utility facilities amounts to 7 million kWh if Kepco is willing to raise the purchasing price from ¥15-20 to ¥50. Of course, it will double the current utility fee, which might be devastating for many businesses and industries.
Acknowledging the difficulty of having a cake and eating it too, Japan today needs both the peace of mind about the nuclear safety as well as sufficient energy for economic recovery from the damage of the earthquake. If the government moves too rapidly, even when it takes the proper procedure, it will lose even more popular support, which is necessary for implementing various policies for further recovery and growth. At the same time, if the people demand too emotionally and rigorously the abandonment of nuclear energy, the economic damage might slow down the process of recovery and hence endanger social stability. Here is my suggestion: Since the popular support is so necessary in the contemporary politics, the current administration should hold a general election to let the people choose the nation’s legitimate governing body that would embark on a new course regarding economic and energy policy. To regain the people’s trust and support, the new administration must implement the stronger accountability for the nuclear industry and utility companies as well as propose a new model of economic growth for the less nuclear-dependent nation.
Comments Off on JDP Startup Corner: Pros & Cons of Working with a Partner in Japan