As it continues its recovery from its nuclear crisis, and with the possibility of power shortages looming in the future, Japan has been debating ways to reform its national electricity system to rely less on nuclear power.
In the medium to long term, the government is likely to seriously encourage more generation and consumption of renewable energy and offer tax incentives to the public to consume less energy.
But what is Japan going to do now while it waits for its new “energy mix” policy to take shape?
Using more fossil fuels for electricity generation is an immediate response to meet power demand now that nuclear plants are out of action, said Kenji Hiramatsu, director-general for global issues of the Japanese Ministry of Foreign Affairs.
The use of fossil fuels, especially liquefied natural gas (LNG) in Japan’s case, has consequences beyond the obvious environmental considerations, said Masaru Sato, director of the ministry’s International Press Division.
“It is of concern that this will eventually affect our cost efficiency and competitiveness,” he said, acknowledging worries about power shortages during the coming summer season.
The growing dependence on fossil fuels has begun to take its toll on the business sector. Tokyo Electric Power Co faced heavy criticism when it announced that it would increase rates starting from April 1
The Japan Information Technology Services Industry Association in late March demanded the hike be postponed but the electricity supplier said it had been facing with mounting costs for fossil fuels to run thermal plants because all of its nuclear reactors were shut.
As of March 26, only one out of 54 commercial reactors in 17 nuclear power plants in Japan remained in operation. The rest are undergoing more stringent safety tests before they can resume, except for those damaged in the nuclear accidents last year.
This is the chief reason why Japan has begun rethinking its national energy policy. Mr Hiramatsu said he expected a master plan for the energy mix policy to be ready sometime this summer.
Before last year’s earthquake and tsunami, about 30 per cent of Japan’s electricity supplies came from nuclear power generation, said Mr Sato.
At that time, then there was a plan to increase the share of nuclear power generation to 53 per cent by 2030, he said.
All that has changed now.
“We are discussing depending less on nuclear and developing more renewable energy generation, and also doing more on energy-saving and energy efficiency technologies,” said Mr Hiramatsu.
Last summer, the Kanto area was successful in cutting energy consumption by 15 per cent, which was an example of what could be achieved when the public were concerned enough about a possible energy crisis, he said.
To provide incentives for industries and the public to move to renewable energy such as solar and wind power, a feed-in tariff will be among the measures implemented extensively, he said.
The feed-in tariff encourages investment in renewable energy technologies by offering long-term contracts to producers, typically based on the cost of generation of each technology.
However, the new national energy scheme will require a substantial budgets. Japan’s financial situation remains weak, and given other problems such as the EU debt crisis, funding sources for a new energy policy are limited. That helps explain the government’s controversial proposal to double the consumption tax to 10 per cent. Whether it will pass is debatable, given the level of public discontent.
“I don’t think nuclear power is actually cheap as they keep saying and we have to manage to depend less on it,” said Takahashi Toshinori, a director of the Matsushima Kaigan Isozaki fishermen’s association.
