Japan to close last nuclear reactor

Another long, hot summer is looming for Japan just as it shuts down its last operating nuclear power reactor, worsening a squeeze on electricity and adding urgency to calls for a green energy revolution.

Idling power source that once provided one-third of electricity supply

An employee of Tokyo Electric Power Company uses his mobile phone at the Kawasaki Thermal Power Plant south of Tokyo. Japan used to get one-third of its electricity from nuclear power. (Toru Hanai/Reuters)

Another long, hot summer is looming for Japan just as it shuts down its last operating nuclear power reactor, worsening a squeeze on electricity and adding urgency to calls for a green energy revolution.

On Saturday, the last of the country's 50 usable nuclear reactors will be switched off, completely idling a power source that once supplied a third of Japan's electricity. At a time when temptation to set the air conditioner to deep freeze is at its greatest, companies and ordinary Japanese will be obliged to economize amid temperatures that can climb above 40 C.

Nuclear energy seemed a steady mainstay of Japan's power supply until the March 11, 2011, tsunami crippled the Fukushima Daiichi plant in the worst atomic accident since the 1986 Chornobyl explosion. Authorities have since tightened safety standards and refrained from restarting reactors that were shut down, mostly for routine checks.

To offset the shortfall, utilities have ramped up oil- and gas-based generation, giving resource-poor Japan, the world's third-largest economy, its biggest annual trade deficit ever last fiscal year. That $100 million-plus a day extra cost, worries over the risks of nuclear power and concern over carbon emissions are leading many officials to view renewable energy such as solar, hydro and wind more positively.

Prime Minister Yoshihiko Noda has pledged to reduce Japan's reliance on nuclear power over time. And Japan is debating renewable energy targets of between 25 per cent to 35 per cent of total power generation by 2030, looking to Germany, which raised the proportion of renewables from 5 per cent in 1990 to 20 per cent by 2010.

"If Japan has the motivation, it can do this, too," said Sei Kato, deputy director of the Environment Ministry's Low Carbon Society Promotion Office. "We have the technological know-how. Japan can do anything that Germany can."

Japan will have 'hard time' without nuclear

Real change has been slow. Giant solar arrays and wind farms can't be built overnight and powerful utilities that spent billions on nuclear are lobbying to protect their interests. The government is muddling along, seemingly unable to take a decisive stand either way as opinion becomes increasingly polarized between mavericks calling for massive investment in alternative energy sources and big business interests that favour keeping nuclear power.

A protester takes part in an anti-nuclear rally in Koriyama, Fukushima prefecture to mark the first anniversary of the earthquake and tsunami that killed thousands and set off a nuclear crisis. (Yuriko Nakao/Reuters)

Many believe Japan has little choice but to restart nuclear reactors even in the face of spirited public opposition. Utilities predict power supplies could fall 16 per cent below demand in western Japan during the summer peak.

The government is eager to restart some reactors in coming months if it can persuade skeptical local leaders and residents that they are safe.

"The bottom line is that without nuclear power Japan will have a very hard time meeting demand," said Paul Scalise, a fellow at the University of Tokyo who specializes in Japan's energy sector.

Oil, coal and gas now generate about nearly 90 per cent of Japan's electricity, with hydropower accounting for about 8 per cent and other renewables — solar, wind, geothermal and biomass — making up the balance.

The International Energy Agency estimates shutting all nuclear plants increases oil demand by 465,000 barrels a day to 4.5 million barrels a day, raising Japan's daily costs by about $100 million.

Green energy faces obstacles

Hiroshi Hamasaki, an energy expert at Fujitsu Research Institute, estimates that with stable "feed-in" tariffs, which guarantee renewable energy producers a fixed price for their power, renewable energy generation could surge by 200 times over the next three years.

"There will be a boom close to a bubble, with many companies rushing to enter the market over the next three to five years," Hamasaki said.

Although experts are enthusiastic, green energy in Japan still faces numerous obstacles and headwinds. Besides the nuclear industry's vested interests, those barriers include stifling regulations, a power grid ill-suited to accommodating volatile solar and wind energy, and the huge upfront costs of building solar or geothermal plants. Both are technologies in which Japan is a world leader, although it has lost out to China in solar cost competitiveness.

To help move things along, the government is easing restrictions on land use for solar and wind power. It also is relaxing regulations on small hydropower projects and regulations on drilling for geothermal energy in national parks.

More crucially, last week it approved feed-in tariffs that are expected to spur investment by guaranteeing higher returns for renewable than for conventional energy.

Most of those higher rates, however, will be passed on directly to consumers.