The March 11 quake and tsunami and the associated Fukushima nuclear crisis seems certain to produce a dramatic change in Japan’s latest growth and energy policy which was only adopted 11 months ago.
Reports in Tokyo Wednesday and yesterday say the government is reviewing its growth strategy set up last June considering a drastic shift in energy policy to better deal with the consequences of the March 11 massive earthquake and tsunami as well as a nuclear crisis.
More to the point, Japan will seek to secure its future electricity needs by not depending on nuclear power as much as was planned in the current plan released last year.
The outline of the new approach could be out next week.
Under the Strategic Energy Plan adopted last June, Tokyo aimed to have the nation’s economy expand a real 2% or more on average by 2020, by focusing higher government spending and accelerating deregulation on seven designated areas such as energy and the environment.
The key part of the plan applying to nuclear energy called for:
- Building 9 new or additional nuclear plants (with the overall plant capacity utilization rate at about 85%) by 2020 and more than 14(with the rate at about 90%) by 2030.
- Achieving long-term cycle operations and shortening operation suspensions for regular inspections.
- Improving the power source location subsidy system (by considering measures to promote the construction and replacement of nuclear plants and place a greater weight on electricity output in calculating subsidies).
- Achieving the nuclear fuel cycle establishment including the development of "pluthermal" and fast breeder reactors.
- International cooperation for nonproliferation and nuclear safety.
Now there are suggestions government spending will be switched to concentrate on renewables, such as solar and geothermal and wind energy, and enhanced use of fossil fuels and smarter energy grids.
Spending would concentrate on these parts of the plan, with nuclear energy relegated down the list of priorities.
That could be bad news for our uranium industry, especially BHP Billiton and its plans for the huge reserves it holds at the Olympic Dam project in South Australia.
The review could undermine uranium industry belief that the impact of the Fukushima disaster on the global nuclear industry and demand has been light.
There are also suggestions that Japan could go soft on plans to boost free trade as it looks to retreat from wider engagement with countries like China and South Korea.
That could be potentially bad news for the Pacific region, which is the fastest growing part of the global economy, as well as for various energy suppliers, especially uranium.
It is a sign the Japanese government, weak as it is, has committed the country on a difficult path in handling the rebuilding of the shattered northeast and rightsizing its energy policies.
At the same time the government is letting it be known that they foresee great difficulties in exporting Japanese nuclear plans and technologies (and the associated fuels) in the wake of the radiation crisis after the Fukushima power reactors were crunched by the quake and tsunami.
(That’s an understandable belief.)
Last October, Japan agreed with Vietnam to construct two nuclear power plants, and it has been in negotiations with Turkey for similar exports.
But now there are reports Tokyo may halt such projects, at least until the results are known from the investigation of the radiation leakage at Fukushima.
Reports from Tokyo yesterday said engineers from the Tokyo Electric Power building went into the reactor hall at the stricken number 1 plant for the first time since the March 11 disasters.
Under the revised growth strategy, Japan reportedly will put more emphasis on the development of renewable energy such as power generated by solar, wind, and geothermal heat, as well as the enhancement of electric accumulators.
Kyodo news service reported "The growth strategy, mainly its energy environment policy, must be transformed in quality," said Koichiro Gemba, Japan’s national policy minister, referring to policies developed in June 2010.
Projects for exporting nuclear power plant technologies will inevitably be revised, the sources said, adding the government is also mulling putting off a deadline to decide on whether to participate in negotiations for a Pacific free trade agreement.
That is the surprising part of the reports.
The changes to energy policy are understandable, given the lack of progress in fixing the Fukushima crisis which, although cooler than in March and early April, still can’t be called under control and secure.
Japan had been expected to decide by next month whether to join in negotiations over the so-called Trans-Pacific Partnership.
But Prime Minister Naoto Kan has repeatedly suggested since the disasters that the deadline may need to be put off.
The key parts of the June 2010 plan were:
Doubling the energy self-sufficiency ratio (18% at present) and the self-developed fossil fuel supply ratio (26% at present) and as a result, raising its "energy independence ratio" to about 70% (38% at present).
The "energy independence ratio" is an indicator that combines the self-sufficiency energy with the self-developed energy supply divided by
