ANALYSIS: Japan's energy policy has been governed by series of shocks

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Like a reluctant suitor vacillating between two ugly sisters, Japan has spent four decades shifting the balance of its power generation between nuclear and carbon fuels.

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By HISASHI HATTORI/ Senior Staff Writer
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ANALYSIS: Japan's energy policy has been governed by series of shocks
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Like a reluctant suitor vacillating between two ugly sisters, Japan has spent four decades shifting the balance of its power generation between nuclear and carbon fuels.

With Japan’s nuclear power program still relatively young, the first oil shock in 1973 provided a powerful impetus for reducing reliance on petroleum.

In fiscal 1973, petroleum accounted for about 73 percent of total electricity generated in Japan, but that ratio had fallen to just about 8 percent by fiscal 2010. Over the same period, electricity generated by nuclear energy increased from about 3 percent to 31 percent.

Before the Great East Japan Earthquake, the central government had planned to increase the share of nuclear energy to 53 percent by 2030.

However, underneath that trend toward nuclear power, a series of incidents culminating in last year’s Fukushima disaster repeatedly sent energy companies scrambling back to carbon fuels.

Revelations in 2002 that Tokyo Electric Power Co. had covered up problems at its nuclear power plants were the first major wake-up call.

Government officials in Fukushima and Niigata prefectures, where many TEPCO nuclear plants are located, began questioning the safety of those plants and there was a significant delay before the officials gave their consent for the resumption of operations at suspended plants.

In April 2003, all 17 nuclear reactors operated by TEPCO had stopped operation, raising doubts about the stability of the electricity supply.

The Niigata Chuetsu-oki Earthquake of July 2007 came as another major blow, forcing the suspension of operations at the Kashiwazaki-Kariwa nuclear power plant.

The earthquake exceeded the design assumptions of the plant and doubts about its anti-quake measures meant that the No. 7 reactor did not resume operation until 2009. Four of the reactors at Kashiwazaki-Kariwa had resumed operations by the start of the Fukushima crisis.

Last year's quake and tsunami stopped not only TEPCO’s nuclear plants but those of other electric power companies across the country. Electric utilities have been forced to turn to natural gas and oil powered plants to make up for the loss of nuclear energy sources.

According to one estimate by the Institute of Energy Economics, Japan, if all nuclear plants remain offline for the rest of the fiscal year, plants using carbon fuels will account for about 90 percent of electricity generated.

"That would lead to a situation where Japan was dependent on fossil fuels to a greater extent than even before the oil shock," says Tsutomu Toichi, an adviser at the institute.

With the central government now revisiting the future balance of electric power sources in the light of the disaster, Toshihiro Matsumura, an economics professor at the Institute of Social Science at the University of Tokyo, says the basic cost calculations that have formed the basis of policy since the 1970s are in the spotlight.

Matsumura, who also serves as a member of an advisory panel for the Ministry of Economy, Trade and Industry, said the old assumption that nuclear energy is cheap is in doubt.

"The costs needed to respond to nuclear accidents as well as the cost of tax allocations distributed to local governments to have them host the nuclear plants should be included in the system as a burden on the plant operator. Only then should a comparison of costs be conducted with other energy sources."

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