Analysis of Japan's New Energy Strategy 1/4

After the series of twists and turns, the Japanese government has finally completed the energy policy overhaul in response to the nuclear accident at Fukushima Daiichi power plant. Despite the resistance from the business communities and power generators, its comprehensive plan called the Innovative Strategy for Energy and the Environment aims at phasing out all nuclear power plants from the electricity generation fuel mix by the 2030s.

Cabinet Members Finalizing the Innovative Strategy for Energy and the Environment
(photo credit: The Asahi Shimbun)

This plan however contains a variety of contradictory policy measures, and needs careful attentions to analyze the impact. Since it is such a large and important topic to cover, I will discuss and analyze the plan in details over several posts from various perspectives, including its feasibility, flaws in demand forecast, and implications for greenhouse gas emissions.

* This blog is intended to be purely analytic and won't state my position on specific goals and measures.


The primary objective of the plan is to set a target fuel mix for electricity generation in 2030 along with conservation measures to reduce the nation's reliance on nuclear power. The government originally prepared three options for electricity generation fuel mix in 2030: (1) no nuclear power, (2) 15% nuclear power, and (3) 20-25% nuclear power.

The business communities supported 20-25% nuclear scenario due to the concern over the costs and instability of alternative energy sources, mostly renewable energy, while anti-nuclear activists supported no nuclear power scenario over the fear of another accident. The poll suggests the public is also split evenly on this issue. Although many experts saw the 15% scenario as a realistic scenario and good compromise between the two, the Noda Administration picked "no nuclear power" scenario for political reasons which are beyond the scope of this blog.

The plan however calls for phase-out of nuclear power by "sometime" in the 2030s, instead of just saying 2030. This expression"sometime" in the 2030s was expected to ease the concerns from the business communities and power generators, but it diluted the message and purpose of the whole energy policy overhaul and drew negative reactions from the media. Furthermore, there was a last minute change in the positioning of the plan; the administration initially sought official cabinet approval to make the plan basis for related legislation and regulation, but instead, the plan is now called "reference document", which yields little legal authority over government actions.

For good or bad, this scenario expects renewable energy to be the substitute for nuclear power, and its share of electricity generation fuel mix needs to jump from about 10% in 2010 to 35% in the 2030s, whose feasibility will be discussed in the next blog post (see figure below).

Current and Planned Electricity Demand and Fuel Mix
(Source: National Policy Unit)

Besides the generation fuel mix, the plan calls for deploying exhaustive strategies to reduce consumption, such as massive introduction of electric vehicle (60% in new vehicle market sales in 2030, including plug-in electric vehicle) and mandatory deployment of high efficiency light bulbs (e.g. LED). Combing these strategies, the plan aims at reducing electricity consumption of 10% and overall energy consumption of 20% by 2030 (when compared to 2010).


The plan calls for phase-out of all nuclear power plants by "sometime" in the 2030s, and it has three basic principles toward this goal. The first principle is to establish so-called "40-year rule" which mandates phase-out of a nuclear power plant after 40 years of operation. This strategy is based on the assumption that the infrastructure not only decays with time but also becomes obsolete as time progress. While there is no scientific evidence to support this specific time frame of "40-year", it is reasonable to phase-out outdated plants build in the 1960s and 1970s at the end of its planned lifetime.

The second principle is to reboot existing power plants as soon as safety is confirmed by the Nuclear Regulatory Commission (of Japan), which is slated to make a start this month. This is a relatively simple strategy but is expected to be politically challenging to reboot any plant, especially the ones owned by Tokyo Electric Power Company (TEPCO) and Fukushima Daini power plant, which didn't have major damage from the Tsunami but sits nearby Fukushima Daiichi power plant. (some reactors are currently in use as an emergency measure to meet the higher demand in summer)

The third principle is not to build new reactors or replace existing reactors with new ones. This principle sounds consistent with the goal, but there is a confusion about the definition of "new reactors," which is discussed in the following section.


The plan argues that Japan can achieve the goal by "sometime" in the 2030s with these principles, but as most analysts suggest, this is far from true. When implementing "40-year rule," the remaining capacity of existing nuclear power plants won't be zero until 2049 (see the green line in figure below). It's possible that the reactors in Fukushima won't ever be rebooted due to the strong emotion toward nuclear power in Fukushima, but even in this case, the remaining capacity won't change significantly (see the blue line in figure below).

Furthermore, Yukio Edano, the Ministry of Economy, Trade, and Industry (METI), told the press earlier this week that the plants under construction in Shimane and Oma will continue to be built, and that the METI shall give permits to planned plants in most cases. Although the third principle of the plan prohibits new reactors to be built, METI's interpretation is that the plants under construction or in preparation today do not fall into this "new reactor" category. Assuming METI can realize his comment, Japan will have about 20GW of nuclear capacity in 2050, which is far from eliminating nuclear power by "sometime" in the 2030s. (For the sake of simplicity, I assumed that the plant in Shimane will be operational in 2014, the one in Oma will be operational in 2017, and other planned plants will be operational in 2020.)

When comparing these capacity projections to the electricity demand forecast (1 trillion kWh), nuclear power will have 15% of electricity market share with existing plants, and 28% with existing and planned plants (assuming its capacity factor at 80%). These projections suggest under the principles in the plan, Japan cannot achieve "no nuclear power" scenario by "sometime" in the 2030s.

The administration itself admits the feasibility problem of the plan, and it is highly likely that the plan will be revised significantly by other administrations in a few years. In the mean time, the next blog post, which I intend to write "sometime" in October, will look at feasibility of planned massive introduction of renewable energy.