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Japan’s energy mix requires examining trade-offs

by Takashi Kitazume

Staff Writer

Japan has to face the true trade-offs as the nation gropes to choose a future energy mix in the wake of last year’s Fukushima nuclear power plant disaster, an American scholar said at a recent seminar in Tokyo.

In this densely populated country, the cost of NIMBY (not in my backyard) has become an increasingly major component of electricity prices as it becomes more and more difficult and expensive to site and build new power plants. That will be an even more serious issue if the nation is to cut back on nuclear power and rely more on renewable sources like solar and wind, which will require far greater land area to match the capacity of nuclear reactors, said Paul Scalise, a postgraduate fellow at the University of Tokyo’s Institute of Social Science.

Scalise was speaking at a seminar organized by the Keizai Koho Center on Aug. 3 to discuss the prospect of electricity and energy policy reforms, along with Kenji Yamaji, director general of the Research Institute of Innovative Technology for the Earth and a professor emeritus of the University of Tokyo.

Why are electricity rates so high in this country? From the 1950s up until the first oil crisis in 1974, Japan’s electricity prices were comparable to the rest of the world, Scalise said.

But while the post-oil-shock spike in Japan’s electricity rates did not come as a surprise given its dependency on imported fossil fuels, the power costs did not come down despite the fall in oil prices since the mid-1980s, he pointed out.

After the oil crisis, security of the supply of energy sources mattered, and the government and the utilities pushed to diversify the sources, with the focus on nuclear power.

“However, what happened was that in order to license, site and build not only nuclear power plants but also hydroelectric dams, conventional thermal power plants, the lead time for construction of all these power sources increased dramatically . . . and consequently, the construction costs rose more and more,” Scalise said.

Today, with most of Japan’s nuclear power reactors offline following the Fukushima No. 1 plant meltdowns, the nation is again facing the imported fossil fuel price problem as it turns to more thermal power generation, he noted.

There is little room to expand hydroelectric power generation “as most of the available sites — dams and rivers — have already been captured in this country,” he said. Then is it possible to boost the share of the new renewable sources — solar, wind, geothermals, biomass, etc. — given the NIMBY hurdles to siting and construction of new power facilities? he asked.

While the cost of power generation with solar photovoltaic (PV) panels makes it “uneconomic” at current prices, it will likely come down, so will the cost of wind and geothermal, Scalise said. At the same time, it is very likely that the cost for coal, natural gas and oil will rise in the future given the finite resources in the world, he said.

But aside from the price concerns, “one overarching problem will be how much land space would we need to move away from nuclear and fossil fuels into renewable energy,” he said. “This is a practical question to ask given Japan’s high population density ratio as well as the overall size of its economy.”

In a country where 65 percent of its land space is forest area and another 11 percent is arable land, “how practical it is to match 1 gigawatt of power needs (supplied by a nuclear reactor) with solar panels? You cannot possibly fill the entire country with PV panels,” he said. The same issue arises with wind power — only worse, he added.

“This country, like any country, needs to have an adult conversation about the true trade-offs moving forward, and then make a decision on what it really wants — your current lifestyles and economy and current rates of growth . . . or much lower standards of living, much more conservation of energy while moving more and more to renewable energy,” he said. “There is going to be a trade-off, no matter which power source you choose.”

Yamaji said the target set in 2010 to increase the share of renewable sources in Japan’s energy mix to 20 percent by 2030 was in itself fairly optimistic. It would be extremely difficult to further raise the target, he said.

Increased reliance on imported fossil fuel sources raises both cost and supply security problems, he noted, saying that the government should retain the nuclear power option.

Still, the nation needs to at least achieve the 20 percent target for renewables now that a feed-in tariff scheme has been introduced, Yamaji said. Under the scheme, utilities are required to buy all electricity generated from renewable sources at preset premiums for up to 20 years.

The problem with solar and wind power, he pointed out, is that the electricity output per unit space is much lower than other sources, and therefore expanding solar and wind power generation on a massive scale will face cost and environmental hurdles. Also, power generation from these sources requires additional costs to stabilize the output that inevitably varies depending on natural conditions, he said.

Yamaji suggested that among renewable sources, the feed-in tariff scheme should be utilized more to promote the ones whose output is more stable, especially small-scale hydroelectric and geothermals.

What matters, Yamaji said, is whether the power shortage and many other problems triggered by the Fukushima No. 1 accident can be made to promote reforms in the nation’s electricity system.

The shutdown of nearly all nuclear power reactors in Japan has raised concerns whether utilities can secure enough supply to meet peak electricity demand — for example, in the hottest hours of summer — to avoid blackouts. But this also means that power companies have to secure output capacity that may be necessary for only a brief period each year.

Such an inefficiency might be resolved, for example, if a system is introduced to cut off the demand peak through energy use management on the demand side or the activation of supplementary power sources on the part of the users, Yamaji said.

Creation of such a smart energy network, using the battery and control technologies in which Japan is strong, can also be effective in reducing the costs of renewable energy and can be turned into one of the nation’s future growth strategies, he said.