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Japanese Nuclear Energy Shutdown
By Tyler Collins

In the wake of the earthquake and tsunami that damaged the Fukushima nuclear power plant in March last year, Japan is in the process of reassessing their entire energy policy.

At the moment, public concern has led to a temporary shutdown of all but 2 of the 50 nuclear reactors in Japan, but a growing movement against nuclear is demanding an even quicker shutdown of the nuclear power generators.

Three options are being considered by the government to reduce the country’s dependence on nuclear power by 2030: reduce the use to 20-25 percent, to 15 percent, and to eliminate nuclear power entirely. Initially there was support for the 15 percent plan, but recent opinion polling has shown overwhelming support for a complete phase out of nuclear power.

Anti-nuclear groups have argued that Japan can temporarily utilize fossil fuels as renewable energy infrastructure is expanded. With only two reactors running, Japan made it through a sweltering summer, proof, they say, that the country is entirely capable of being nuclear-free.

Naomi Hirose, president of Tokyo Electric Power Company, said power companies had averted blackouts this summer only by firing up old oil and natural gas stations and by importing fuel and generators at great cost. Japan would be punished with sky-high energy prices, would become dangerously dependent on Middle Eastern oil and would see its greenhouse gas emissions surge if it went nuclear-free — especially if it did so immediately. Without a swift restart of the remaining reactors, the company’s finances, already crippled by compensation claims after the Fukushima disaster, would worsen further, he warned.

It is estimated by the government that it would cost $638 billion to expand the energy production from renewable sources to offset a nuclear shutdown, and twice that would be needed to reduce consumption through conservation and increased efficiency.

If the country’s 50 nuclear reactors were permanently closed this year, power companies would be hit with losses totaling 4.4 trillion yen ($55.9 billion), rendering at least four of them insolvent, according to calculations this summer by the government’s Agency for Natural Resources and Energy.

The utility companies have a strong incentive to push the government for permission to restart their reactors, even with the risks of greater disasters in the future. Because the cost of another disaster would most likely be greater than the value of the companies, private insurers have been unwilling to insure the utilities. As such, the risks of restarting Japan’s reactors, both financially and in terms of safety, would be borne by the Japanese government and taxpayers, while any benefits would go to the utilities and their shareholders. “They capture all the returns, but bear less than all of the costs,” said J. Mark Ramseyer, a professor at Harvard Law School.

Read more here.

Posted: September 10, 2012