Prolonged nuclear plant shutdown increasingly impacting economy and environment

Feb. 10, 2012

TOKYO --Of all 50 nuclear reactors in Japan (excluding units 1-4 of the Fukushima I nuclear power station), only three are currently operating. These three, too, are scheduled to go offline in sequence over the next few months for a periodic inspection. To restart reactors that are suspended for a periodic inspection, the operators are required to obtain the consent of relevant local municipalities in addition to completing specific stress test procedures. Should this set of procedures not proceed smoothly, all 50 reactors would be shut down by April.

The impact of this problem is gradually becoming apparent. An immediate challenge is to ensure supply capacity for the coming summer season during which the electricity demand is expected to increase. The Japanese government estimates that the country would face an overall shortfall of about 10% in the supply capacity this summer if no nuclear plants were able to restart and the peak power demand remained the same level as last summer.

Some media have reported that the government concealed an estimate predicting that a 6% capacity margin could be secured even without nuclear power. According to a government official, this estimate "has no supporting evidence, and the figure has been padded by including the capacity of pumped-storage hydraulic power generation and renewable energies." The reality seems that the estimate was rather passed over in silence than concealed.

Meanwhile, fuel cost is swelling due to the increased use of thermal power to substitute for nuclear power. If nuclear plants are not restarted, the cost of additional fuel required in fiscal 2012 will exceed 3 trillion yen. The national total of electricity rates is currently about 15 trillion yen annually, and passing the increased cost entirely on to consumers would constitute an about 20% hike in electricity rates. Even if all reserves accumulated by Japanese electric utilities (except Tokyo Electric Power Co., Inc.), which amount to 2.9 trillion yen as of the end of fiscal 2010, were tapped into before resorting to a rate hike, the reserves would dry up in one year in fiscal 2012.

Another issue that cannot be ignored is the increased carbon dioxide (CO2) emissions associated with the shutdowns of nuclear power plants. The government's estimate forecasts that the total CO2 emissions of Japanese electric utilities for fiscal 2011 would be about 500 million tons, up about 130 million tons from last fiscal year. The increase accounts for about 10% of the total 1.26 billion tons of greenhouse gas emissions in the entire country in 1990.

Damage to the country's employment situation is also deepening. For instance, in the Wakasawan area hosting the Ohi nuclear power station of the Kansai Electric Power Co., Inc., for which the stress test procedure has been proceeding faster than the other nuclear plants in Japan, the employment associated with construction work in periodic inspections and other plant operations has now grown to several thousand workers, having considerable importance in the local economy. The impact of the long-term shutdowns of nuclear plants remains to be a serious concern.

LINK