Japanese Energy Policy – Is the Criticism Unfair?
Opinion pieces on the topics of Japanese energy policy are almost uniformly negative, targeting the country’s use of coal and weak carbon goals – even Al Gore has written on it. Most people say that Japan’s energy plan is lacking in ambition and setting the world on a dangerous path, eschewing the benefits of renewable energy and clean tech. The most frequent topic for criticism is nuclear power. Overall, critics claim that Japanese energy policy is filled with failures, missteps, and missed opportunities, and there is no shortage of advice from academics, business people and even ordinary citizens on how to fix it.
In this post I mount a defense to three main criticisms of Japanese energy policy – that its nuclear policy is misguided, its continued support of coal is wrong, and its low use of renewable energy represents a failure of some kind. Finally, I look at the Japanese energy policy as a whole – can it be considered a success?
Issue 1 - Is Nuclear Power in Japan Misguided?
There are many reasons why commentators say this form of power is wrong. The first claim is that the technology is inherently dangerous, especially in Japan where there is risk of earthquakes. Second, endemic corruption in the nuclear power industry creates a culture of complacency – which led to the disaster at Fukushima, and could lead to another. Third, the nuclear waste issue has not been solved. Fourth, that nuclear power is too expensive, and the money could be better spent elsewhere – perhaps on renewable energy.
All these criticisms are wrong. First off, nuclear power is statistically one of the safest energy technologies. There have only been three major accidents – Chernobyl, Three Mile Island, and Fukushima- since commercial nuclear power plants were first used to generate electricity half a century ago. It is estimated that air pollution from fossil fuel generation kills 1.8 million people each year. In contrast, nuclear power plants, since their beginning, are estimated to have killed fewer than 1,000 people. Another surprising fact is that more radiation is released into the environment from coal power plants than from nuclear power plants.
The seismic threat is overblown, too. Seismic activity has never led directly to a nuclear accident in Japan nor elsewhere in the world. The disaster at the Fukushima Daiichi Power Plant was caused by tsunami related flooding, something which can be easily stopped by a seawall, not by direct damage from an earthquake.
Next, it is true that there existed a culture of complacency at Tokyo Electric Power Company (TEPCO). Tight connections between industry and regulators allowed TEPCO to overlook concerns over tsunami threats to its nuclear power plants. But lessons were learned and after 3/11 a new regulatory system was established, breaking the formerly close industry ties and instituting significantly stronger safety rules. The rules are so strict that the cost of meeting the new regulations is estimated at over $100 billion.
The nuclear waste issue is exaggerated, too. Nuclear waste spends its first 5 years in a cooling pool, after which it is stable enough to be kept in a dry concrete casket. These dry caskets are safe enough to stand next to or touch, and there have been no recorded accidents from these caskets. It is estimated that a single coal power plant generates more waste in one day than a nuclear power plant makes over its entire lifetime.
The issue of expense at first glance seems a valid one. Nuclear power plants are expensive to build and maintain. But the benefit of nuclear power comes in the low cost of fuel, making nuclear power, overall, the cheapest form of electricity in Japan. In any case, the Japanese electric power industry is a for-profit industry, operating in a liberalized market. The electric power companies would not be pursuing nuclear power if it were a money losing endeavor.
Energy security is an extremely important issue for Japan, a country over 90% reliant on imports to serve its energy needs. Decarbonization is also important. In light of this, and the decades of accumulated knowledge on the technology, nuclear power can play an important role in Japan’s energy landscape. This is why the government still intends to get 20% of its electricity from nuclear power plants by 2030. The experience at Fukushima should be a lesson in improving the technology, not a reason to give it up.
• Issue 2 – Is Japan’s Continued Use of Coal “Wrong”?
Another common criticism of Japan regards its continued use of coal. Today, coal accounts for more than a quarter of the country’s primary energy supply. Japanese companies are continuing to develop and build coal plants at home and abroad, and Japanese banks are among the biggest coal plant financiers in the world. The use of coal is seen as simply inexcusable in this day and age.
But coal is a critical fuel source for Japan and its use can, counterintuitively, play a role in decarbonization. Although many dismiss coal as a fuel of the past, it is important to understand that that coal is still a major global energy source, supplying a third of our planet’s energy. It is used to generate electricity as well as power the furnaces and industrial processes of steel mills and chemical refineries. Nearly all major countries are still using coal, with some using it more and more. In light of this, Japanese efforts to develop increasingly more efficient coal technologies can make a real difference.
Japanese plants emit about 20% less CO2 than a typical coal plant and are considered the best in the world. But what makes Japan truly special is its efforts to develop the next generation of coal power plant technology – ammonia or hydrogen gas co-fired plants. This innovative technology can improve the efficiency of coal power plants a further 20%. Japan is alone in trying to achieve anything more than a few percentage point increase in coal power plant efficiency.
The impact of these efforts are global. In the developing world, countries rely on financing, primarily from China and Japan to build new coal plants. This kind of financing usually requires the recipient country to use the funding source country’s technology. Japan swearing off coal will not change Vietnam or Bangladesh’s plans to build a coal power plant; rather, it would drive those “buyers” to purchase less efficient and more polluting plants elsewhere. In the developed world, countries looking to build a coal plant, or upgrade an existing plant’s technology would no longer have Japan to depend on for the world’s most efficient technology, were it to abandon coal.
The latest Basic Energy Plan calls for about a quarter of the country’s electricity to come from coal in 2030. News reports indicate that the Ministry of Economy, Trade and Industry will mandate closure of the least efficient plants and the government is supporting development of next generation, ultra-efficient coal power plant technologies. Coal is not ideal, but it is the reality, and Japan’s role in developing higher efficient technology is important.
Issue 3 – Why Does Japan Have Such Low Levels of Renewable Energy?
Japan’s low penetration of renewable energy is another area of criticism. The country gets just 2% of its total energy supply from solar, wind, and geothermal – a surprisingly low number considering Japan’s bold carbon goals and its position as a major manufacturer of solar panels and wind turbines. The 100% clean energy goals of California and Hawaii, with their heavy reliance on renewable energy, are held up as examples that countries like Japan should follow. But this criticism is unfair, because Japan is arguably the most difficult, and expensive place to build solar and wind farms, not to mention geothermal plants. Ideally, we would get all our energy from renewable sources, but in the context of Japan’s technological challenges and geography, is it simply not possible at any reasonable cost.
On the technical side, there are two issues. First, the Japanese electric grid is islanded, with no links to China, South Korea, or any other country. This makes it hard to balance electricity supply and demand. When you can’t easily balance your electric grid, it is harder to integrate variable and often unpredictable forms of power generation – in other words, solar and wind. The second technical issue is that Japan’s grid is fragmented into two parts, covering the eastern and western part of the country. Each grid operates on a different frequency and power can’t be easily sent back and forth, further making the balancing issue difficult. But even if the grid situation were improved, renewables still face one big, underappreciated problem – land. Solar and wind needs land, and Japan doesn’t have it. In fact, Japan has just 0.09 acres of agricultural land per person, compared to 0.9 in the EU region and 3.1 in the US.
constructed with data from World Bank Databank
Agricultural land, in general, is the most common place to situate solar and wind farms. Unlike in the US or Australia, where you have enormous swaths of flat, unused space, solar and wind farms in Japan have to be built either on a small scale, or in mountainous and inaccessible regions, making this specific form of power remarkably expensive. Geothermal power plants are difficult to build because the resources exist mainly in areas either developed as hot-springs resorts, or in protected reserve land. Offshore wind power is difficult to build because of Japan’s deep seabeds. When looking at the overall, levelized cost of power generation, solar and onshore wind are about 2-3 times more expensive in Japan than in the US or Europe. Comparing Japan to other countries one-for-one is an unfair exercise.
Under the Japanese context, solar and traditional wind power doesn’t make much sense but this doesn’t mean that Japan is giving up on renewable energy. Offshore floating wind technology is something the Japanese government is pursing. Japanese energy policy established a 4GW target for the next 10 years, a high feed in tariff for this type of energy development, public funding and a new “offshore wind lease” auction mechanism. The Japanese Wind Power Association calculates that Japanese off shore floating wind farms have the potential to supply 424 GW of power – that is nearly 5 times the amount that all of Japan’s electricity generating plants combined are producing today.
• Overall- Is Japan’s Energy Policy “Working”?
Considering all its successes and failures, at the end of the day is the Japanese energy policy “working”? Is it fulfilling its intended goals?
In order to answer this question, we first have to define what the goals are - these are to ensure a reliable, economic, and environmentally sensitive energy supply.
Energy policy doesn’t exist in a vacuum, so blindly comparing countries isn’t fair. This is where most critics get it wrong. Every country is endowed with different natural resources, has a different kind of economy, and has its own technical issues. A perfect energy policy, if there is such a thing, would look different for each country. The right framework for evaluating an energy policy would be to consider these goals within each country’s context. How does Japan fare in the big three areas of reliability, economics, and environmental impact?
On the criteria of reliability, Japanese energy policy has certainly succeeded. Electric grid reliability, a good proxy for energy system reliability, shows that the Japanese energy supply is among the most dependable in the world. On average, the Japanese electric grid experiences outages just once every 5 years. In the United States, that figure is 8 months. In Europe, outages in the UK and Germany occur about every 6 months. Electricity outages in Japan last on average 25 min, while lasting 4 hours in the US. These numbers are remarkable considering the technical challenges in managing the Japanese electric grid and the supply challenges in maintaining stable energy imports. Energy shortages and disruptions in Japan are rare, isolated events.
Economics is a mixed area for Japan. Some fuels are relatively cheap. Petroleum fuels, such as diesel cost less in Japan than on average across the OECD. Electricity and natural gas on the other hand, are more expensive, costing more than the OECD average. The higher costs of electricity and natural gas can be attributed to the priority placed on reliability and environmental impact. Japan pays a so-called “Japan premium”, higher than normal natural gas prices, to ensure a stable supply. Japan could certainly make cutbacks to lower its cost of electricity or natural gas, but that would reduce the key factor of reliability, and would likely increase air emissions. In context, these higher prices are understandable.
constructed with data from IEA Energy Prices and Taxes 2019
Finally, in the area of environmental impact Japanese energy policy has most definitely succeeded. Nuclear fallout from the disaster in Fukushima is a serious issue, as are particulate emissions from fossil fuel plants. But the most important overall measure of environmental impact is carbon dioxide, because it is the main driver of climate change. On this front, Japan has done well.
constructed with data from World Bank Databank
Japan emits far less CO2 per person than the US and Australia, and less than the average for high-income countries (defined by the World Bank as countries with a yearly per capita gross national income over $12,500). This is remarkable, given the Fukushima-shock that brought enormous, sudden energy supply challenges when all of Japan’s nuclear power plants were stopped- leading to an immediate restart of dozens of fossil fuel plants. If it were not for this, Japan’s carbon emissions would be even lower. Being around average is not something you normally boast, but for Japan and its unique circumstances, it actually is. Japan doesn’t have the benefit of easy to build carbon free energy, whether that be solar or wind power, or even nuclear, considering how difficult it has been to restart Japan’s idled nuclear power plants.
Considering the criteria of reliability, economics, and environmental impact, Japanese energy policy fares surprisingly well. It enjoys world-class reliability, prices below average in some areas (and not inordinately high in others), and below average per capita carbon emissions.
• Conclusion- Making the best of difficult circumstances
Criticisms of Japanese energy policy touch many topics, though they mostly regard the issues of nuclear power, coal and renewable energy. On these three points comparative data and a holistic viewpoint shows the criticisms to be wrong. On the whole, nuclear power was a well thought out strategy for Japan and, with the right fixes, could continue solve the country’s energy challenges. The country’s use of coal can actually support decarbonization. Land issues explain why renewable energy is a relatively small part of the country’s energy supply. Overall, the Japanese energy policy fulfills the main criteria by which any energy policy should be measured.
Every country has its problems, Japan included. But at the end of the day, through more challenges than you’ll find almost anywhere else, Japan provides dependable, relatively clean, and reasonably priced energy to its citizens. This is more than can be expected from most countries in the world. Japanese energy policy deserves to be a case study in what works – in making the best of difficult circumstances - rather than a target for what doesn’t.