Because it lacks abundant natural resources such as coal, oil, and natural gas, Japan imports more than 80 percent of its energy supplies. The 1973 oil shock from the Arab oil embargo convinced Japanese leaders that they needed to reduce their country's dependence on foreign oil. At that time, oil was used to generate about 66 percent of Japan's electricity. Nuclear energy offered a means to reduce this dependency. Today, nuclear power generates about 30 percent of Japan's electricity while oil accounts for 11 percent.
Tokyo wants to further increase nuclear power's share of electricity generation to 41 percent in 2017 and 50 percent by 2050. Japan presently has 54 commercial nuclear reactors and is building two more. It has plans for at least a dozen more in the coming decades.From the FT:
From conversations I have had in recent years with Japanese nuclear energy officials, I have learned that they prefer a balanced portfolio with not too much reliance on a single source of energy for electricity. But moving toward one-half of Japan's electricity from nuclear power appears too risky in light of the recent massive earthquake. About one-fifth of Japan's nuclear plants were shut down. A prolonged shutdown of a significant portion of Japan's electric generators could affect public well-being -- for example, hospitals need reliable power supplies -- and could harm the Japanese economy.
One possible solution is to ramp up Japan's use of renewable energy sources. However, politically powerful forces stand in the way of greater development of renewable energy. Japan has 10 major electric utilities that wield tremendous political influence over local and national governments. The utility executives favor large power generators such as nuclear power plants. Wind, solar, and geothermal plants tend to be much smaller in power generation.
In 2010, the Japan Renewable Energy Policy Platform, an association of several renewable energy organizations, issued the first renewable energy white paper published in Japan. Its report underscores the lack of government incentives for increasing use of renewable energy. Japan had been in first place in the world in solar photovoltaic installation until 2004, when the government cut financial support. Moreover, renewable portfolio standards have been set too low. National targets were reached in recent years but have only resulted in a small fraction of electric power from non-hydro power sources. Furthermore, most geothermal power is not included in the renewable energy targets because of concerns about water use and the effects on spas. But geothermal has a huge potential because of Japan's location in a geologically active zone. In sum, renewable sources could provide about 67 percent of Japan's electricity by 2050 if the government would implement effective policies.
Japan, a world leader in nuclear power, should also become a leader in use of renewable energies. This will help alleviate safety and financial concerns about too much dependence on nuclear energy. It will also point the way toward a sustainable energy future for the world.
The International Energy Agency, the western countries’ oil watchdog, estimates that it takes about 38.8 barrels of crude oil to replace one megawatt of idled nuclear power generation capacity in Japan. If the country were to replace all its shut down nuclear capacity entirely with oil, it would have to import 375,000 barrels a day more on top of Japan’s expected purchases this year of around 4.25m b/d.
However, Japan is more likely to opt for a combination of oil, LNG and thermal coal.Map from the New York Times:
The country boosted significantly its purchases of LNG in 2002, after the shutdown of 17 of Japan’s 54 reactors for safety inspections, and in 2007 and 2008 after the shutdown of the Kashiwazaki-Kariwa atomic station, the country’s largest.
The increase in LNG demand will push up spot prices globally, hitting gas prices from South Korea to the UK, but the impact will be cushioned by a relatively loose supply and demand balance as producers such as Qatar boost their supplies.
Tokyo is also likely to increase coal imports, as Japan’s utilities negotiate annual supply contracts with Australian miners. The negotiations, which face a deadline on April 1, are likely to settle annual prices in excess of the record $125 a tonne agreed in 2008-09, traders and analysts said.