Page 2 of
2 Japan
builds a Galapagos of power By
Andrew DeWit
Other areas of efficiency
potential include refitting housing stock.
Consumption of energy in the housing and other
building stock is roughly 40% of overall demand,
and can be cut by 90% through the deployment of
passive housing or zero net energy buildings. [23]
The aforementioned ACEEE report notes that Japan's
building codes remain voluntary, and the
efficiency of its commercial building stock is
relatively poor.
The GEA study also tells
us that:
The global electricity supply system
is currently undergoing fundamental changes in
its infrastructure, associated not just with the
rapidly increasing amounts of renewable energy,
but also with the development of new production
and end-use technologies. One change is an
increase in the
large number of
distributed production units that are
significantly smaller than traditional thermal
power plants. This development will include
low-voltage connections from micro-distributed
generation/CHP [combined heat and power] plants
in individual households. Another important
development is active control of this
low-voltage demand, introducing a new method of
providing flexibility in power balancing. [24]
We
see evidence of that change in the chart below,
taken from the Global Energy Assessment, that
tracks the relative amounts, in gigawatts per
year, of new grid-connected power production
globally. Whereas nuclear power has been flat or
even in decline over the past few years, wind
and solar have been undergoing exponential
increases.
So the big
question is whether Japan will be well
positioned to take advantage of this shift to
distributed and sustainable power as well as to
achieve aggressive efficiencies. Fukushima
opened a door to that transformative,
sustainable direction. The Germans are on their
way through it; but in Japan it seems the
nuclear village and their allies may block the
entrance. The return of the nuclear village and
the restart of their assets may seem the
economically wise choice to get the economy up
and running, but it has political economy costs
that are being soft-pedaled or simply ignored.
Building a power
Galapagos Trends in Japan certainly do
not seem favourable. Again, it is important to
keep in mind that Japan's nuclear village has
the backing of the Keidanren, whose
resource-intensive industries like the status
quo as the household sector subsidizes their
power costs. And much of the central
government's political and bureaucratic class
back the nuclear village as well, at least on
the issue of restarts. The village will almost
certainly be further aided by even worse
political confusion than we have at present.
Former Tokyo governor Ishihara Shintaro's
unnecessary and costly provocation of the
Chinese, especially over the Senkaku Islands
issue, will likely help distract attention.
Liberal Democratic Party leader Abe
Shinzo and his preoccupation with constitutional
revision might pitch in as well. Chaotic party
politics and distracted policymaking is a useful
context for rolling back reform, coopting key
elements of the pro-renewable coalition, and
thus returning Japan to the direction it was
headed before Fukushima.
We have already
seen that the nuclear village is returning,
perhaps to dominate policymaking in a chaotic
and gridlocked central government. As shown in
the chart below, from the IEA's 2012 "Energy
Technology Perspectives," Japan's nuclear
village already dominates government energy
research and development budget, taking 55% of
it in 2010 versus 49% in South Africa, 38% in
France and even less elsewhere.
The nuclear village continues to argue
that renewable energy is undesirable because of
its cost, its variability due to changes in
levels of sunshine, wind speed, and other
factors. They were also not supportive of smart
grids because the interactive capacity of the
smart grid allows the diffusion of renewables.
That is why Japan is a laggard on the diffusion
of smart meters and other core technologies.
Where Sweden and Italy already have 100%
diffusion of smart meters, Japan's Tokyo
Electric is aiming to get 80% diffusion by about
2017. In other words, it is clearly in no hurry.
Even when Japan has sought to develop
smart-city, smart-grid and other kinds of test
projects, their innovative potential has been
blunted by the potent role of vested interests
in controlling their scope. [25]
Hence,
the return to prominence of the nuclear village
is almost certainly going to see it work hard to
maintain the structure of centralized power
generation. It may lead to maintenance of the
nuclear-centred utilities' monopolies in power
markets and their control over the grid, even
though there is an official commitment to
deregulation.
The return of its
nuclear-centred 2010 energy plan would almost
certainly follow, as it deploys strategies that
it and utilities elsewhere have used repeatedly
to marginalize renewables. It is also proceeding
with plans to further centralize generation
capacity through the construction of several
reactors that were already underway before the
Fukushima crisis.
The nuclear village's
antipathy towards significant levels of
distributed and renewable power seems unlikely
to change, especially since it threatens its
straitened income streams. Therefore Japan risks
being put again out of step with what appear to
be global trends in distributed power generation
and the smart design of urban communities.
Japan, with its shrinking and
increasingly less competitive economy, needs
this spur to innovation. Power markets globally
are in the midst of revolutionary changes that
center on "smart cities" and the introduction of
information technology as well as renewable
energy.
Prior to Fukushima, Japan was
handicapped from competing in these enormously
lucrative markets, whose cumulative value to
2030 has been assessed by Nikkei BP as 4,000
trillion yen. Keep in mind that Japan's IT
makers, including iconic Sony, may be ready to
go under. It is clearly a very bad time for
Japan to let vested interests dictate the
revision of rules and institutions in a core
part of the economy.
It was no accident
that the rebuild of Tohoku, devastated by last
year's tsunami, was originally to be centered on
smart cities, smart grids and renewable energy.
This path was in reaction to the nuclear
meltdowns as well as the centralization of power
generation and thus of economic opportunity.
Centralization also undermined resilience by
leaving local communities reliant on power
supplies from concentrated and vulnerable
generation.
For the nuclear village to
regain dominance in policymaking and constrain
the opportunity opened up by Fukushima would be
a truly colossal, costly tragedy for Japan. It
has ample renewable resources. It has 55% of
global green patents. It has the human,
financial, and other resources to use these
advantages to its own and to global benefit.
But it is increasingly risk averse and
lacks good leadership at the critical central
government level. It needs to grow sustainably,
but risks growing into a power Galapagos.
Notes: 1. "Power
Politics: Japan's Resilient Nuclear
Village," Jeff Kingston, The Asia-Pacific
Journal, Vol 10 Issue 43 No 1, October 29, 2012.
2. The November 14 Asahi newspaper quotes
METI Minister Edano Yukio in his recent claim
that it is impossible to specify the level of
reliance on nuclear power. He argues that "the
cabinet has no idea of how many nuclear reactors
will be working by any given year. The new
nuclear regulatory agency will determine how
many reactor restarts to authorize or not
authorize, deciding this independently of the
cabinet, and therefore we can't specify how many
reactors will be running after how many years."
See "Not
Possible to Specify the Level of Nuclear in
Basic Energy Plan: METI's Edano" (in
Japanese) Asahi Shinbun, November 14. 3. The
eight major challenges are 1) Japan's declining
population; 2) its aging population; 3) the
slowness of the capacity to shift the industrial
base; 4) the continuing deflation from the
mid-1990s; 5) the damage from the earthquake and
tsunami that devastated the Northeast region; 6)
the nuclear crisis that ensued from the meltdown
of reactors in Fukushima; 7) the high exchange
value of the yen and the pain that it inflicts
on Japan's export competitiveness; 8) the
continuing instability of international markets
due to the global financial crisis. On the
challenges, see (in Japanese) p.12 of the
February 16, 2012 Ministry of Lands,
Infrastructure and Transport "Recent
Environmental and Energy policy Directions" briefing
note. 4. On this see, Tsuyoshi Inajima
"Japan
Utilities Fuel Costs Set to Double Since
Fukushima Crisis", Bloomberg, October 24,
2012. 5. Indeed, the company's
nationalization on July 31 of 2012, Japan's
largest non-bank nationalization ever, was
premised on restarts. See "TEPCO
says it will see no profit without nuke plant
restarts", The Asahi Shimbun, November 10,
2012. 6. For a timely account of these ties
and the risks Keidanren is willing to overlook,
see Roger Pulvers, "So,
fat cats and a blue caterpillar will save Japan
from nuclear hell. OK", Japan Times, October
21, 2012. 7. Roger Cheng, "The
Era of Japanese Consumer Electronics Giants is
Dead", CNET, November 9, 2012. 8. As
with any assessment, this one has its problems.
One is the large role of CEOs' subjective
appraisals. But the report also relies heavily
on a number of reasonably objective measures,
and therefore has relevance for the debate on
policy options. In addition, it will have an
influence simply because it will help shape the
perceptions of people making investment
decisions. The report is available here.
9. The Energy Watch Group undertook a 2010
analysis of global fuel and electricity costs,
and determined them to be somewhere between USD
5.5 trillion and 7.5 trillion in 2008. See
Energy Watch Group, "Worldwide
Estimated Yearly Energy Costs", March 24,
2008. 10. The Worldwatch Institute
summarizes the health costs in its "Fossil
Fuel and Renewable Energy Subsidies on the
Rise". 11. This figure is calculated for
Annex 1 countries in the UN Framework Convention
on Climate Change (link). See p. 18 of IEA "CO2
Emissions from Fuel Combustion: Highlights",
2011 edition. Carbon Dioxide emission alone
totaled 31.78 billion megatons in 2010, see
here. 12 See the report's section on
electricity here.
13. On prices, see the IEA's 2011
publication "Key
World Energy Statistics". 14. Though
disasters are always tragedies, it is fortunate
that the shock was delivered to the megacity
that is yet the centre of the global economy and
whose Mayor Michael Bloomberg's leadership on
climate change via chairmanship of the C40
Cities (link) has been one of the inspirations
of recent years. On the impact of Sandy on the
US economy and climate-change debate, see Dorsi
Diaz, "President
Obama addresses climate change in acceptance
speech", Examiner, November 7, 2012. 15.
See Richard Heinberg "Soaring
Oil and Food Prices Threaten Affordable Food
Supply", Post Carbon Institute, December 14,
2011. 16. See the book's
first chapter. 17. See, Wendy Wilson, Travis
Leipzig and Bevan Griffiths-Sattenspiel, Burning
Our Rivers: The Water Footprint of Electricity,
A River Network Report, April 2012. See also
Summary
of Estimated Water Use in the United States in
2005", United States Geological Survey,
October 2009 Fact Sheet. 18. Natalie Obiko
Pearson "Asia
Risks Water Scarcity Amid Coal-Fired Power
Embrace", Bloomberg, September 11, 2012.
19. On these matters, see Joe Eaton "Record
Heat, Drought Pose Problems for US Electric
Power", National Geographic, August 17,
2012. 20. See "ACEEE:
United Kingdom Tops in Energy Efficiency, US
Lags in 9th Place". 21. On this, see the
date table on p12 the Ministry of Environment
Building working group
paper of March 23, 2012. 22. A summary
and downloand link for the report, "Lighting the
Way: Perspectives on the Global Lighting Market"
(Second Edition, 2012) is available here.
23. The opportunities are so obvious that
even the US military is emphasizing them. On
this see, Michael Douroux "4,700
Military Homes to Receive Solar Energy
Systems", Business Insider, November 14,
2012. 24. See Global Energy Assessment:
Towards a Sustainable Future. Cambridge: 2012,
p1,155. 25. On this, see for example Scott
Victor Valentine, "A
STEP toward understanding wind power development
policy barriers in advanced economies",
Renewable and Sustainable Energy Reviews 14
(2010).
Andrew DeWit is
professor in the School of Policy Studies at
Rikkyo University and an Asia-Pacific Journal
coordinator. With Iida Tetsunari and Kaneko
Masaru, he is co-author of Fukushima and the
Political Economy of Power Policy in Japan with
Jeff Kingston (ed.) Natural Disaster and Nuclear
Crisis in Japan.
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