Greenpeace is celebrating the one-year anniversary of Japan idling its last nuclear power plant, calling it an “inspiring lesson for people across the globe.”
But what Greenpeace fails to mention is that Japan’s energy economy has been in chaos since since the last of about 50 nuclear reactors went idle last year in the wake of the 2011 Fukushima nuclear disaster.
Since Fukushima, the Japanese economy has been hampered by rising energy costs and struggling electric utilities that have been propped up by government subsidies in order to keep the lights on amid rising power costs.
In 2010, before the Fukushima nuclear incident, the total cost of power generation in Japan was 7.5 trillion yen. But after the Fukushima meltdown, power generation costs rose sharply to 9.6 trillion yen in 2011 and 10.6 trillion yen in 2012, according to a 2013 report by the Institute for Energy Economics, Japan.
Why the huge price increase? After Fukushima, Japan began idling its nuclear power plants pending safety investigations, meaning the country began using more natural gas and oil — which are imported — to make up the slack.
IEEJ estimates that relying more on imported gas and oil cost Japan 1.2 trillion yen between 2010 and 2012. Power prices could have risen higher, reports IEEJ, had power demand not fallen throughout the country, companies could have spent 3.6 trillion on power generation during that time.
Greenpeace sees this as a good thing. They see the nuclear industry as one that has “sucked billions from taxpayers” and “has defied logical justification, whether it be judged on economic, environmental, security or human health grounds.”
“And in Japan, the nuclear industry has collapsed,” Greenpeace says. “While the global nuclear industry was in decline before the Fukushima disaster, the impact of the catastrophe has accelerated the already rapid decline of the industry, and opened space for the major growth of renewables.”
The Japanese, however, are likely anything but thrilled to see power costs rising and more government funding going to propping up utilities. In May, the government spent 159 billion yen (or $1.6 billion) propping up two power companies who saw huge losses in the wake of the country’s decision to idle its nuclear fleet.
Nuclear power was cost-effective for power companies, but relying on costly gas and oil imports have eaten into power company profit margins, meaning utilities have to charge consumers more for power or go under.
“They’re getting closer to a break-even scenario even without nuclear power,” Tom O’Sullivan, founder of the energy consulting firm Mathyos, told Bloomberg in May.
It’s also odd that Greenpeace is celebrating the absence of nuclear power in Japan as it means the country must increase its reliance on fossil fuels — which environmentalists say harm the planet through pollution and global warming.
IEEJ reports that Japan’s primary energy supply in 2013 contained 125.4 million metric tons of oil equivalent (Mtoe), up from 119.1 Mtoe in 2010. There were also, as predicted, huge increases in the amount of natural gas and oil in the country’s energy mix between 2010 and 2013 — which is predicted to grow throughout the next couple years.
Japan has also pledged to step up financing for overseas coal development to up supply for its own energy needs. A move starkly different from international groups and many other developing nations.
“Without public loans and insurance from rich countries, emerging countries would turn to less costly, inefficient technologies,” said Takafumi Kakudo of Japan’s Ministry of Economy, Trade and Industry. “It could aggravate the CO2 emission issue.”
In July, the state-owned Japan Bank for International Cooperation announced $202 million in credit for Vietnam Electricity to buy Japanese-made equipment to make a coal-fired power plant more environmentally friendly.
Japan has also supported a $1.1 billion coal power project in Chile that is partly owned by Mitsubishi Corp. and funded by a group of financiers led by the Japan Bank for International
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