Grid Brief International: Japan’s Last Hurdle, By Emmet Penney
The government has granted life extensions and lifted restart bans for much of its mothballed fleet. Japan’s attempt to get nuclear back in the game may explain part of the decrease in spot market….
May 06, 2024 | Read Online
Grid Brief International: Japan’s Last Hurdle
Japan is a resource-poor island that has spent the last few years at the mercy of the LNG market to procure the super-chilled fuel—especially in its power sector. Last year, JERA, Japan’s largest power company, bought a seven-year record amount of LNG on the spot market—about 7 million mt. Why? In large part because of the outage at the Freeport LNG terminal that year; exactly the kind of scenario Japan would like to avoid, given that over a third of their electricity is supplied by natural gas.
But last month, a JERA executive said that this year it bought around 4.5 million mt of LNG on the spot market, a 35.7% drop. JERA’s been murky about why this drop has happened and about how much supply it intends to source from the spot market. Of course, Freeport isn’t fully back in the game yet, having sent out the second tanker since its outage just a few days ago. But does that matter? Japan has been trying to pivot away from LNG, so maybe something else triggered JERA’s decrease in spot market buys.
As we wrote in February, Japan has been on a mission to restart its nuclear power plants. In 2023, the country passed the GX Decarbonization Power Supply Bill to guard against supply shocks in the power sector, increase power supply, and slash emissions. In a remarkable turn of events for a country that kicked off the international turn away from nuclear after the Fukushima Daichi meltdown, Japan wanted nuclear restarts to be the star of the show. The government has granted life extensions and lifted restart bans for much of its mothballed fleet. Japan’s attempt to get nuclear back in the game may explain part of the decrease in spot market LNG purchases.
Now, the country is approaching the last hurdle to restart the world’s largest nuclear power plant in its most ardently antinuclear prefecture, Niigata, which neighbors Fukushima.
Tokyo Electric Power Company is already gearing up to switch the Kashiwazaki-Kariwa Nuclear Power Plant back on. The 8,212 MW plant, which has been idle since 2012, boasts seven reactors and hosts the world’s first Advanced Boiling Water Reactor. Last year, the Japanese regulator lifted its operational ban on the plant and TEPCO has begun final preparations to get its Unit 7 up and running. TEPCO has gone so far as to load it with fuel, a bold move.
But are the people of Niigata on board? According to Nikkei, “local attitudes are divided and the future is uncertain.” And local consent is necessary—for the dozen other reactors returned to life in Japan, the people had to give the thumbs up. How likely are locals to sign on?
"I am not convinced at all because there are people who are still suffering from (the consequences of) the Fukushima Daiichi nuclear accident," Ayako Oga, a 51-year-old farmer from Niigata, told the press at a protest against TEPCO’s refueling. Of course, no one was harmed by radiation from Fukushima, but fear and obfuscations have maintained their hold on many people in Niigata. This is born out in recent polling data.Just two months ago, 60% of those in Niigata were against the restart, while only 18% were for it.
And then there’s the local government. The Japanese national government has been seeking the Niigata Governor’s approval, but Hideyo Hanazumi will need convincing. “Hanazumi has said challenges remain concerning how to evacuate residents if an accident occurs, particularly in light of the powerful Jan. 1 Noto Peninsula earthquake in nearby Ishikawa Prefecture and heavy snow in the prefecture in 2022,” reports Kyodo.Whether or not Hanazumi’s safety concerns are in good faith or not remains to be seen.
A real fight could brew between the local and national governments over the plant. The Japanese political establishment is committed to hardening its power sector. If, by some miracle, the people of Niigata and their governor can be convinced, Unit 7 could come on line by the summer, which would ease concerns of a power crunch during the seasonal heat. Even more important is the plant’s location—it serves Tokyo itself.