Japanese economy needs nuclear second chance
By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Japan needs to give nuclear energy a second chance. Prime Minister Shinzo Abe’s goal of weakening the yen will make electricity even pricier in a country that imported over 80 percent of its energy even before the Fukushima disaster in 2011.
In September 2012 the government of former PM Yoshihiko Noda finally bowed to the backlash against nuclear energy and set the goal of closing all Japan’s reactors by 2040. Abe, who took office in December, wants to turn public opinion the other way again. In reality, his expansionary economic plan essentially requires it.
The nuclear industry’s share of Japanese electricity generation dived from an average of 30 percent between 1987 and 2011 to just 2 percent in 2012, according to the U.S. Energy Information Administration, as reactors were closed while new safety measures were put in place. Japan’s bill for energy imports spiked, with the cost of liquefied natural gas jumping 25 percent to $66 billion in 2012, according to the World Nuclear Association. Major regional utilities like Kansai Electric Power, meanwhile, hiked electricity prices by close to a fifth.
Abe’s policies aim for a weaker currency and could bring a burst of inflation. But if energy costs, particularly electricity, surge upward then the resulting drag on companies and consumers could easily squelch the growth the prime minister hopes will follow.
Before Fukushima, Japan hoped to increase the proportion of its electricity generated from nuclear power to about half. For a nation recovering from one of the worst reactor accidents in history, it might seem a tough political sell to revive that goal. But policymakers managed to win support for the industry in the decades before 2011 despite the national trauma caused by the atomic bombing of Hiroshima and Nagasaki at the end of World War Two. By 2010 Japan was generating more electricity from nuclear reactors than anywhere else except the United States and France.
Of course the Fukushima accident, triggered by an earthquake and devastating tsunami, was a huge blow to confidence. It has also revealed the financial risks of nuclear power, reducing former stock market behemoth Tokyo Electric Power to a quasi-nationalized zombie company. Ordinary Japanese may take a lot of persuading that the dangers are worth it. But Abe’s plans for a broader revival could falter without a hefty – and safety-conscious – nuclear program.