TOKYO – If the energy industry gave out gold medals for blind loyalty, Japan would be on the winner’s podium year after year.
But especially in 2021, a year in which Japan commemorates two milestones. One is the Tokyo Olympics that officials still hope to pull off in July, despite the Covid-19 pandemic. The other is the 10th anniversary of the tragic March 11, 2011 earthquake – Japan’s biggest ever – and the resulting crisis in Fukushima.
Both shine a spotlight on how little progress Japan has made over the last decade.
One is a lingering concern about radiation hot spots just 240 kilometers north of Tokyo. The other is Japan’s medal-worthy obsession with keeping nuclear power at the center of its power mix – one that is now officially holding back Asia’s No. 2 economy.
Japan was forced to mothball its 54 commercial reactors post-Fukushima. Watching Tokyo come perilously close to being evacuated turned the nation’s 126 million people against reactors they’d long taken for granted.
There’s widespread agreement that one of the globe’s most seismically active places needs to rethink nuclear risks. This, after all, is the nation that invented the word “tsunami.”
But when Shinzo Abe took the premiership in December 2012, he was having none of it. His Liberal Democratic Party set out immediately to reopen the reactors one by one and keep nuclear at the core of Japan’s energy mix, no questions asked.
That decision has aged terribly.
Of the 33 commercial reactors regulators deem viable, nine have been okayed for restart. Of them, just four are operating. To make up the difference, Tokyo ramped up coal use aggressively.
By 2019, it accounted for 33% of Japan’s electricity mix in fiscal 2019. When you factor in the 23% of power from renewable sources, Japan is now in the 70% fossil-fuels-use club. And its carbon footprint is expanding apace.
Abe’s atomic u-turn
Considerable blame for this 2021 reality falls on Abe’s government, which had a once-in-a-generation opportunity to move Japan upmarket. Instead, Abe doubled down on the “nuclear village” that had long led Japan astray.
The reference here is to the pro-reactor nexus of bureaucrats, companies, investors and academics that comprise Japan’s answer to America’s military-industrial complex.
On the one hand, the LDP views the tens of billions of dollars it lavished on the industry over the years as too great a sum from which to walk away. On the other, the nuclear village is the most powerful vested interest in the land – a case study in “regulatory capture” run amok.
“The restart approval for nine reactors seems to ignore the risks of safely operating nuclear plants in such a seismically active nation,” says Jeff Kingston, head of Asian studies at Temple University’s Tokyo campus.
“Nuclear skepticism remains high because the government and utilities have betrayed the trust of the people,” he says.
“Yet again they are trying to cook up reasons why the science is fine and risks manageable. The $600 billion cost for clean-up and decommissioning of the three Fukushima reactors over the next few decades is a powerful reminder about the hubris of the nuclear village.”
This loyalty also has blinded Japan to the biggest economic opportunity of this millennium: inventing and commercializing renewable energy sources so that China, India, Indonesia and developing nations from Africa to Latin America can avoid choking on rapid growth.
Alas, Tokyo’s nuclear obsession left space for China’s Xi Jinping to grab the lead in Asia’s renewables game.
There’s still room for Japan Inc to innovate and carve out a lucrative piece of the market. And with some political will, the government could grease the path. But so far, that will has been in short supply.
2050 or 2030?
In October, one month after taking power, Prime Minister Yoshihide Suga announced that Japan would shoot for carbon neutrality by 2050. Under this “Green Growth Strategy,” Japan aims to boost the role of renewables to 50-60% while thermal power and nuclear energy produce a combined 30-40%.
Yet, given the velocity of technological change, Japan is pretty certain to meet that goal even if the government does nothing. Targeting 2030 would have made eminently more sense – and helped make up for some lost time since 2012.
Mika Ohbayashi, head of the Renewable Energy Institute think tank, speaks for many when she calls this “a poor starting point for discussions“ that betray a lack of ambition. Japan, she argues, should do by 2030 what it plans to by 2050.
There are some flashes of determination. Tokyo, for example, hoped to end the local market for new passenger vehicles powered solely by gasoline by the mid-2030s. The idea is to swap them out for electric vehicles, hybrids and fuel-cell engines. That requires vastly reducing the costs of batteries.
The Japanese public would surely approve of a shrinking role for nuclear power. An Asahi newspaper poll last month found that only 32% are comfortable with restarting nuclear reactors. It hardly helps that two of the recurring challenges surrounding the Olympics have been radiation risks and concerns about government transparency.
Kazue Suzuki, Greenpeace nuclear campaigner, isn’t alone in warning that Tokyo is “deceiving people” by underplaying health risks. There’s an ongoing effort by snarky subversives to rebrand the event the “Radioactive Olympics.”
Ex-PMs weigh in
Kan was in power 10 years ago this week when a magnitude 9.0 trembler hit. Koizumi’s 2001-2006 tenure saw some of the biggest reforms in modern Japan, including the privatization of the sprawling Japan Post system.
Koizumi is also the father of Energy Secretary Shinjiro Koizumi, another nuclear-power skeptic. What’s intriguing about the argument Koizumi Sr. and Kan make is that it’s an economic one.
The nuclear village long argued that Japan can’t afford to turn away from reactors. Yet, as Koizumi Sr. points out, this is 1960s thinking. Pivoting to renewables, he says, is Japan’s best hope of creating millions of high-paying jobs this decade.
“Japan has so much natural sources of energy like solar power, hydropower and wind power,” Koizumi Sr says. “Why should we use something that’s more expensive and less safe?”
There’s a bit of irony here, considering that Koizumi was a good soldier for the nuclear gang during his five years in power. He also was Abe’s mentor.
A post-Fukushima epiphany led Koizumi to pivot to a “zero nuclear power” position – and a belief that a pivot to renewable research and development and invention would put Japan on a more vibrant economic path.
“Japan can grow if the country relies more on renewable energy,” Koizumi argues. In other words, supporting a new generation of startups would create scores of high-paying jobs and do more to end deflation than Bank of Japan easing.
How Japan can
Myths are very much at play as Japan’s 2021 unfolds. One is that nuclear power is safe, clean and cheap. That is, until a giant earthquake and tsunami upend the best-laid plans and narratives.
Another: Japan is devoid of natural resources. Though it has no oil or natural gas, it is, as former Prime Minister Koizumi says, rich in forces of nature that can be harnessed for power – from solar to wind to geothermal sources.
Few nations, meantime, are better positioned for the biggest economic opportunity anywhere: devising and marketing ways for the developing world to grow sustainably. When Tesla’s Elon Musk set up his $5 billion lithium-ion gigafactory in 2014, one of his first calls was to Panasonic to partner with its cutting-edge battery unit.
Post-Fukushima Japan has indeed entertained an energy-driven future. The region surrounding those wrecked reactors is trying to position itself as a renewable energy hub with ambitions to supply 100% of power needed by 2040. The northern town of Namie is home to the world’s largest renewable hydrogen plant.
Within Suga’s broader green growth plan is a “Basic Hydrogen Strategy. The gist is getting 10% of power from hydrogen and ammonia sources. And to commercialize hydrogen power generation so as to win Japan Inc. pivotal place in global supply chains.
This, too, will require political will. Suga’s team, in power since Oct. 16, has been big on slogans for 2050, small on specifics to get there.
The most promising route would be to incentivize Japan Inc. to aim research and development efforts at renewables. That would help Japan increase its stable of tech “unicorns” and keep Japan in a game that Xi’s China is winning.
Advancements in renewable energy are pivotal to Xi’s “Made in China 2025” extravaganza. By investing trillions of dollars in owning the future of aerospace, artificial intelligence, biotechnology, digital currencies, electric vehicles, 5G advancements, robots, semiconductors, producing enough tech “unicorns” to make Silicon Valley East a reality and owning the renewables space, Xi is highlighting the costs of a decade of Japanese dithering.
In recent years, much of what Japan does well in recent decades has been commoditized. China, South Korea and others are making cars and investing in electronics, robotics and biotechnologies.
The real jockeying, though, is inventing clean methods of powering everything from passenger vehicles to commercial trucks to homes to rail networks to airplanes to ships.
This creates an opening for Japan.
The post-Fukushima effort to protect the nuclear industry “sort of left things adrift,” says analyst Tobias Harris at consultancy Teneo.
Now, Energy Minister Koizumi puts it, “we are committed to realizing a decarbonated society, and we are ready to contribute as a more powerful country in the fight against climate change.” At the same time, it’s good to see him — and his dad — prodding the LDP to view phasing out nuclear as an opportunity, not a threat.
Analyst Scott Seaman at Eurasia Group finds it significant that Suga’s government will “provide money, likely via a special fund, for companies that help it pursue that goal through R&D, new technology adoption, etc. Suga’s government is very focused on boosting use of renewable/greener energy, including offshore wind.”
The real question, though, remains: How to do it?
As Ken Koyama at the Institute of Energy Economics, notes, there are few clear blueprints anywhere for paying for such a conversion. “It looks as though we are sailing on an uncharted voyage,” he says.
A key challenge is setting up safety nets to soften the blow, says strategist Mari Yoshitaka at Mitsubishi UFJ Research & Consulting. “Reducing their carbon footprint would literally be a matter of survival for some companies,” she says.
So it’s high time for Japan Inc. to get serious about carbon-neutrality. If it does not, its nuclear obsession could squander the nation’s economic future.