Japan, A True Nation Class Laboratory

Late last year Jon and I traveled to Japan and met with a number of Utilities. A major challenge at the time was the uncertain future of Japan’s nuclear industry. Today marks one of the most significant milestones in Japan’s power industry: the shutdown of the last operating nuclear reactor in the wake of the tsunami and Fukushima disaster last year. While cleanup is largely complete, resolution of the power industry is still uncertain. Public sentiment appears mixed and there is not a clear resolution of the future of nuclear power.

IEEE is doing a series on the Japan nuclear power industry. They report this is the first time since 1966 that Japan has had no nuclear generation. During the interim, Utilities have been filling the generation gap with expensive oil and gas fired units. Widespread adoption of renewables is stalled pending a clear statement on nuclear power. If the nuclear units are reinstated, the generation cost base will be far below the renewables rendering the investment laudable from an environmental perspective, but not financially rewarding.

This summer will surely test the backfill capacity of the thermal generating units. Will Japan rush to widespread renewable deployment? Even if they do, it will be awhile before bulk capacity is online. Will Japan deploy widespread DR? This may be an answer. It will be interesting to see how this laboratory plays out. Stay tuned. – Larry Cochrane