Japan to switch off nuclear power, may be some time before it's on again

Japan is set to be nuclear power-free, for just the third time in more than four decades, and with no firm date for re-starting an energy source that has provided about 30 % of electricity to the world's third-largest economy.

Kansai Electric Power Co's 1,180 MW Ohi No.4 reactor is scheduled to be disconnected from the power grid late on Sunday and then shut for planned maintenance.

It is the only one of Japan's 50 reactors in operation after the nuclear industry came to a virtual halt following the March 2011 Fukushima disaster. Japan last went without nuclear power in May-June 2012 - the first shutdown since 1970 - a year after a massive earthquake and tsunami triggered reactor meltdowns and radiation leaks at the Fukushima facility.

The country's nuclear reactors provided close to a third of the electricity to keep the $5 trillion economy going before the Fukushima disaster, and utilities have had to spend billions of dollars importing oil, gas and coal to make up for the shortfall.

In 2011, Japan suffered its first trade deficit in more than three decades, and in July of this year it logged its third-biggest trade deficit on record, at 1.02 trillion yen ($10.5 billion), as a weak yen and rising oil prices made energy imports more expensive.

Several nuclear operators applied in July to re-start reactors under new rules drawn up following the Fukushima disaster, but approvals are likely to be tough to get as the industry regulator strives to show a sceptical public it is serious about safety. Industry projections for a re-start vary from as early as December to mid-2014.

The ruling Liberal Democratic Party and the utilities are keen to get reactors up and running again, with Prime Minister Shinzo Abe singling out reducing soaring fuel costs as a key plank of his economic reform plans.

But opinion polls show a majority of Japanese want to end reliance on atomic power, and oppose re-starts. "The argument that no nuclear power dents the economy would be myopic, considering that if by mistake we had another tragedy like Fukushima, Japan would suffer from further collateral damage and lose global trust," said Tetsunari Iida, head of the Institute for Sustainable Energy Policies, and a renewable energy expert.

"In the new economy, the less you use energy, the more value-added you become. The big chorus for nuclear power is hampering the efforts to move to a new, more open economy."

Import Bill 
Japan consumes about a third of the world's liquefied natural gas (LNG) production, and will likely boost LNG demand to record levels over the next couple of years. LNG imports rose 4.4 % in volume to a record 86.87 million tonnes, and 14.9 % in value to a record 6.21 trillion yen ($62.1 billion) in the year through March.

Imports are likely to rise to around 88 million tonnes this year and around 90 million tonnes in the year to March 2015, according to projections by the Institute of Energy Economics Japan based on a mid-scenario that 16 reactors will be back on-line by March 2015.

Thirty months on from the Fukushima disaster, such is the level of public concern about nuclear safety that the government is struggling to come up with a long-term energy policy - a delay that is having a profound impact on the economy and underlining just how costly a nuclear-power-free future may be.

People in the industry reckon Shikoku Electric Power's Ikata plant, Kyushu Electric's Sendai plant and Hokkaido Electric's Tomari plant are among those likely to be the first to re-start.

"There's talk the Abe administration is putting heavy pressure on the regulator (to re-start reactors)," said Osamu Fujisawa, a Japan-based independent oil economist. "It's obviously the economy the administration is after (rather than safety). Otherwise, the business community will look away, dealing an end to the Abe administration."