Japan’s energy foxtrot… Two steps forward one step back….

Japan's energy sector

“Two steps forward one step back…”

describes a frog struggling to climb out of a well, slipping back one step on the ladder for each two steps upwards out of the well…

Before the Fukushima disaster, Japan’s energy policy, strategy and execution were essentially decided behind closed doors by a small group of (about 100) Japanese people, and while European countries, Canada, USA experimented with electricity liberalization, Japan’s electricity industry structure went unchanged for a very very long time with a rigid top-down structure. However with the Fukushima disaster, Japan’s energy landscape has been brought onto the world stage, catching global attention for the first time.

Two steps forward (actually much more than two steps): Last Friday, September 14, 2012, Japan’s Cabinet released Japan’s new “Innovative Energy and Environmental Strategy”. We have analyzed the full Japanese text of this strategy paper, and you can find a summary on pages 5-23 in our “Japan Electrical Energy Landscape” report.

Most English language press reports focus only on the first few pages which describe a plan to phase out nuclear energy in Japan over the next 30-40 years. However this Government paper contains many other policy measures to reform Japan’s electricity industry and to completely change the principles of Japan’s energy landscape – steps which are long overdue, and where Japan has fallen behind most other advanced countries, because pre-Fukushima, Japan’s electricity industry was functioning “too well” – although at very elevated prices (for detailed analysis, read our report).

The strategy plan announced on September 14, 2012 has not yet created any irreversible facts – although two irreversible facts could soon be implemented: the Government announced a few days ago, that 3 nuclear power reactors should be decommissioned under the new 40-year-limit-rule, Tsuruga’s No 1 reactor (started March 1970), and Mihama’s No. 1 (started Nov 1970) and No. 2 reactors (started July 1972).

One step back: Sept. 19, the Cabinet released a “Kakugikettei” (Cabinet Decision) which is 4 and 1/2 lines long, which says:

We will carry out our energy and environmental policy based on the “Innovative Energy and Environmental Strategy” as decided by the Energy and Environment Council on Sept 14, however we will hold responsible discussions with concerned self-governing regional bodies of Japan and with concerned international organizations, and we will continuously and flexibly verify and adjust our policy. (Kakugikettei, Cabinet decision of Sept 19, 2012, our unofficial translation from bureaucratic official complex Japanese into simplified English, attempting to keep the same meaning).

Note, that this “step back” is not uniquely Japanese…. Sweden decided in the 1980s to go zero-nuclear with a Parliament approved schedule, and Sweden’s parliament reversed the earlier zero-nuclear decision, and went back to continue nuclear power in 2010 and renewing or building new nuclear power stations.

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