Energy costs in Japan: A presentation to diplomats from the 28 EU countries (+ Norway and Switzerland) given at the EU Delegation in Tokyo on Thursday 18 May 2017
How can you reduce your energy bills?
Energy costs in Japan, how to reduce energy costs, and the current energy situation in Japan post-Fukushima are inherently linked and are the topics of this talk given by Gerhard Fasol at the EU Delegation (EU Embassy) in Tokyo on Thursday 19 May 2017.
Electricity prices in Japan compared to EU countries. Electricity charges in Japan are about 40% cheaper than in Germany.
Energy costs in Japan: Even now, post-Fukushima, electricity costs in Japan are not particularly high, if Japan was a EU country, Japan’s electricity costs would be ranked at about 15th or 16th rank.
Japan’s electricity charges are about 40% cheaper than in Germany, and on a similar level as in France or UK.
Ireland c€59.01
Germany c€40.28
Spain c€37.26
Sweden c€36.11
Portugal c€33.41
Denmark c€32.78
Czech Republic c€31.92
Cyprus c€31.79
Austria c€29.88
Finland c€29.20
Italy c€26.61
Slovakia c€26.30
France c€25.09
Luxembourg c€24.29
Croatia c€23.10
Japan c€23
Slovenia c€22.68
UK c€20.19
Poland c€18.80
Hungary c€18.35
….
(source: Eurostat as of July 2013, energy costs in Japan: electricity costs for Japan are typical Tokyo household electricity charges)
Paradigm shift: redesign the electricity grid
We see a paradigm shift: we need to change how we think about energy. Our electricity supply system has been built over the last more than 100 years and many design principles have been decided 100 years and have then been frozen in, although they might not be the best choices any more in today’s world.
Traditional electricity grids are designed top-down, with large centralized power stations at the top, and a distribution system down to the end users.
This traditional hierarchical top->down integrated grid structure is globally in the process of reinvention. The different services:
generation
transport
grid frequency stabilization
distribution
are being split into separate businesses, and each one is being deregulated. In addition, the top-down structure is changed: renewable energy sources, micro-hydropower station and other sources feed electricity into the grid from the bottom-up, requiring changes in the design and management of power grids.
In Japan the traditional electricity grid has three hierarchical layers:
Special high voltage (特別高圧)
500kV, 270kV, 140kV
60kV
20kV
High voltage (高圧) 6kV
Low voltage (低圧) 200V, 100V
These three markets (1) Special high voltage, (2) High Voltage, (3) Low voltage, are approximately of equal size in Japan, and represent each about 1/3 of Japan’s electricity market. The (3) Low voltage market was deregulated on April 1, 2016, and the other two market sectors earlier. Up to March 31, 2016, 10 regional electricity operators had the monopoly in the retail (low voltage) sector of their regions. Since April 1, 2016, all markets are liberated and low voltage segment consumers are free to buy their electricity from a number of suppliers.
50Hz/60Hz
Electricity started in Japan in 1893:
The first generator in Tokyo was from the German firm AEG, and therefore 50Hz
The first generator in Osaka was from the US firm General Electric, and therefore 60Hz
Event today the west of Japan has 60Hz, while the east has 50Hz. Since semiconductor electronics enables frequency conversion, and since long distance transport is frequently DC anyway, this 50Hz/60Hz split is very unlikely to change.
AC/DC
For historic reasons, most electricity is delivered to end customers as AC (alternating current), however most consumption today is increasingly DC (direct current). e.g. LED lighting, computers and most IT equipment including data centers require DC electricity. Solar power plants also produce DC electricity. Battery storage also requires and delivers DC electricity. So we might see an increasing shift to DC electricity supplies.
How to reduce your energy bill
Energy costs in Japan: in the past urban design typically maximized electricity sales:
“All Denka” was a long-term campaign by Japan’s electricity industry to maximize the consumption of electricity
design model:
build the town in order to sell as much electricity/air-conditioners/gas as possible
top-down: huge nuclear power stations far away + top-down distribution system
single windows, save money on insulation
heating in winter, air conditioning in summer
In the future
communities, companies and household take responsibility of energy locally
“positive energy buildings”: buildings generate and sell electricity instead of consuming. Example: MORI-Roppongi Hills
THINK: Marunouchi & MORI Buildings: “we want to be so well prepared for disasters, that people don’t run from our buildings, but that people come to our buildings for safety”
take responsibility!
How to reduce your energy bill > earn money selling electricity
cut consumption
Insulate
buy low-energy equipment, e.g. air-conditioner, washing machine
fuel cells (e.g. Bloom (gas), or Enefarm, Panasonic) > off-grid
negotiate supply contracts, combine gas & electricity & phone/internet to get discounts
e.g. all three major phone companies (KDDI, Docomo, SoftBank) sell electricity, internet access etc + electricity. Combine: phone, internet, electricity to get discounts.
Nature governs energy – nature cannot be fooled
Today’s energy situation in Japan is directly a function of the outcome of the Fukushima-Dai-Ichi disaster.
To understand the reasons for why the Fukushima-Dai-Ichi disaster happened, it is necessary to go back in history, there is not one single reason for this nuclear disaster but many starting at the design decisions taken even before the construction started.
It is instructive to compare the situation of TEPCO’s Fukushima-Dai-Ichi nuclear power plant with Tohoku Electric Power’s Onagawa nuclear power plant:
TEPCO’s Fukushima-Dai-Ichi nuclear power plant: tsunami height = 13 meters, one of the worst nuclear disasters
Tohoku Electric Power’s Onagawa nuclear power plant: tsunami height = 13 meters: successful shut down without damage, served as a refuge for about 300 people from the neighborhood who had lost their homes in the tsunami and earthquake disasters
Why the difference?
TEPCO’s Fukushima-Dai-Ichi nuclear power plant: ground elevation was reduced from 35 meters to 10 meters to save cooling water pumping costs
Tohoku Electric Power’s Onagawa nuclear power plant: Yanosuke Hirai carefully research previous tsunamis, especially the Great Jogan Tsunami of July 13, AD 869, built 13.8 meters above sea level
A few days after the Fukushima-Dai-Ichi disaster, US President Obama sent 150 top nuclear engineers to Japan for 11 months to assist directly the Japanese Prime Minister and the Japanese Government and TEPCO to mitigate the nuclear disaster. The Leader of this team of 150 US nuclear experts was Chuck Casto, who I invited two times to talk at the Ludwig Boltzmann Forum events. Read Chuck Casto’s explanations of the Fukushima Disaster here:
I also invited the Kiyoshi Kurokawa, the former Chairman of Japan’s Parliamentary Commission into the Fukushima Nuclear Disaster, to speak at the Ludwig Boltzmann Forum:
Kiyoshi Kurokawa: “Groupthink can kill” (6th Ludwig Boltzmann Forum 20 February 2014)
Summary
Nature governs energy, and nature cannot be fooled (Richard Feynman)
Global trend: reengineering the grid. Localize, democratize, liberalize, deregulate
Renewable energy: wind power can cover all of Japan’s energy needs (in principle)
Energy, electricity and gas market liberalization is going ahead
This morning 7:30am I was interviewed on BBC TV Asia Business Report about an update of Toshiba’s ongoing crisis, which has been 20 years in the making.
Here some notes in preparation for my interview.
What is Toshiba’s situation now?
Toshiba’s market cap today is YEN 1024 billion = US$ 9.6 billion.
Toshiba is expected today to announce write-off provisions on the order of US$ 6 billion.
Toshiba owes about US$ 5 billion to main banks as follows:
Mizuho YEN 183.4 billion
SMBC YEN 176.8 billion
Sumitomo Mitsui Trust Holdings YEN 131.0 billion
BTMU YEN 111.2 billion
Total YEN 602.4 billion = US$ 5.3 billion
Toshiba is on notice for delisting by the Tokyo and Nagoya Stock Exchanges, and faces the risk of being delisted by March 15, 2017, i.e. in about 4 weeks from now.
Toshiba is trying to raise capital e.g. by seeking investment in the IC/flash memory division, however, Toshiba seeks to keep control, so Toshiba is trying to raise a minority share, or non-voting shares or similar, in order not to lose control.
How did Toshiba get into a situation to potentially need to write off US$ 6 billion?
Toshiba acquired 87% of the US nuclear equipment manufacturer Westinghouse.
While Westinghouse is a famous name, what Toshiba actually acquired seems to have gone through a period of restructuring.
In 2015 Toshiba acquired the construction company SHAW’s assets from the Chicago Bridge & Iron Company CB&I for US$ 229 million plus assumed liabilities. CB&I had acquired SHAW for US$ 3.3 billion in July 2012, and SHAW has on the order of US$ 2 billion annual sales.
Why did Toshiba acquire a company for US$229 million, which has US$ 2 billion annual sales, and which was in 2012 acquired for US$ 3.3 billion? Which factors reduced the value of this company from US$ 3.3 billion to US$ 229 million within the 3 years from 2012 to 2015?
Presumably because there are large liabilities arising from nuclear construction, which Toshiba now seems to have to assume.
What is likely to happen now with Toshiba? Is Toshiba too big to fail?
Difficult to say what will happen. Toshiba is a huge corporate group with about 200,000 employees and many factories in many countries, so clearly Toshiba is not going to disappear without trace.
The immediate risk is that Tokyo Stock Exchange carries out its warning, and delists Toshiba, which will further increase Toshiba’s ability to raise capital. In the case of a delisting, private equity, and/or government might invest and restructure, and Toshiba might be split up. For example, Toshiba’s nuclear Westinghouse division is totally separate from its very successful flash memory division, there is not much business logic in having both under one holding company.
Impact on UK
Toshiba acquired 60% of UK based NuGeneration with the view to build nuclear power stations in the UK. This project requires Toshiba to contribute to the funding of the nuclear project, for which Toshiba would probably need a financially healthy partner.
What is the big picture? How did Toshiba get into this crisis?
Toshiba’s crisis has been building up for 20 years, and is in my view a consequence of corporate governance issues over a long time.
Essentially, Toshiba should have been reformed 20 years ago from the top down.
Japan’s 8 electronics giants have had essentially no growth and no profits for 20 years. This tragedy has been obvious for many years now, and was a big contributing factor for Japan’s government to reform Japan’s corporate governance laws and regulations, see:
Toshiba’s Board of Directors was exchanged in September 2015, and now includes several very capable and experienced Japanese independent Board Directors, but unlike Hitachi, even today neither Toshiba’s Board of Directors, nor Toshiba’s Executive Board include one single foreigner.
One might think that a huge global group like Toshiba with complex businesses around the globe might benefit from a variety of view points and experiences from different countries at Supervisory Board and Executive Board level – not all just from one single country. Japanese corporations including Hitachi, SoftBank, Nissan and a small number of others are now recognizing the benefits of diversity of experience and viewpoints at Supervisory Board and Executive Board level.
We can only hope that Toshiba’s executives and Board Directors have the experience and ability to solve the extremely complex issues deep inside the bowels of the US nuclear construction industry – far away on the other side of the world.
German Federal Chancellor Angela Merkel in Japan March 9-10, 2015
Hopes for Japan and Germany share at least part of the path to renewable energy
Germany’s Federal Chancellor Angela Merkel, Physicist with a PhD (Chancellor Angela Merkel’s PhD thesis is available here) and several scientific publications to her credit, visits Tokyo today Monday 9 March and tomorrow Tuesday 10 March 2015.
Angela Merkel’s official interview preparing for Japan visit
In the official interview commenting on her Japan trip (watch on YouTube here), Chancellor Merkel says: “Wir setzen jetzt sehr auf erneuerbare Energien. Und ich glaube, Japan sollte auch diesen Weg gehen – und geht ihn ja auch. Und wir sollten ihn vor allem in Deutschland und Japan auch ein Stueck zusammen gehen. Das heisst, ich werde dort auch ueber den Ausbau erneuerbarer Energien sprechen.”
Our translation to English: “We put much emphasis on renewable energy now. I think Japan should also go along this path – and indeed goes along this path. We should proceed on this path at least partly together. This means, I will talk about the expansion of renewable energy during my Japan visit.”
Report: Energy efficiency – opportunities for Japan and Europe
The Konrad-Adenauer-Stiftung, a German public policy think-tank financed by German Government funds, recently organized conferences on Energy efficiency in Tokyo, Kyoto and Kobe, and engaged our company to produce a report on “Energy efficiency – opportunities for Japan and Europe”.
The trick of course is the third arrow, the reforms. Read what Professor Takeo Hoshi has to say about Abenomics, Japanese economist, who has worked his way up US Universities, and has now reached the position of Professor of Economics at Stanford University. By the way, here is my talk at Stanford University – some years ago, but much of it still applies today.
Japanese people’s views on nuclear power are polarized, and its unclear and unpredictable when nuclear power stations will be switched on again in Japan. Read what the Governor of Niigata Prefecture has to say, who hosts the world’s largest nuclear power plant with 7 reactors and 8 GigaWatt capacity.
According to the Japanese Energy Fundamental Law, the Government has to publish an official Energy Basic Plan at regular intervals. You can read the 4th Energy Basic Plan published on April 11, 2014, and listen to a commentary on it for The Economist here on YouTube. The 4th Energy Basic Plan starts with the assumption that Japan is poor in natural energy resources, which of course is only true if we restrict “natural energy resources” to fossil resources. Japan is actually potentially very very rich in renewable energy sources, as the scenario plans developed by Japan’s Industry and Economy Ministry (METI) and Japan’s Environmental Ministry show.
Foreign companies in Japan, and Japanese companies overseas face a dilemma: expensive expatriates with limited local know-how, or local management? Japanese companies seem to have finally reached the conclusion that Japanese managers eg sent to Germany are in most cases not the best choice to lead a German-based multinational company – here are some great recent examples:
Docomo acquires a majority stake in net mobile AG, however net mobile AG remains a publicly listed company. Read details here.
NTT DATA acquires SAP solution provider itelligence AG, however itelligence AG remains an independently managed company under the founder’s management, and grows aggressively via acquisitions all over the globe. Read details here.
NTT Communications acquires a majority of Integralis, Integralis is renamed NTT Com Security AG, however NTT Com Security AG remains traded on the m:access market of the Munich Stock Exchange. Read details here.
Carlos Ghosn is very well aware of such multi-cultural management issues and how to solve them, however too many EU companies in Japan are not. If they were, EU investments in Japan could be at least 50% higher – as you can read here.
Governor Hirohiko Izumida: “Nuclear power operating companies should have their headquarters at the nuclear power plant in order to immediately take responsibility and respond.”
On October 15, 2014, Governor Izumida in his official role, explained a long list of detailed safety concerns, and a list of necessary changes in legislation and emergency command regulations in order to ensure nuclear safety. These safety concerns include the reduced responsibilities of the new Japanese Nuclear Regulatory Commission (NRC), which limits its responsibility to technical issues, and shies away from the broader issues of nuclear accident management, in particular, IAEA’s fourth level and fifth level of defense-in-depth. Governor Izumida demands a full investigation of the Fukushima nuclear disaster which should address who is responsible, and in particular also why the knowledge of the meltdown was hidden for more than two months.
decision making during crisis, e.g. seawater flooding of a reactor in risk of meltdown. Salarymen including Presidents of companies are not equipped for such serious decisions during crisis.
emergency response under high radiation. Revision of labor laws is necessary. Immediate response team needs to be created.
Safety concerns regarding evacuation policies
unification of legal systems: natural disaster response and nuclear disaster response needs to be integrated, and two-tiered command structure needs to be unified
decisions of nuclear disaster response needs to be reformed
insufficient response for sheltering in place when evacuation is impossible
current regulations for the distribution of Iodine tablets are impossible to implement. Need for realistic regulations which can actually be implemented in case of disaster.
Disaster response under high radiation levels: reform of labor laws necessary. Need to clarify hierarchy and issue of orders during emergency. Must review laws for command structure, responsibility and compensation.
Other concerns: screening and decontamination, safety of assets in evacuation areas, nuclear disaster prevention system.
Safety concerns regarding TEPCO
Inadequate investigation and review. No one has taken responsibility for the Fukushima accident. TEPCO has not explained who was responsible for the 2 months delay in acknowledging the meltdown.
Economic issues are given priority over safety. TEPCO should have their headquarters at the nuclear power station in order to immediately take responsibility and respond.
Kashiwazaki Kariwa Nuclear Power Station (柏崎刈羽原子力発電所)
Kashiwazaki Kariwa Nuclear Power Station is located about 220km from Tokyo, in Niigata-ken in the village Kariwa (刈羽村) near the town Kashiwazaki (柏崎市), and about 80km from the Niigata Prefecture capital Niigata-shi. Niigata Prefecture has about 2.3 million population.
At the time of this article, the Kashiwazaki Kariwa Nuclear Power Station, as all other Japanese nuclear power stations, is completely switched off, and the time of a potential restart of any of its seven reactors is unclear.
The Heisei 19 (2007) Chuetsu Offshore Earthquake” (平成１９年新潟県中越沖地震)
The Heisei 19 (2007) Chuetsu Offshore Earthquake” (平成１９年新潟県中越沖地震)
The Heisei 19 (2007) Chuetsu Offshore Earthquake” (平成１９年新潟県中越沖地震) took place on July 16, 2007 at 10:13am of magnitude 6 on the Japanese Shindo-Scale, and caused fires and a number of other worrying defects at Kashiwazaki Kariwa Nuclear Power Station.
Lessons learnt and implemented from the fires and other defects caused by the 2007 Chuetsu Offshore Earthquake at the Kashiwazaki Kariwa Nuclear Power Station
Hirohiko Izumida was Governor of Niigata at the time of the 2007 Chuetsu Offshore Earthquake on July 16, 2007. The Kashiwazaki Kariwa Nuclear Power Station was about 20km from the epicenter, the ground at the Nuclear Power station dropped about 1.5 Meters leading to a fire of the transformer at the nuclear reactor Unit 3.
Due to the damage caused by the earthquake, Niigata Prefecture Government had no communication link to the Kashiwazaki Kariwa Nuclear Power Station, all we could do was to follow the fire on public television. There had been a hotline, but it was not secure, and because of the dropped land, the entrance door to the building containing the hotline connection became warped and the hotline became unaccessible at the nuclear power station.
Land dropped by 1.5 meters and distorted pipes which caused the fire. We are concerned that similar damage could render the venting tubes dysfunctional.
Governor Izumida insisted that a seismically secure communications building and hotline should be built at Kashiwazaki Kariwa Nuclear Power Station and also at other nuclear power stations including the Fukushima Nuclear Power stations.
We requested TEPCO very strongly to build a secure building for a secure hotline between the Nuclear Power Station and the Prefectural Government Office. Initially, TEPCO rejected this request, because at that time such a hotline was not required by regulations, and Governor Izumida was told that it should be sufficient to use mobile phones for emergency communications (note that Japan’s mobile phone networks were largely out of service for several days after the March 11, 2011 Tohoku earthquake).
Governor Izumida insisted that a seismically isolated building for a hotline and a secure hotline be built, and because of the strong instance this hotline was built. Governor Izumida also insisted that the same type of secure communications buildings and hotlines should be built at other nuclear power stations including Fukushima Dai Ichi. The secure communications building and hotline at Fukushima Dai Ichi was only completed 8 months before the March 11, 2011 earthquake.
Governor Izumida feels, that if he had not insisted on the construction of secure communications buildings and hotlines at Fukushima and Kashiwazaki-Kariwa nuclear power stations, there might be no-one living in Tokyo today.
Governor Izumida demands improvement of fire fighting infrastructure at nuclear power stations.
At the 2007 Chuetsu Offshore Earthquake the underground emergency water supply lines were destroyed, and the fire fighting forces could not help and had to leave the nuclear power plant. We insisted on improvements of the fire fighting infrastructure.
Governor Izumida has grave concerns on the current work of the Nuclear Regulatory Commission (NRC)
We have grave concerns on the Nuclear Regulatory System today, as the Fukushima accident has not yet been fully investigated. Therefore it is not yet possible to draw all necessary lessons from the Fukushima disaster for the necessary new nuclear regulatory system.
We believe that the current Nuclear Regulatory Commission (NRC) is shrinking its responsibility: we believe that the current Chairman Tanaka of the Nuclear Regulatory Commission is restricting his responsibility to a narrow range of technical issues, and withdrawing from his responsibilities for the wider safety issues.
The law says, that the Nuclear Regulatory Commission “must ensure the safety of the usage of nuclear power”. Governor Izumida thinks that the current commission and it’s Chairman Tanaka is not fulfilling this obligation to ensure the overall safety, and instead focuses only on a limited range of technical issues.
Insufficient support for “defense-in-depth” recommended by the IAEA: NRC does not take responsibility for the Fifth Level of IAEA defense-in-depth
The International Atomic Energy Agency (IAEA) recommends a system of “defense-in-depth“, which includes mitigation of nuclear accidents in different levels.
IAEA levels of defense-in-depth:
First level: Prevention of abnormal operation and failures
Second level: Control of abnormal operation and detection of failures
Third level: Control of accidents within the design basis
Fourth level: Control of severe plant conditions including prevention of accident progression and mitigation of severe accident consequences
Fifth level: Mitigation of radiological consequences of significant off-site releases of radioactive materials
Fifth Level response is absent – NRC needs to build fifth level response
Governor Izumida: The current Japanese Nuclear Regulatory Commission essentially does not take any responsibility at all for the fifth level of the response in depth recommended by the IAEA, and in case of the Fourth Level
Fourth Level response is insufficient – NRC needs to expand fourth level response
Governor Izumida: the current Japanese Nuclear Regulatory Commission restricts its responsibilities to hardware issues and does not touch on operations.
Insufficient support for municipalities
The communication between Japanese Nuclear Regulatory Commission (NRC) and the local authorities is totally inadequate, basically the NRC does not listen to us directly, although we – the local Government authorities – have to take care of the local population when an accident occurs.
Insufficient preparations for the case of a nuclear accident
Other countries are taking very detailed preparations for the case of nuclear accidents or melt-downs: for example European countries are requiring core catchers, and the US has centralized response forces. Governor Izumida feels that in Japan preparations are totally insufficient and need to be much improved.
“Salarymen” employees, including company Presidents, in case of a melt-down are not equipped to take necessary decisions for example to inject sea water for cooling, which is certain to destroy a US$ 5 billion investment
Current decision making processes and legal frameworks are totally insufficient for the case of nuclear accidents.
To be specific, at the time of the Fukushima Nuclear disaster on March 14th – 15th, TEPCO employees could not make the necessary decision quickly enough to pump seawater into the Fukushima nuclear power station.
“Salarymen” employees, even if they are Presidents of companies, are not equipped to take decisions which destroy equipment which represents US$ 5 billion (YEN 500 billion) investment, as injecting seawater for cooling as in the case of Fukushima Dai Ichi. We need regulations to take necessary decisions quickly.
A further problem is that when private company employees work at the nuclear accident location, they are governed by the common labor laws, so they cannot be forced to work at dangerous high-radiation locations. This also needs to be solved.
Command structure currently leads to confusion in case of nuclear accidents
With the current legal framework in Japan, in the case of a natural disaster, the State Minister in charge of disaster prevention sets up Disaster Headquarters.
In the case of a nuclear disaster however, the Head of the Nuclear Regulatory Agency sets up its own Disaster Headquarters. So if we have a natural disaster and a nuclear disaster concurrently, as in the case of Fukushima, we have two competing Disaster Headquarters, which leads to great confusion.
In the case of natural disasters, the local authorities can issues evacuation orders. However, in the case of a nuclear disaster, the Prime Minister gives the evacuation orders – again a reason for inconsistencies and confusion.
Also the provisions for people who cannot evacuate for health or other reasons is inadequate.
Many current regulatory provisions are impossible to implement
As an example, according to the standards by the NRC for nuclear accidents, the population within a 5km – 30km radius needs to be sheltered in-doors, in the case of Kashiwazaki-Kariwa this population is about 440,000 people. According to current regulations, Iodine tablets need to be distributed after the accident occurs. If venting becomes necessary 8 1/2 hours after the accident, this means that current regulation requires that Iodine tablets must be distributed to 440,000 people within 8 1/2 hours. The medical association tells us that it is impossible to distribute Iodine tablets to 440,000 people within 8 1/2 hours.
It is one thing to create regulations on paper, but Governor Izumida asks the NRC to create regulations which can actually be implemented.
Q&A
Q: How can the NRC reduce its responsibilities by itself, while these responsibilities are surely fixed by the relevant laws?
A: The law says very clearly that the NRC is responsible for ensuring the safety of nuclear power. I feel that the Chairman of the NRC Tanaka is reluctant to meet with the local authorities, and I think only recently has he started to talk to TEPCO, probably following pressure. Mr Tanaka is a teacher, a Professor of nuclear technology, so I believe that he is focusing to much on the technical issues, focusing on the nuclear technology, and that he neglects the wider issues of safeguarding the lives and assets of the people.
Q: What you are saying sounds very obvious and common sense. Why does nobody else except you speak out clearly about these issues?
A: I think there are two reasons:
1. I had first hand experience as Governor of the 2007 fire at the Kashiwazaki-Kariwa Nuclear Power Station caused by the 2007 Chuetsu Offshore earthquake,
2. As Governor of Niigata I was deeply involved from the beginning in the Fukushima Dai Ichi nuclear accident, I heard all the communication and information from the Fukushima nuclear power station, the Government and TEPCO and experts.
Therefore I have direct experience with nuclear accidents, and know which developments are likely to happen. I can imagine which sequence of events are likely to occur as a consequence of nuclear accidents. Therefore I can speak with confidence.
I should also say that some of the points raised are not just points raised by Niigata Prefecture. There is an Organization of Governors of those Prefectures where nuclear power stations are located. Many of the points I have raised are shared by all Governors of Prefectures with nuclear power stations. No-one in this organizations has raised objections to the points I am raising.
Q: NRC Chairman Tanaka says that Japan now has the world’s strictest safety regulations. Is this true?
A: I am the Governor of Niigata Prefecture, therefore all my statements refer primarily to the safety of the Kashiwazaki-Kariwa Nuclear Power Station in my prefecture.
The new Nuclear Safety Standards of Japan do not include any provisions at all regarding the fifth level of the “defense-in-depth” recommendations of the IAEA, and in case of the fourth level they do not go deep enough at all. Therefore my conclusion is that Japan’s new Nuclear Safety Standards are not the strongest in the world.
Q: Do you think that concerns about nuclear accident mitigation plans and evacuations plans are holding back the restart of nuclear power plants in Japan? A: My primary mission as Governor is to safeguard the safety, lives and assets of the citizens of our Prefecture. TEPCO knew from very early on that a nuclear meltdown occurred at Fukushima Dai Ichi, yet TEPCO hid this fact for more than two months. If an organization does not reveal the information about something that serious we cannot make any reasonable evacuation plans. To make evacuation plans we need to have reliable information about the actual situation. We have to ask the question whether an organization that hides the truth can even have the right to operate a nuclear power plant. The first step needs to be to thoroughly investigate the Fukushima Disaster and to determine where the responsibilities lie. Before we have such an investigation we cannot even think about restarting nuclear power plants.
Q: Don’t you think that nuclear power has any positive points? Are you saying there are zero benefits in operating nuclear power stations? A: My responsibility as Governor of Niigata is for the safety and lives of the citizens of Niigata, and I am speaking in my official capacity as Governor of Niigata. Therefore all my comments about restarts are limited to Kashiwazaki-Kariwa nuclear power station and TEPCO. It is not my responsibility to talk about the general issues of what Japan as a country should do about nuclear power.
Regarding Kashiwazaki-Kariwa nuclear power stations and TEPCO my position is very very clear.
However, regarding TEPCO, TEPCO hid the crucial information of the nuclear meltdown for two months. My question is whether such an organization has the right to operate nuclear power stations at all. Before this question is not addressed, I cannot enter into any discussions about restarting the Kashiwazaki-Kariwa nuclear power station.
Q: Don’t you think seven nuclear reactors in one location are too many? In Germany only two reactors are permitted at one location.
A: This question has also been raised by our population. However among experts we hear differing opinions. We need to look not only at technical issues, but also at management structures. Therefore at our Prefectural Government we have formed a committee of experts and we are investigating this and other safety questions in detail.
Hirohiko Izumida, Governor of Niigata Prefecture talks about nuclear safety – watch on YouTube:
Hirohiko Izumida, Governor of Niigata Prefecture
Nuclear safety – Governor of Niigata Prefecture Hirohiko Izumida comments on his experience with the world’s largest nuclear power plant Kashiwazaki-Kariwa
Hirohiko Izumida (泉田裕彦) is the elected Governor of Niigata-Prefecture, elected by the people of Niigata. He assumed office on October 25, 2004, two days after the Niigata Chuetsu Earthquake.
Governor Izumida was born on September 15, 1962 in Kamo, Niigata Prefecture
March 1987, graduated from the Law Department of Kyoto University.
April 1987, entered Ministry of Economics and Industry METI, energy resources bureau
June 1994, visiting researcher at the University of British Columbia.
June 1998, Prime Minister’s Office
July 2001, Land and Transportation Ministry
November 2003, Head of the Gifu Prefecture Industrial Labor Bureau
October 2004, elected Governor of Niigata Prefecture
Dr Charles Casto: the Fukushima disaster changed my life. We cannot let this happen again anywhere in the world.
Dr Charles “Chuck” Casto: leader of the US Government response to the Fukushima Dai Ichi Nuclear disaster
When President Obama expanded the Operation Tomodachi to include the nuclear disaster, Dr. Charles Casto was selected to lead the US Government response.
First time, where a first world country assists another first world country in a major crisis
We are very good at providing humanitarian support from first world countries to second or third world countries.
However, it is unprecedented for a first world country to assist another first world country in a crisis of this magnitude. The Fukushima Dai Ichi Nuclear crisis is without doubt the most serious international crisis we ever had in peace time. How do we respond to first world to first world crisis?
How do we respond in a prolonged “nat-tech” (natural – technology) disaster in a first world country?
Need for protocols and frameworks for information flow in case of large scale first world disasters
Dr Casto feels there is a need to establish international protocols and frameworks for information exchange and cooperation in the case of this kind of large scale disasters.
Time lost: It took 10 days until an understanding and a framework for the exchange of information was established
In this case there was much information missing, information was “unknowable”, since the reactors were unaccessible. Big disconnect in the availability of data.
No one engineer had all the information. Sources of information were unfamiliar. It was necessary to go high enough in the administration to understand the situation. It took about 10 days to establish an understanding
Kantai meetings started on March 21st, 2011 – about 10 days after the start of the disaster, until a framework for understanding the disaster was established and a rhythm for the exchange of information.
Speed of the response must be at least as fast as the speed of the accident evolution. Achieving sufficient speed is a challenge for Governments. Governments tend to be too slow.
Five crisis caused the Fukushima Dai Ichi accident:
Earth quake
Tsunami
Nuclear event
Societal crisis
Policy crisis
To understand the Fukushima disaster and in order to solve and to respond it is necessary to analyze all these five crisis.
Fukushima Dai Ichi: A system breakdown, an organizational accident, imbalance of power.
It is necessary to understand the balance of power, the history of how the electricity industry developed over time, and how nuclear industry was established in Japan.
Most expertise rested in the hands of the 9 utilities, giving all power to the utilities. This imbalance of power is a major component of the accident.
Unless all five crisis are addressed and solved, including the societal crisis and the policy crisis, nuclear power is unlikely to start again in Japan.
Need to share responsibility.
Today most power and responsibility is with the regulator. However, it is necessary to share power and responsibility between regulator, Government, and the utilities.
It needs to be clear that the utilities are responsible for safety.
Need for national dialogue on how much risk the people of Japan are willing to accept.
Elected officials need to have a national dialogue to understand which level of risk the people of Japan are willing to accept. Only the people can decide.
The level of acceptable risk needs to be determined by the elected officials in dialogue with the people, that level of acceptable risk needs to be set in law, and then the regulator needs to regulate to this level of acceptable risk. It is not the role of a regulator to determine the level of acceptable risk.
If the national dialogue results in the result that no level of risk is acceptable, then there will be no nuclear power operating.
The Government needs to prove to the people that Fukushima Dai Ichi can be resolved.
The regulator needs to address emergency planning in dialogue with the population.
We cannot permit another accident like Fukushima Dai Ichi happen anywhere else in the world again.
When traveling through the evacuated zone around Fukushima Dai Ichi, it is clear that we cannot ever let such an accident happen anywhere else again in the world.
We have to learn about the science of nuclear energy. I want the Fukushima disaster to be treated in science books – not just in history books. We need to understand the science of nuclear power.
Q & A
Q: Do Mr Yoshida’s notes show that operating a nuclear power plant in emergency is too difficult to handle for humans?
A: We need an incident command system to be bigger than the crisis. Such an accident is too big for one single person. No one single person can have all the knowledge required for such a disaster.
Q: Are six or seven nuclear reactors at one single plant too much for one single plant manager?
A: Dr Casto worked several years on a three unit site. We should treat each reactor individually. We should have six or seven leadership structures for each reactor, and then one overall leader.
Q: Were we lucky that the disaster occurred on a working day, rather than on a weekend?
A: We need a command system that is of sufficient size. If we have more people than this its good, but we cannot have less than the sufficient size to respond to the accident.
Q: Prime Minister Naoto Kan has been under heavy criticism. Do you think if Abe and the LDP would have been in power, that the crisis management would have been better?
A: Without doubt the response would have been different with different leaders in charge. The difference I saw in Japan compared to other countries: in all other countries we have independent Government people at the site of the nuclear power station, who will be at the control room, and work independently for the Government. One of the issues of Prime Minister Kan was, that he did not have any independent source of information, he had to use other organizations, and he felt that he did not have a reliable source of information. It is necessary to flatten the organization. The people at the top need to be able to talk to the people on the location of the accident.
Q: With the reactors being US designed, did US teach Japan enough about disaster response?
A: We need to look at the evolution of nuclear technology and security over the years since the first introduction. In the US a huge amount of regulations was created since the beginning of nuclear power in response to Three-Mile-Island and other accidents. However in USA maybe we have too many layers of regulation now. Adding more and more layers of regulations does not necessarily improve safety.
Q: What could have been the worst case scenario?
A: I believe that after the first week the worst was over, when the water was cooling the cores I thought we had overcome the worst. So after March 15th maybe the worst point was overcome. Also there is not a linear relation between the number of reactors and the created damage. The radiation damage depends on wind, weather and many other factors. Overall I underestimated the severity of the accident initially.
Q: What did Japan do right?
A: Yoshida-san was absolutely right to inject sea water. Injecting sea water was key to mitigating the ultimate outcome of the disaster.
Q: What did Japan do wrong?
A: The isolation of the plant from the outside was wrong. The Fukushima Dai Ichi plant become more and more isolated as the accident progressed, and had to rely on their own resources. McArthur said – most failures in war time can be summed up in two words: “too late”. Not reacting fast enough, and not getting resources to the site in time.
Q: What have we learnt from the Fukushima disaster?
A: We learnt to make plants more resilient. We need the plants to be resilient for 72 hours, so that the national Government has time to bring in additional resources from distant locations.
In the USA we have established FLEX: two locations in the USA with massive amounts of equipment, which can be flown into the site if there is a significant problem. We have checked in advance that the equipment fits into the airplanes and can be transported properly. We need sufficient equipment available, but far enough away, so that it is not destroyed by a disaster at the site, as in the case of Fukushima.
Q: Japan’s Government says that today’s safety regulations are the highest in the world. Do you think this is true?
A: I think this is likely to be true for the technical aspects of the regulations – but I have not checked this in detail. However, the society issues and emergency planning, evacuation plants, sheltering plans are equally important. Maybe technical people are less interested in these societal aspects, but we need the policy and societal side in case the technology side fails. We cannot neglect the society and policy issues (crisis four and five above).
Q: What about the command structure?
A: I think for the initial 10 days the command structure was unclear, but was unified after the first 10 days from March 21st. Then we started the bilateral US-Japan meetings, and that also solidified the command structure.
Q: What do you think about Prime-Minister Naoto Kan’s helicopter visit to Fukushima Dai Ichi?
A: If I was in place of Prime Minister Naoto Kan, who did not feel he got reliable information, if I am the commander and don’t have anyone I trust on the site, I would also go and look.
I talked with Governor Thornberg of Three-Mile-Island: for him the lesson learnt was to “anchor the facts”. He interrogated the facts, and he interrogated the people who brought the facts. “Anchoring the facts” was why he succeeded in the Three-Mile-Island. A major leadership lesson learnt is that you need to understand the facts.
Q: How many experts did US send, and how did they help?
A: US Government brought in 150 US experts, the best 150 people we have in the USA in the nuclear industry, and we had regular meetings of about 30-40 US experts with the Japanese cabinet every day starting with March 21st, 2011.
Q: There are rumors that TEPCO wanted to withdraw completely from Fukushima Dai Ichi?
A: I don’t know the answer, maybe no-one knows. But I am sure there would have been sufficient protection and resources at Fukushima Dai Ichi to deal with the accident. Currently there is an enormous effort with large resources to deal with the accident, and there is much progress.
I believe that Yoshida-san at Fukushima Dai Ichi, and Masuda-san at Fukushima Dai Ni with their teams did an outstanding job given the situation and given the resources they had.
Q: Are you pro-nuclear?
A: I am not pro-nuclear, I am not anti-nuclear. I am pro-safety. Every human activity including nuclear energy has risk. Coal has risk. Gas has risk. The people need to decide what level risk they want to accept. If the people decide they want nuclear power, then I can help to make nuclear power safe.
Direct communication between Government, nuclear plant operator and population is required. In Three-Mile-Island the population found out about the nuclear accident because journalists overheard a walkie-talkie conversation at the plant, and the Chernobyl disaster was found out via Sweden. Why not establish a direct information link between the nuclear power plant and the population via mobile phones?
Dr. Charles “Chuck” A. Casto
Japan nuclear energy restart: former leader of US Nuclear Regulatory Commission (NRC) efforts in Japan explains lessons learnt from the Fukushima disaster
Charles Casto was leader of the US Nuclear Regulatory Commission (NRC) delegation supporting the Japanese Government during the initial 11 months of the Fukushima nuclear disaster, and to ensure the safety of US citizens in Japan during this period. For this work he was awarded the Presidential Distinguished Services Award in 2012. He is Regional Administrator for the Region III of NRC overseeing the nuclear regulation in Iowa, Illinois, Indiana, Michigan, Minnesota, Missouri, Ohio and Wisconsin, where he has regulatory responsibility for 23 reactors and a large number of other users of radioactivity. Previously Dr Casto has served many years as certified Reactor Operator and Instructor, and in many other leadership positions in the US nuclear industry.
Charles A. Casto: “Crisis management: A qualitative study of extreme leadership“, (2014), Dissertations, Theses and Capstone Projects. Paper 626. A Dissertation
presented in partial fulfillment of the requirements for the Degree of Doctor of Business Administration in the Coles College of Business, Kennesaw State University
Electricity storage is crucial for the efficient use of renewable energy, especially solar and wind
Japan plans to build world’s largest storage battery testing laboratory
Wind farms and solar plants deliver electricity not continuously, but output depends on weather, wind and solar illumination conditions. Battery storage technology is necessary to store solar electricity produced during the day for usage during night hours when the sun does not shine.
Storage battery testing laboratory planned
The Japanese Government is planning to build the world’s largest testing laboratory for batteries up to a capacity of 2 Giga Watt hours, largest in the world. Planned investment is on the order of YEN 13 billion (US$ 130 million).
The purpose is to develop and test battery storage systems for integration with renewable energy generation systems such as solar plants and wind farms
Japan biomass electricity generation approaches 4 GigaWatt
Renewables in Japan is not just solar…
Looking superficially at Japan’s renewable energy sector, its easy to overestimate geo-thermal energy, and to underestimate biomass.
Biomass electricity generation capacity is about 5 times higher than geo-thermal
Biomass electricity generation capacity in Japan approaches 4 GigaWatt
Currently the installed biomass electricity generation capacity is about 5 times higher than for geo-thermal energy production – a fact often overlooked in superficial discussions.
Biomass electricity production is included in Japan’s new feed-in-tariff program which started in July 2012, and is also very generous.
The figure above shows approvals for electricity generation projects from biomass under the new feed-in-tariff program, and demonstrates that after a slow start, approvals are now picking up. The sum of biomass generation facilities operating before the introduction of the new feed-in-tariffs plus approvals since July 2012 approaches 4 GigaWatt, which corresponds approximately to the generation capacity of 4 nuclear reactors.
Understand Japan’s renewable energy
Our report on Japan’s Renewable Energy Sector (pdf file, approx. 219 pages)
Solar Japan: some of the world’s most attractive feed-in-tariffs
In the single month of March 2014 Japan approved almost as much renewable energy projects as all solar ever installed in Germany
Japan’s ten regional electricity monopoly operators traditionally kept renewable energy below 1% following an unwritten rule. Tokyo Electric Power Company (TEPCO) kept renewable well below this magic 1% limit – until recently TEPCO’s renewable energy ratio was about 0.05%, slightly “greener” than Kansai, and Shikoku Electrical Power Companies with 0.03% renewables, and Chugoku Electrical Power Company with 0.02% of renewables in their energy mix.
Complete reversal of Japan’s previous “no renewables” strategy
Switching off all nuclear power stations combined with extremely high natural gas (LNG) prices forced change of this “no renewables” strategy in Japan, and Japan quickly moved in the opposite direction with some of the highest feed-in-tariffs globally, about three times higher than in Germany. (To understand the details of LNG costs and prices for Japan, read our Japan Energy Report, where you’ll find month-by-month data of Japan’s coal and gas payments, as well as the price developments and the reasons for the extraordinarily high prices Japan pays for LNG and LPG).
Driven by high LNG costs Japan approves almost as much solar energy projects in a single month as ever installed in Germany
Solar plants ever installed in Germany total about 36.5 GigaWatt – Japan almost approved as much renewables in the single month of March 2014
Germany’s Federal Network Agency (Bundesnetzagentur) published detailed data of solar energy projects installed and approved for subsidy in Germany. As of May 31, 2014, all solar power ever installed and approved for subsidy in Germany amounts to 36.5 GigaWatt (peak). The figure above shows that Japan’s Industry Ministry METI approved about 26.7 GigaWatt of solar projects under the feed-in-tariff program during the single month of March 2014 alone.
Here are the actual figures of renewable electrical power projects approved by METI under the FIT program during the single month of March 2014 alone:
solar projects less than 10kW: 159,070kW = 0.16GW
solar projects over 10kW: 26,521,483kW = 26.5GW
Subtotal solar (all sizes): 26,680,553kW = 26.7GW Total all types of renewable energy: 27,436,598kW = 27.4GW
The figure also shows that March 2014 is somewhat an anomaly – because feed-in-tariffs are reduced each year on April 1 at the beginning of the new financial year, METI cooperates with applicants to approve large numbers of applications during the last month of the previous tariff. Thus renewable project applications in Japan have developed an annual rhythm.
We find that each of Japan’s electrical power companies has its own particular circumstances, and some are coping better than others, while of course Tokyo Electric Power Company is a special case due to the incalculable costs of the Fukushima nuclear accident, and due to possible changes in case of a change of Japanese Government policy regarding TEPCO.
Our financial analysis shows, that revenues of Japan’s electricity sector have increased substantially, due to increased electricity costs. On the other hand, revenues of Japan’s electricity companies overall have been declining steadily since a peak around 2005, i.e. ten years ago.
Switching off nuclear power generation contributes to financial problems, but is clearly not the root cause
From our analysis it is obvious that the financial profitability issues of Japan’s electricity sector have started about 10 years ago, long before nuclear reactors were switched off due to the Fukushima accident – while of course the switch-off of nuclear power does contribute to a worsening of the financial situation in the last 3 years.
Clearly, the electricity deregulation which is now on track with regulatory and legal changes, was long overdue, and in my opinion is more due to the declining profitability of Japan’s electricity sector, than immediately triggered by the Fukushima accident. The financial data clearly show that a change of business model for Japan’s electricity sector is needed.
Operating income of Japan’s electricity sector has been falling continuously since the peak in 2005
Chugoku Electric Power Company as an example
Our analysis shows that each of Japan’s 10 regional electricity companies have different financial circumstances.
We discuss Chugoku Electric Power Company which serves the area around Nagoya in the middle of Japan as an example. The Figure below shows that Chugoku Electric Power Company’s income peaked around 2004-2005, about ten years ago, and since then has been continuously falling, with net income dropping into the red for the first time for Financial Year 2008 (ending March 31, 2009), about two years before the Fukushima nuclear disaster. An important point to consider is that only about 10% of the electricity generation capacity of Chugoku Electric Power Company is nuclear power, which is one of the lowest ratios of nuclear power in Japan. It follows logically, that switching off this 10% of nuclear generation capacity has a much lower impact than for other regional power companies, where the nuclear contribution was about 30%.
Japan electricity: income and margins of Chuo Electrical Power Company have been continuously falling since their peak around 2004
We conclude that the peak around 2004-2005 in profitability followed by a long decline in profitability indicates a deep rooted need for change of business models which was exacerbated but not directly caused by the Fukushima nuclear accident. Japan’s Government is now reacting to this fact by deregulating the electricity sector.
Japan electricity: Why do current business models need to change?
Japan’s regional electricity companies enjoyed monopoly power within their regions, where the electricity prices were regulated by Government, and in exchange electricity companies could enjoy a financial model where they could charge costs + profits to customers. There was no competition and little incentive to reduce costs
Japan will now follow the global trend from top-down electricity grids with large central generation facilities and a top-down distribution grid to more de-centralized, localized smart-grids, driven by technological progress, and the emergence of renewable energy.
European Institute of Japanese Studies (EIJS) Academy Seminars
About the talk: Japan’s electricity architecture was put in place in 1952 and was not much changed until 2011. Electricity liberalization, introduction of smart meters and smart grids bring very large investments in Japan’s energy infrastructure, and are creating huge opportunities for Japanese and foreign companies in Japan’s energy sector. At the same time there is much uncertainty about Japan’s nuclear program -will Japan’s nuclear power plants restart? The talk will explain Japan’s energy architecture today and how we arrived at today’s situation and will give you some tools to understand possible scenarios for Japan’s energy and electricity future.
As an introduction, you may watch Gerhard’s interview for The Economist about Japan’s energy situation here
About the speaker:Gerhard came first to Japan in 1984 to help build what was NTT’s first international R&D cooperation and has worked with Japan ever since. Gerhard is founder and CEO of Eurotechnology Japan KK, where he has worked for 100s of US, EU and Japanese companies on M&A and business development, and he is independent Member of the Board of Directors
of the Japanese company GMO Cloud KK, a cloud services company with about 500 employees and traded on the Tokyo Stock Exchange. Gerhard is also the creator and curator of the Ludwig Boltzmann Symposia on Energy, Entropy and Leadership. Gerhard graduated with a PhD in Physics from Cambridge University, Trinity College, was tenured faculty at Cambridge University in Semiconductor Physics, Associate Professor at Tokyo University’s Electrical Engineering Department, and the first foreigner to lead an elite Sakigake Research project of Japan’s Science and Technology Agency.
Date and place – Japan’s electricity and new energy policy
Date: Wednesday, June 18th, 2014 Time: 6.30 p.m. – 7.00 p.m. Drink & Snack (served before lecture), 7.00 p.m. – 9.00 p.m. Lecture and Discussion Place: Alfred Nobel Auditorium, Embassy of Sweden, 10-3-400 Roppongi 1-chome, Minato-ku, Tokyo 106-0032 Fee: JPY3,000 per person, payable at the door, Free for those who are from sponsoring companies, Free for students, please bring your student ID Language: English Registration required:Please sign up by June 13 (Fri.) via e-mail to eijsjap (at) gmail (dot) com for the attention of Ms. Futagawa (EIJS Tokyo office) In cooperation with the Embassy of Sweden
Gerhard Fasol: Japan’s electricity and new energy policy
If you can’t attend the talk on June 18th, 2014 at the Embassy of Sweden, you can download our reports on Japan’s energy situation here:
Many times, often several times a day, I get asked about what will happen with Japan’s nuclear power stations – today alone twice. So here is the answer I usually give – please note that I am Physicist, and I know a lot about the Physics of nuclear power, and although I have personally avoided working in the nuclear physics field (which is much wider than nuclear power), I do not have a personal opinion for or against nuclear power:
Quick answer: it is impossible for anyone, including the Prime Minister of Japan, to know with any certainty.
Long answer: Japan is a democracy. Japan currently is quite polarized for or against nuclear power. Everyone knows that some Japanese leaders including the Prime Minister Abe, are in favor of nuclear power. On the other hand, many outstanding opinion leaders are strongly against nuclear power in Japan, these include Nobel Prize Winner Kenzaburo Oe, and also the former Prime Minister Koizumi. Currently we can observe the evolution of a democratic process in Japan to reach a consensus on the future of nuclear power stations in Japan. This process is different for every single nuclear power station, and it is impossible for anyone to make predictions.
Obviously the owners of the nuclear power stations hope to restart their power stations as quickly as possible, and they are supported by many industrial leaders and the current Prime Minister. They need to obtain the agreement by the newly established nuclear power regulator, which was newly established because the Parliamentary Committee which investigated the Fukushima nuclear disaster established that the cause for the nuclear disaster was “regulatory capture”. This committee was chaired by Kiyoshi Kurokawa, and you can read one of his speeches “Groupthink can kill”, and watch YouTube movies explaining the results of his committee here.
Sofar none of the nuclear power station was cleared by the new nuclear safety agency, and no one knows when the safety inspection program will be concluded for any of the nuclear power stations, nor which stations will be cleared to restart (in principle) and to which the nuclear safety agency will refuse the clearance.
However, clearance by the nuclear safety agency is by far not enough. In addition, in Japan, nuclear power stations need the agreement of the local communities, i.e. the local mayors and Province (Ken, Prefecture) Government Prefects. As an example, the world’s largest nuclear power plant is Kashiwazaki-Kariwa, it is currently owned by the Tokyo Electric Power Company to supply Tokyo with electricity, and it is located approximately 80 km from the Prefecture capital city Niigata-shi, which has about 1 million inhabitants. The current very outspoken Governor (Government Leader) of Niigata-Prefecture, Hirohiko Izumida (泉田 裕彦), has clearly stated his opposition both to the restart of the Kashiwazaki-Kariwa nuclear power station, and secondly he has also stated that he considers Tokyo Electric Power Company unsuited to manage a nuclear power station. Read and watch a video of Governor Hirohito Izumida here. I have read speculations that as a consequence it might be thinkable that ownership and/or management of the Kashiwazaki-Kariwa Nuclear Power station could be transferred to a different power company to overcome this local resistance. But it is not possible for anyone to predict how this will play out.
It is my understanding also, that in Japan it is not clearly defined which local authorities have to agree before a nuclear plant can operate, and which distance from the nuclear power station is still close enough that agreement of local authorities is needed. In my understanding also it seems to be unclear which type of local authorities have veto power: The Prefect (i.e. the chief of the Prefectural Government), cities, towns, villages etc. There seems to be much uncertainty here, which did not exist in the past, or which did not come out into the open in the past.
Another factor is the local geological situation for each nuclear power station. In Japan there are legal requirements that nuclear power stations need to be located away from active geological faults. Recently there have been investigations by geological experts about the geological conditions near the nuclear power stations, but my understanding is that many questions are still unsettled at least for some of the nuclear power stations.
Still another factor are the courts. Traditionally Japanese courts have rejected all complaints against the operation of nuclear power stations, but I hear that recently some court complaints against the operation, or against the restart of nuclear power stations have been successful. Court decisions also cannot be predicted by anyone.
So in summary: No-one can possibly predict what will happen with Japan’s nuclear power stations. When pushed, I sometimes say that a possible scenario will be that about 10 out of Japan’s approx. 50 nuclear power stations might be restarted in about 3 years from now. However, no one can know this for sure, and no one can assign a probability to any outcome.
There have been enquires by some non-Japanese/foreign media, which interviewed a number of experts, asked them to estimate the probability for each of Japan’s nuclear power plant, and then took some kind of average of these experts opinions. I was also asked to participate in this experts’ enquiry, but I refused to participate, and said that simply no one can know with any precision at all.
“Keeping the lights on – deregulation and Japan’s energy mix”
Japan energy policy – interview outline:
Japan energy policy Question: Is the new energy policy of Japan’s Government an appropriate response to the situation or a missed opportunity
Answer summary:The Government in its new strategy summarizes Japan’s energy situation and proposes a cocktail of different energy sources. Everyone knows that Prime Minister Abe is pro-nuclear energy, but that does not mean that he is against other energy sources, such as renewables. The new energy strategy paper though misses KPIs, Key Performance Indicators. There are no many numerical targets.
Japan energy policy Question: It is often repeated that Japan is poor in energy sources, is this true?
Answer summary:Yes, that is often repeated without thinking, and thats also the case in the introduction of the new policy paper. This is only true as long as we restrict our view to traditional carbon based primary energy sources such as oil, gas, or coal. But if we widen the view to renewables such as wind, water, solar, biomass, and geo-thermal energy sources, then Japan is actually very rich in primary energy sources, and could even aim for energy self-sufficiency. Off-shore wind alone would be sufficient to make Japan energy self-sufficient.
Just by repeating the statement many times, that Japan is poor in energy sources, does not make this statement true.
The new energy policy paper also starts out by saying the Japan is poor in primary energy sources. This is not true if we widen the view to renewable energy sources.
Japan energy policy Question: Re-engineering the electricity grid. Can you explain the concept?
Answer summary:The electricity grid has evolved over many years, maybe 100-150 years. The traditional architecture of the electricity grid is a top-down one-way distribution network from large central power station such as large coal-, gas- or oil-fired power stations or nuclear power stations, to consumers. The traditional electricity grid is similar to the arteries in the human body, where there is the heart in the center, and the arteries distribute the blood to the extremities. This traditional top-down grid has served us very well for a long time, but the time as come now to evolve the grid to the next stage. There will be more distributed power generation, which feed in electricity in the opposite direction from the extremities, and there will be more intelligence in the grid.
Japan energy policy Question: How do you see Japan deal in the future with supply and demand management, how do you see electricity prices evolve in Japan?
Answer summary:With the liberalization there will be more flexibility in the pricing of electricity and supply and demand management. Prices will not necessarily go down, but will depend much more on the timing of demand, on demand/supply management, or on the value of electricity. For example, mission critical electricity consumers such as data centers or hospitals will need a different type of electricity supply, than washing machines in households. Demand/supply management and smart grid will manage the timing of less critical electricity usage.
Japan energy mix, smart grid, electricity deregulation – briefing by The Economist Corporate Network
Economist Corporate Network held a breakfast briefing today April 24, 2014 for about 50 Japan-CEOs and executives.
Shigeki (Sean) Miwa, General Manager of SoftBank’s CEO Office, and Representative Director & CEO of Bloom Energy Japan KK, and EVP of SB Energy Corporation
Mr Shigeki (Sean) Miwa, General Manager of SoftBank’s CEO Office, and Representative Director & CEO of Bloom Energy Japan KK, and EVP of SB Energy Corporation, explained SoftBank’s and Masayoshi Son’s reasons for entering the energy business, and he explained Bloom Energy’s offering of energy sources based on very efficient fuel cells in Japan.
Gerhard Fasol, CEO of Eurotechnology-Japan
Gerhard Fasol, CEO of Eurotechnology-Japan, gave an overview of Japan’s energy situation, and an outlook into the future.
It is wrong that Japan has all technology to decommission Fukushima Dai-ichi
“It is wrong that Japan has all technology to decommission Fukushima Dai-ichi. The IAEA strongly recommends international cooperation for the decommissioning of Fukushima Dai-ichi nuclear power plants”, is the strongest statement Mr Yukiya Amano (天野之弥), Director General of the International Atomic Energy Agency (IAEA) made today at the Foreign Correspondence Club in Tokyo in a very carefully worded presentation.
IAEA is currently preparing a report about Fukushima Dai-ichi which will be completed by the end of this year, 2014.
We are often asked, whether nuclear power is safe, the answer is that no technology is 100% safe. A multilayer defense is required against risks, in-depth defense. Safety levels are now higher than they were before the Fukushima Dai-Ichi nuclear accident.
IAEA: non-proliferation, nuclear safety, and other programs
Let me introduce The International Atomic Energy Agency (IAEA). The IAEA has three roles:
Advise on nuclear power and nuclear safety. In this area, IAEA has no authority. IAEA only can advise. IAEA also helps developing countries which are are thinking to introduce nuclear power.
Prevent nuclear proliferation. In this area, IAEA has authority.
Other projects, for example in healthcare and decease prevention. For example, IAEA used radiation to disable breeding by insects distributing malaria and other illnesses.
IAEA is not an international nuclear safety regulator. IAEA can only advise on nuclear safety. IAEA does not influence countries, but provides comprehensive assistance.
Of course nuclear safety is intrinsically international: one country’s nuclear accident is all countries’ nuclear accident.
IAEA position on nuclear power
The IAEA has the position that nuclear technology is affordable and useful. IAEA is much more than a “nuclear watchdog”. IAEA also helps to make nuclear technology available for developing countries.
IAEA advises countries introducing nuclear energy. Today we have 437 nuclear power plants globally, and 72 are under planning or construction. Growth of nuclear energy is mainly in Asia, especially China and India, but also in Europe and in developing countries.
30 countries use nuclear power, and 60 countries are considering to start using nuclear power in the future.
IAEA and nuclear security
A growing role for IAEA is nuclear security, to advise on proper protection of nuclear materials, for example to prevent dirty bombs. IAEA provides guidance and measurement equipment. IAEA is ready to assist Japan in advising on nuclear security for the Tokyo Olympics in 2020. Next week, we will have a Nuclear Security Summit in Den Haag.
IAEA prevents proliferation, prevents spread of nuclear weapons
The main current issue is Iran, and Iran has taken positive steps forward, but much remains to be done.
Regarding North Korea, the IAEA is currently not involved inside North Korea, but ready to help. The IAEA calls on North Korea to fully cooperate with IAEA.
IAEA motto is “Atoms for peace”.
Q&A
Question: Is it right to release contaminated water into the ocean?
Answer: It is common practice globally, to release contaminated water into the ocean, provided contamination is sufficiently low, and it is essential to talk to stake holders, e.g. fishermen. Storage is not a long term solution. IAEA recommends to release contaminated water into the ocean after proper treatment of the water, and after consultation with stake holders. IAEA recommends release into the ocean, because storage is cost and human resource intensive, and these resources need to be used in other areas of the decommissioning work.
Question: Should not Japan have higher safety requirements because Japan is in an earthquake zone?
Answer: IAEA does not discriminate against any countries, and strong earthquakes are also known to happen in Europe. Strong earthquakes and tsunami can occur anywhere.
Question: what is IAEA’s position regarding the prioritization of the Sendai nuclear plant in Kyushu?
Answer: IAEA does not take party in such decision making. Regulation is the responsibility of each country, and IAEA says that the regulator must be robust, independent and well funded.
Question: Prime-Minister Abe says that Japan’s nuclear safety regulations now are the strictest in the world. What about missing evacuation plans?
Answer: It is not IAEA’s role to rank countries. Broadly speaking, Japanese regulations today are broadly in line with global regulations recommended by IAEA, and Japan has requested the IAEA to review the Japanese nuclear safety standards. IAEA makes safety standards, recommends the use of these standards, and if requested, sends missions to assist.
Question: why do you say “broadly”?
Answer: Nuclear safety is a huge and complex field. In our view, Japanese nuclear safety regulations are broadly in line with global regulations, and IAEA will evaluate Japanese safety regulations on request by the Japanese Government.
Question: Did IAEA warn that pre-Fukushima Dai-Ichi-disaster Japan’s nuclear regulator did not fulfill IAEA criteria: (1) robust, (2) independent, and (3) well funded?
Answer: IAEA did warn in polite language that more independence was needed.
Question: What was the Japanese Government’s response?
Answer: The Japanese Government’s response was, that the regulatory body was sufficiently independent.
Question: IAEA promotes nuclear power, and sets safety standards. Is there no conflict of interest between these two roles?
Answer: The IAEA is not a global regulator. In each country separately an independent in-country regulator is responsible for regulation in that country. IAEA supports, provides training for in-country regulators.
Question: Who assesses IAEA?
Answer: The member states assess, and will end the tenure of the Director General if they are not satisfied.
Question: Did IAEA hide nuclear radiation information in the days after the Fukushima Dai-Ichi disaster?
Answer: The IAEA came on a radiation measurement mission to Tokyo and Fukushima on March 18, 2011 one week after the Fukushima Dai-Ichi disaster, reconfirmed the measurements on March 19, 2011, the next day, and published these data.
Question: Japan has 331 kg Plutonium. What is the target?
Answer: There are three issues: (1) Safeguard: this material is placed under IAEA control, assure that all material is used for peaceful purpose, and short-notice controls by IAEA are included by Japan, (2) nuclear security: is the responsibility of each state under IAEA guidance, (3) transparency, including future use: it is the responsibility of the Japanese Government to provide transparency regarding future use
Question: do you think that 30-40 years will be sufficient for complete decommissioning of Fukushima Dai-Ichi?
Answer: I don’t know. Good understanding of the melted core takes very long time. At present we have no understanding of the melted core. IAEA recommends international cooperation. It is wrong that Japan has all technology. It is IAEA’s recommendation to cooperate internationally. Decommissioning the most difficult nuclear power plant will help to decommission all other nuclear power plants.
Question: what about the shortage of workers for decommissioning Fukushima-Dai-Ichi?
Answer: Shortage of workers in nuclear plants is a global phenomenon.
Director General of the International Atomic Energy Agency (IAEA) Mr Yukiya Amano (天野之弥)
(Gerhard Fasol, CEO of Eurotechnology Japan KK. Served as Associate Professor of Tokyo University, Lecturer at Cambridge University, and Manger of Hitachi Cambridge R&D Lab.)
Ludwig Boltzmann’s greatest contribution to science is that he linked the macroscopic definition of Entropy which came from optimizing steam engines at the source of the first industrial revolution to the microscopic motion of atoms or molecules in gases, this achievement is summarized by the equation S = k log W, linking entropy S with the probability W. k is the Boltzmann constant, one of the most important constants in nature, linked directly to temperature in the SI system of physical units. This monumental work is maybe Boltzmann’s most important creation but by far not the only one. He discovered many laws, and created many mathematical tools, for example Boltzmann’s Equations, which are used today as tools for numerical simulations of gas flow for the construction of jet engines, airplanes, automobiles, in semiconductor physics, information technology and many other areas. Although independently discovered, Shannon’s theory of noise in communication networks, and Shannon’s entropy in IT is also directly related to Boltzmann’s entropy work.
Ludwig Boltzmann, the leader
Ludwig Boltzmann was not only a monumental scientist, but also an exceptional leader, teacher, educator and promoter of exceptional talent, and he promoted many women.
One of the women Ludwig Boltzmann promoted was Henriette von Aigentler, who was refused permission to unofficially audit lectures at Graz University. Ludwig Boltzmann advised and helped her to appeal this decision, in 1874, Henriette von Aigentler passed her exams as a high-school teacher, and on July 17, 1876, Ludwig Boltzmann married Henriette von Aigentler, my great-grand mother.
Another woman Ludwig Boltzmann promoted was his student Lise Meitner (Nov 1878 – Oct 27, 1968), who later was part of the team that discovered nuclear fission, work for which Otto Hahn was awarded the Nobel Prize. Lise Meitner was also the second woman to earn a Doctorate degree in Physics from the University of Vienna. Element 109, Meitnerium, is named after Lise Meitner.
Nagaoka Hantaro, First President of the University of Osaka – Ludwig Boltzmann’s pupil
The first President of Osaka University (1931-1934), Nagaoka Hantaro (1865 – 1950) was Ludwig Boltzmann’s pupil around 1892 – 1893 at Muenchen University.
Ludwig Boltzmann, a leader of science
Ludwig Boltzmann was connected in intense discussions with all major scientists of his time, he travelled extensively including three trips to the USA in 1899, 1904 and 1905, about which he wrote the article “Die Reise eines deutschen Professors ins El Dorado”, published in the book “Populäre Schriften”.
Ludwig Boltzmann published his first scientific publication at the age of 21 years in 1865. He was appointed Full Professor of Mathematical Physics at the University of Graz in 1869 at the age of 25 years, later in 1887-1888 he was Rektor (President) of the University of Graz at the age of 43 years.
He spent periods of his professional work in Vienna, at Graz University (1869-1873 and 1876-1890), at Muenchen University (1890-1894). When working at Muenchen University, he discovered that neither he nor his family would not receive any pension from his employment at Muenchen University after an eventual retirement or in case he dies before retirement, and therefore decided to return to Vienna University in 1894, where he and his family were assured of an appropriate pension. During 1900-1902 he spent two years working in Leipzig, where he cooperated with the Nobel Prize winner Friedrich Wilhelm Ostwald.
Ludwig Boltzmann did not shy away from forceful arguments to argue for his thoughts and conclusions, even if his conclusions were opposite to the views of established colleagues, or when he felt that philosophers intruded into the field of physics, i.e. used methods of philosophy to attempt solving questions which needed to be solved with physics measurements, e.g. to determine whether our space is curved or not. Later in his life he was therefore also appointed to a parallel Chair in Philosophy of Science, and Ludwig Boltzmann’s work in Philosophy of Science is also very fundamentally important.
I discovered the unpublished manuscripts of Boltzmann’s lectures on the Philosophy of Science, stimulated and encouraged by myself, and with painstaking work my mother transcribed these and other unpublished manuscripts, and prepared them for publication, to make these works finally accessible to the world, many years after Ludwig Boltzmann’s death.
Ludwig Boltzmann was a down to earth man. He rejected the offer of Nobility by His Majesty, The Emperor of Austria, i.e. the privilege to be named Ludwig von Boltzmann (or a higher title) instead of commoner Ludwig Boltzmann. Ludwig Boltzmann said: “if our common name was good enough for my parents and ancestors, it will be good enough for my children and grand children…”
Summary: understanding Ludwig Boltzmann.
Boltzmann’s thoughts and ideas are a big part of our understanding of the world and the universe.
His mathematical tools are used every day by today’s engineers, bankers, IT people, physicists, chemists… and even may contribute to solve the world’s energy problems.
Ludwig Boltzmann stood up for his ideas and conclusions and did not give in to authority. He rejected authority for authority’s sake, and strongly pushed his convictions forward.
What can we learn from Ludwig Boltzmann?
empower young people, recognize and support talent early.
exceptional talent is not linear but exponential.
move around the world. Connect. Interact.
empower women.
don’t accept authority for authority’s sake.
science/physics/nature need to be treated with the methods of physics/science.
Stanford Economics Professor Takeo Hoshi thinks that there is a 10% chance that Abenomics will succeed to put Japan on a 2%-3% economic growth path, while the most likely outcome will be 1% economic growth. Read our notes of Professor Hoshi’s talk in detail here.
Can Japanese companies globalize?
“Globalization” of course is not an aim in itself. In Europe and USA there are plenty of companies which are very successful and not globalized. However, Japan could capture much more global value from technology and creativity by creating more global companies: the shining example is SoftBank.
Read legendary Masamoto Yashiro’s viewpoints about globalization at a recent Tokyo University brainstorming event by the President of Tokyo University (Masamoto Yashiro was Chairman of Exxon-Japan, of Citibank-Japan, and Shinsei-Bank, and Board Member of the Construction Bank of China). Masamoto Yashiro says that a change of mind-set is urgently needed.
Until March 11, 2011, Japan’s energy markets were essentially frozen in the structures created in 1952, which again resulted from the war-time nationalization of Japan’s electricity sector (see our Energy Report). Japan’s electricity markets alone are worth about US$ 200 million per year – and this market is now in disruption.
Recently I was invited to brief the Energy Minister of Canada, Mr Joe Oliver, and Sweden’s Trade Minister Dr. Ewa Björling about Japan’s energy markets. My briefings are based on our analysis, which you can find in our Energy Report, and Renewable Energy Report.
The liberalization of Japan’s energy markets will create winners and losers – comparing the financial performance of Japan’s electricity companies and gas companies is an indication of things to come. Actually, only Japan’s electricity markets are being liberalized currently, liberalization of Japan’s gas markets is still for the future.
Disrupting Japan’s game sector
Japan’s game makers have essentially created the global game market, and are ripe for disruption by smart phones and tablets one would think. Indeed, just three Japanese newcomers Gree + DeNA + GungHo alone (there are many more) create more annual net income than Japan’s top 9 game makers combined! The origin of this disruption by newcomers in Japan however is not created by Western companies, and not by smart phones, but goes back to the creation of i-Mode in February 1999 (and some months later EZweb and Jsky). Recently the world is slowly waking up to the fact, that Japan’s game markets is one of the world’s biggest, if not the biggest… and hard for foreign companies to penetrate, unless done correctly…
Japan went 100% nuclear free since Monday, Sept. 16, 2013. When nuclear reactors will be restarted is totally unclear.
Kansai Electric Power (KEPCO) on Sunday Sept 15, 2013 at 16:40 started to reduce power output of Japan’s last remaining active nuclear power reactor (Oi No. 4 reactor), and stopped operations of this reactor on Monday Sept 16, 2013 morning.
Since Monday September 16, 2013 Japan is nuclear free, and will remain so for the foreseeable future. It is unclear currently, when and if nuclear power will be restarted again in Japan.
Japan is strongly polarized over nuclear power
The reason Japan is currently nuclear free is not a policy decision by the Government of Japan or the Prime-Minister, the reason is mainly technical and a consequence of Japanese local politics:
Japan’s nuclear reactors are stopped every 13 months for checks, cannot be restarted in the current political and legal climate
Japan’s nuclear reactors are switched off for routine maintenance and security checks once every 13 months. In order to restart each reactor after this periodic maintenance both Japan’s nuclear safety agency, and also “the local community” have to give their formal agreements. Before the Fukushima disaster, both these two agreements were a formality and given quickly. Since the Fukushima disaster however, the approval by the newly formed Nuclear Safety Agency has been a far higher barrier to overcome.
However, more importantly, it has turned out that “the local community” who’s approval is also necessary is in some cases not well defined. Therefore many community authorities which in the past did not raise their voices, now join in the decision making process. In addition, some regional administrative leaders, such as the Governor of Niigata-ken, have expressed their very strong distrust in current management of nuclear power stations, and are refusing to give their agreement, without which the restart of nuclear power stations within the Prefecture they govern is impossible.
Nuclear power is mainly replaced by LNG
For the time being, nuclear power is replaced predominantly by electricity generation from Liquid Natural Gas (LNG). As a consequence Japan’s payments for LNG are at an all-time high.
You will find detailed statistics and analysis of Japan’s electricity and energy situation in our report on Japan’s Energy Sector.
Japan’s last operating nuclear power station was switched off on Monday Sept 16, 2013. source: https://www.eurotechnology.com/store/j_energy/
Japan’s last operating nuclear reactor (No. 4 reactor at KEPCO’s Oi plant) was switched off on Monday, Sept 16, 2013. Since then Japan is nuclear free. It is unclear when nuclear power plants will be operated again in Japan.
Read detailed analysis in our report on Japan’s energy sector:
Feed in tariff Japan for renewable energy are about three times higher than in Germany
Approvals peaked just before the latest feed in tariff reduction
The figures below show an overview of renewable energy sources currently installed and operational in Japan (the majority of which is water power), and also renewable energy projects approved by Japan’s industry ministry METI under the renewable energy feed-in-tariff (FIT) law, which started in July 2012.
Approvals peaked just before March 31, 2013
The figures below clearly show that approvals peaked in March 2013, and dropped off dramatically from April 2013. The reason is most likely the decrease of FIT-tariffs from April 1, 2013: it seems that many applications were rushed in order to take advantage of the higher FIT-tariffs for projects approved up and until March 31, 2013.
Renewable energy capacity approved so far under the FIT-law will increase renewable energy capacity in Japan approximately by 70%, including water power. 94% of renewable energy projects approved under Japan’s feed-in-tariff programs are for solar energy generation (see our past blog analyzing FIT approvals).
The figures below show, that almost no fresh generation capacity was approved during March, April and May 2013: the approval of new renewable energy capacity is drying up.
Thus, companies seeking to build solar power stations in Japan based on pref-approved METI-projects, are faced with a fixed pool of approved projects, with almost no additional projects being added until May 2013.
Accumulated total generation capacity of approvals for renewable energy projects under the feed-in tariff law until May 2013 in comparison with installed renewable energy in Japan. Approvals seem to have dried up: almost no new capacity has been approved during March-May 2013.Figure shows the accumulated generation capacity of solar energy projects approved by Japan’s Industry Ministry METI under the renewable energy FIT law. Approvals seem to have dried up: almost no new capacity has been approved during March-May 2013.Approvals under Japan’s renewable energy feed-in-tariff law per month. Figure shows that approved generation capacity drops to a low level after March 2013 – the most likely explanation for the dramatic drop of approvals after March 2013 is the reduction of FIT-tariffs from April 1, 2013: it looks likely that many applications were rushed to meet with the higher FIT tariffs available for projects granted at the higher rates up to March 31, 2013 (42 yen/kWh in case of large scale solar)
Japan LNG import costs – we analyze Japan’s official LNG import data
Japan LNG import costs increase 77.5% from 2011-2013
Here we analyze Japan’s liquid natural gas (LNG) costs, which have been driven to record heights – mainly by the very high LNG prices Japan has to pay, and driven even higher by the low YEN exchange rates. If you are interested in precise numerical analysis: you can find detailed graphics and analysis in our Japan-Energy report, based on import data direct from Japan’s Ministry of Finance.
Japan LNG import cost reduction strategies
To reduce Japan’s extremely high payments for energy, Japan’s Government is following several strategies: Japan’s Government seeks to reduce LNG prices by developing new LNG sources, increase coal usage, increase development of renewable energy sources – and work towards restarting nuclear power plants.
Solar projects dominate renewable energy development for now. Our company currently alone is working with a number of clients on a pipeline of about 50 solar projects with a total of approx. 950 MegaWatt – and growing.
For insights into why Japan’s energy situation has come to where it is today, download the handouts of our talk “Japan’s Energy – Myths vs Reality”, given at the Embassy of Sweden in Tokyo (Alfred Nobel Auditorium) in cooperation with Stockholm School of Economics on June 19.
Liquified gas import costs increased 77.5%
Japan’s monthly payments for LNG imports increased 77.5% from 2011 to 2013. Source: https://www.eurotechnology.com/store/j_energy/
Nuclear power has been replaced largely by electricity produced from imported LNG. Japan’s payments for LNG have dramatically increased. We have analyzed Japan’s official data, and found that the increase is mainly due to increased prices and exchange rate, and much less due to increased volumes.
Japan pays higher LNG prices than at the 2008 peak
Japan pays higher LNG prices today than at the peak in September 2008. Source: https://www.eurotechnology.com/store/j_energy/
Japan pays very much higher prices for LNG than Europe or US. The LNG prices Japan pays today are about twice as high as during the slump following the Lehman shock, and are higher than at the peak just before the Lehman bankruptcy in September 2008.
Japan’s liquified gas imports have increased 23%
LNG import volumes currently are about 23% higher than before March 11, 2011. Source: https://www.eurotechnology.com/store/j_energy/
Due to intensive electricity saving measures, LNG imports have actually increased far less than would be necessary to replace all switched off nuclear power. Today’s LNG import volumes by weight are only about 23% higher then before the March 11, 2011 crisis, while costs are about 77.5% higher.
This shows that Japan’s extremely high payments for LNG imports are much more caused by high prices than by increased import volumes. Therefore Japan’s Governments and private industry strategies to decrease LNG prices for Japan are the way to go for the short term.
Another approach to liberalization is currently on its way – as described in our detailed report and analysis of Japan’s energy markets
Longterm of course, it is necessary to rebuild Japan’s energy architecture, which has been created in 1952 under orders from McArthur’s military Government, and has been essentially frozen in since 1952. Attempts to liberalize Japan’s energy markets, including electricity, have been largely ineffective.
Thank you to all those who attended the event “Japan’s energy – myths vs reality” at the Embassy of Sweden – an event organized by the European Institute for Japanese Studies of the Stockholm School of Economics.
We had about 120 registrations for 100 seats in the Alfred Nobel Auditorium of the Embassy of Sweden – participants included an official from Japan’s Prime Minister’s Cabinet Office, Officials from several Embassies including the Swedish, US, Norwegian, Swiss, Hungarian and more Embassy, executives from Japanese and European telecom and energy companies, including also several independent power producers (IPPs), legal professionals, and groups of students and MBA students from Tokyo University, Hitotsubashi University and others.
We had very vivid discussion, and continued the discussions over nijikai.
Detailed data, statistics and analysis of Japan’s energy markets:
All the data of the talk are from our reports on Japan’s energy sector:
European Institute of Japanese Studies Academy Seminars presents:
Japan’s Energy – Myths vs Reality”
Speaker: Dr. Gerhard Fasol, President, Eurotechnology Japan K.K.
Wednesday, June 19th, 2013
18:30 – 21:00
Embassy of Sweden, Alfred Nobel Auditorium
Stockholm School of Economics, European Institute of Japanese Studies for details and registration click here
Announcement on the webpage of Stockholm School of Economics
Gerhard Fasol “Japan’s Energy – Myths vs Reality” Embassy of Sweden
About the talk:
Japan’s electricity companies earn about US$ 200 billion annually in revenues, and until the Fukushima nuclear accident, about 30% of energy was generated by nuclear power plants, which are currently switched off except for two nuclear plants in Kansai region. Renewable energy sectors expect the rapid built-up of renewable sources in Japan to continue, ie; solar energy, wind, geo-thermal and other sources to follow. METI is also working on liberalization of Japan’s energy markets. Japan’s energy sector undergoes rapid changes and presents large opportunities. In the presentation, we will hear some of the myths about electricity and energy in Japan, and the realities. We will also hear how foreign companies can succeed in Japan’s energy sector.
About the speaker:
Dr. Gerhard Fasol is physicist and entrepreneur who has worked since 1984 with Japan’s high-tech sector. He worked on the entrance strategies into Japan’s environmental and energy sector for one of Europe’s largest engineering multi-nationals, and for US investment funds and venture companies on market entry into Japan’s energy sector. Gerhard also builds the Ludwig Boltzmann Forum as a global leadership platform.
Gerhard graduated with a PhD in Physics from Cambrige University/Trinity College. He was tenured faculty member in Physics at Cambridge University, and Associate Professor at Tokyo University’s Electrical Engineering Faculty and led a JST-Sakigake project on spin electronics before founding Eurotechnology Japan KK.
Date: Wednesday, June 19th, 2013
Time: 6.30 p.m. – 7.00 p.m. Drink & Snack (served before lecture)
7.00 p.m. – 9.00 p.m. Lecture and Discussion
Place: Alfred Nobel Auditorium, Embassy of Sweden
10-3-400 Roppongi 1-chome, Minato-ku, Tokyo 106-0032
Five-minute walk from Tokyo Metro Nanboku Line Roppongi 1-chome Station
Five-minute walk from Tokyo Metro Hibiya Line Kamiya-cho Station
Fee: JPY3,000 per person, payable at the door
Free for those who are from sponsoring companies (*)
Free for students, please bring your student ID
Language: English
(*) EIJS Academy 2011-2012 and 2012-2013 Sponsoring companies
Gadelius Holding Ltd., Ericsson Japan K.K., Nihon Tetra Pak K.K., Sandvik K.K.,
Höganäs Japan K.K. and in cooperation with the Embassy of Sweden
Feed-in-tariffs for renewable energy where introduced in two stages in Japan. Large scale introduction of feed-in-tariffs (FIT) started with the Law entitled “Special measures concerning renewable energy electric power procurement by operators of electrical utilities law” which came into force on July 1, 2012. However, subsidies and feed-in-tariffs were already in place earlier for residential solar (mostly on roof-tops of private homes). Projects approved under the FIT program of July 1, 2012 amount to an increase of 41% in nominal renewable electrical generation capacity. Feed-in-tariffs however are not the whole story, because there are also programs for financial support, special finance arrangements, and tax benefits, and other support programs.
Renewable energy projects approved under Japan’s feed-in-tariff program increased renewable energy generation capacity by 41.4% sofar. source: https://www.eurotechnology.com/store/j_renewable/
Under the law feed-in-tariffs are periodically reviewed and adjusted. In fact, feed-in-tariffs for solar energy have already been reduced by about 10% this year and are likely to be decreased further next year. For some types of feed-in-tariffs however, increases are under discussions – thus the FIT-tariffs for off-shore wind maybe increased in the future.
Since feed-in-tariffs for solar are set for a period of 20 years, and are decreased periodically, there is great incentive to start solar installations as early as possible, in fact some Mega-Solar plants were switched on on July 1, 2012 to use every possible day. Currently there is a rush of solar operators starting up and expanding in Japan – exactly the effect the Government had intended by setting high feed-in-tariffs.
Project approvals under Japan’s feed-in-tariff program for renewable energy are 93.8% for solar plants. Source: https://www.eurotechnology.com/store/j_renewable/
The renewable energy mix approved under the FIT program is very different to Japan’s traditional renewable energy mix, which was predominantly large scale water power plants
Prior to the introduction of feed-in-tariffs, renewable energy in Japan was predominantly large scale (greater than 1 MegaWatt) water power. source: https://www.eurotechnology.com/store/j_renewable/
Renewable energy Japan report
detailed statistical data for installed renewable capacity and electricity generation and analysis
Mobile subscription data released last week show, that the SoftBank group continues to gain market share while incumbent NTT-docomo continues to lose market share – an upward trend for SoftBank, and a downward trend for NTT-docomo essentially unbroken since SoftBank acquired Vodafone-Japan and succeeded with the turn-round.
SoftBank’s market cap has also steadily increased recently and is now close to NTT-docomo’s, exceeding it on some days:
SoftBank group exceeds 40 million mobile subscriptions
Bringing eMobile and PHS operator Willcom under its group umbrella, and by creating the new operator Wireless City Planning (WCP), Softbank group subscription numbers now exceed 40 million, and have overtaken KDDI
PHS operator Willcom joins the SoftBank group
PHS operator Willcom registered for bankruptcy administration essentially because of the high investments in upgrading the legacy PHS network infrastructure, and is currently in corporate reconstruction with SoftBank as the reconstruction sponsor.
Wireless City Planning (WCP) is a wireless operator owned partially by Advantage Partners and SoftBank and other investors, and representing the next generation network Willcom hoped – but could not afford – to develop.
While negotiating the SPRINT acquisition, SoftBank tricks out KDDI to take control of eMobile
While Masayoshi Son was secretly negotiating his offer for SPRINT, he discovered that KDDI was in negotiations to acquire new entrant eMobile. While continuing the SPRINT negotiations, he was a faster decision maker than KDDI, and could win the eMobile acquisition right under the eyes of KDDI.
Since a few weeks ago, iPhones on SoftBank‘s network automatically log into both SoftBank’s and eMobile‘s LTE radio networks, greatly enhancing data transmission rates and coverage.
SoftBank aims for global No. 1 position…acquiring SPRINT on the way to the top
SoftBank: towards global No. 1 with a 300 year vision
To understand SoftBank, and the planned SPRINT acquisition, you need to understand Masayoshi Son – and Masayoshi Son says: “I am a man – and I want to be Number 1”. SoftBank announced FY2012 financial results a few days ago – read below and in our SoftBank-report for analysis, but lets first look at Masayoshi Son.
Yes, Masayoshi Son threatened the Japanese Telecomms and Postal Ministry to set himself on fire inside the Ministry
A few years ago, the Chief-Editor of BusinessWeek visited Japan to interview Masayoshi Son, and the night before the interview over dinner he asked me to suggest interview questions. I suggested to ask if it is true that Masayoshi Son threatened to set himself on fire inside Japan’s Government Ministry for Telecommunications if he is again refused the telecommunications license he needed to build a telecommunications business. Masayoshi Son’s answer: “yes, its true, I threatened to set myself on fire inside the Ministry – but I did not bring any fuel along into the Ministry”. This story shows Masayoshi Son’s passion and extreme determination – and my suggestion became the headline of the article in BusinessWeek – and can still be found online here. https://www.bloomberg.com/news/articles/2004-10-31/setting-fire-to-the-cell-phone-market
Faced with such passion and determination, Vodafone never had a chance in Japan – can you imagine the Chairman of Vodafone coming over from London to Tokyo to threaten to set himself on fire inside Japan’s telecommunications ministry? Not to mention the demanding customers: several times I personally saw complaining Japanese customers shout down Japanese Vodafone-staffers until these burst into tears and had to be consoled by Vodafone-coworkers… unbelievable, but true.
Japan can be tough for foreign companies…
BusinessWeek: “Apple would never talk to a “small fry” like SoftBank”. Really?
Around the same time, I had to ask BusinessWeek to print a correction to BusinessWeek’s statement, that Apple would never talk to a “small fry” like SoftBank – read the correction here. Well, Apple did talk to the “small fry” SoftBank – and as a result the iPhone is the best-selling mobile phones for two years in a row, and SoftBank is on the way now to become No. 1 in Japan. Read here about a Press Conference discussing the original iPhone introduction by SoftBank to Japan.
SoftBank aims for global No. 1 position: Japan’s most successful venture start-up – with a 30 year and a 300 year plan
SoftBank had already received a spectrum license and had intended to build up a mobile phone network from zero, when Masayoshi Son grasped the opportunity to acquire Vodafone’s struggling Japan operations – the former Japan-Telecom and J-Phone. Almost overnight Masayoshi Son arranged US$ 15 Billion in loans to fund the acquisition.
The acquisition was announced on Friday March 17, 2006, and the following Monday, Masayoshi Son moved all the remaining staff (minus most expatriates) from the Vodafone-Atago-office to Softbank’s offices in Shiodome, and shut down the Atago-offices to make a clear break. It took Masayoshi Son only a few months until it was clear that the turn-round will be successful. And now with the planned SPRINT acquisition, Softbank is on track to target global No. 1 position.
The photograph of Masayoshi Son is used under Creative Commons license according to Wikipedia.
Copyright details are:
Description English: Masayoshi Son on July 11, 2008
Date 11 July 2008, 12:11:02
Source iPhone 3G Masayoshi Son Masaru Kamikura (http://www.flickr.com/photos/kamikura/2658524938/)
Author Masaru Kamikura (http://www.flickr.com/people/20119192@N00) from Japan
This file is licensed under the Creative Commons Attribution 2.0 Generic
(https://creativecommons.org/licenses/by/2.0/deed.en) license.
On April 30 Japan’s electricity operators announced their financial results for the financial year that ended on March 31.
Japan’s ten regional electricity operators again announced combined net losses in excess of US$ 15 billion for the Financial Year ending March 31, 2013, similar in size as the previous year: energy remains one of Japan’s most pressing problems.
For Financial Year FY2010, which ended March 31, 2011 three weeks after the March 11, 2011 disaster, Tokyo Electric (TEPCO) already announced net losses in excess of US$ 10 billion as an immediate consequence of the nuclear disaster at their Fukushima nuclear power station. In FY2010 other electricity operators beyond TEPCO were not yet substantially affected.
In FY2011 (ending March 31, 2012) and FY2012 (ending March 31, 2013) all electricity operators (except Okinawa Electric Power Corporation) were directly affected by the stop of all except 2 of Japan’s nuclear power stations, and by the replacement of nuclear power with thermal power stations – mainly fired by LNG.
Currently all Japanese regional electricity operators, except Hokuriku Electric Power Corporation and Okinawa Electric Power Corporations show net losses.
These losses drive dramatic actions to reduce fuel cost, to introduce renewable energy, to introduce demand management and smart-grids, and liberalization of Japan’s electricity sector.
Net margins are negative for all but two electricity operators
Only Okinawa Electric Power Corporation (which operates no nuclear power stations and is not linked to any other region) continues to announce profits. Hokuriku Electric Power Corporation announced very small profits, while all other eight regional power companies show large negative margins.
All but two regional electricity operators announce losses. Source: https://www.eurotechnology.com/store/j_energy/
Electricity revenues show no slow-down
Electricity revenue statistics show a striking slow-down as a consequence of the Lehman shock. No such slow-down occurred as a consequence of the March 11, 2011 Tohoku disaster. Partially of course revenue increases are due to price increases to offset increased fuel costs.
Unlike the Lehman shock, March 11, 2011 did not impact revenues. Source: https://www.eurotechnology.com/store/j_energy/
Industry Ministry METI announces renewable energy sources admitted to the feed-in-tariff program
Reversing the decline of renewable energy in Japan
A few days ago Japan’s industry ministry METI announced the most recent data on renewable energy sources in Japan admitted under the feed-in-tariff (FIT) regulations introduced on July 1, 2012. We have updated our report on “Renewable energy in Japan” to take account of these most recent data – read a short summary in this newsletter below.
Since the introduction of the feed-in-tariffs of July 2012, the installed capacity for renewable electricity generation in Japan has increased by about 23% if hydropower is included, and by about 70% if hydropower is excluded.
Since solar plants are quickest to install, and the permission process is by far the easiest, about 91% of renewable electricity installations permitted under the FIT program by METI are for solar electricity, while only 9% are for other sources such as wind or bio-mass.
Wind, hydro and geo-thermal installations require a lengthy planning, permission, environmental impact process, and far longer construction phase, so that the impact of the FIT program will be seen only in a few years time.
126% were added to Japan’s solar electrical generation capacity since July 2012
Solar electricity generation capacity more than doubled due to FIT
Solar electricity generation capacity increased by 126% since July 2012 due to the introduction of new feed-in-tariffs and other regulations promoting solar energy. Note that previous to July 2012, about 83% of Japan’s solar electricity generation capacity was residential, while only 17% were industrial solar installations.
Japan’s renewable energy generation is overwhelmingly water power
Japan to reverse decline of renewable energy. The ratio of renewable power generation has decreased from 25% of total electricity generation in 1970 to 10% today. Extremely aggressive feed-in tariffs (FIT) for renewable energy introduced in July 2012 are showing first modest results to reverse this trend – initially solar energy projects dominate FIT projects, since solar projects are fastest to build.
Larger projects, such as off-shore wind power, or geo-thermal projects, take a very much longer time to plan and build – on the order of 10 years or longer. More below and in our report on “Renewable energy in Japan”.
Japan’s electricity generation from renewable sources
Japan’s ratio of electricity generation from renewable resources has dropped from 25% to 10% over the period 1970-2012
Over the years, electricity generation from nuclear and thermal sources has grown much faster than from renewable sources in Japan. As a result, electricity generation from renewable resources has dropped from around 25% in 1970 to around 10% in 2012. In 2012, Japan’s Government and industry associations have announced aggressive plans to reverse this trend
.
Japan’s electricity generation from renewable sources
Water power dominates renewable energy in Japan
This figure shows all electricity generation in Japan from renewable sources: Japan currently relies overwhelmingly on water power for renewable energy, which varies between 5% of total electricity in winter and around 12%-15% of total in summer, with an overall decrease since 2006. The figure shows that other renewable energy sources (wind, solar, geo-thermal and bio-mass) are still in the very early stages of development.
Japan replaced almost all nuclear energy with liquid natural gas imports
Increased LNG import costs due to declining yen
Japan gas imports: Japan replaced almost all nuclear energy with liquid natural gas imports at very short notice. Japan pays far higher costs for liquid natural gas imports than most other regions in the world (find a detailed explanation why this is so, and how Japan’s LNG import prices are composed, in our J-Energy report). ‘Abenomics’ (Prime Minister Abe’s economy policy package) have increased the costs of imports further due a decline in the value of the yen.
Consequently, Japan makes all out efforts to find the optimal energy mix, in particular searching for domestic sources of energy including renewables, and reducing the cost of imports. More below.
Detailed energy import data, including detailed analysis why Japan’s LNG import costs are so much higher than elsewhere, in our report on Japan’s Energy Landscape.
Japan gas imports: 77.5% cost increase since January 2011
Reason for this increase are increased import quantities, the very high prices Japan is forced to pay for gas imports, and the decrease of the value of the YEN due to ‘Abenomics’. These very high costs drive all-out efforts to secure new sources of natural gas to reduce costs, and also drive the sofar neglected development of renewable energy sources in Japan.
Japan’s gas import costs increased by 77.5% from Jan ’11 to Jan ’13. Source: https://www.eurotechnology.com/store/j_energy/
Primary energy imports are a very substantial part (about 7% currently) of Japan’s GNP, and have increased by 34% in January 2013 compared to January 2011
However, the figure above shows that current monthly costs of primary energy imports are below the peak just before the Lehman shock. Thus Japan’s primary energy costs are currently very substantial but not without precedent. Detailed energy import data, including detailed analysis why Japan’s LNG import costs are so much higher than elsewhere, in our report on Japan’s Energy Landscape
Japan’s primary energy import costs increased by 34% from Jan ’11 to Jan ’13. Source: https://www.eurotechnology.com/store/j_energy/
Descent into crisis of Japan’s electricity operators started in 2007:
Figure above clearly shows that the decent of Japan’s electricity operators started years before the Fukushima nuclear disaster. Therefore we conclude that restarting the nuclear reactors alone will not cure the crisis of Japan’s electricity operators, which for many years have enjoyed a monopoly position, and are now increasingly under attack by competitors including Japan’s very successful gas companies. We added approx. 50 pages analysis of Japan’s gas sector to our Japan-Energy-Report.
![Reduce your energy costs in Japan and Japan’s energy situation post-Fukushima [talk at EU Embassy Tokyo]](https://www.eurotechnology.com/b/wp-content/uploads/2017/05/IMG_7790_eu_2000_1000_HDR.jpg)
