Fukushima Daiichi nuclear power plant

Japan's government begins debate on energy policy

Japan Prime Minister Yoshihiko Noda’s month-old government began a debate on Japan’s energy policy on Monday.

Naoto Kan, Japan’s leader when the Fukushima nuclear crisis hit, concluded atomic power simply was not worth the risk. However, his successor seems less convinced. Noda has already signalled that nuclear power could play a role for decades.

Six months after the world's worst radiation crisis in 25 years erupted at the tsunami-crippled Fukushima plant, critics say powerful pro-nuclear interests are quietly fighting back.

"It's been a real bad year for the 'nuclear village' but I don't think they are down and out," said Jeffrey Kingston, Director of Asian Studies at Temple University's Japan campus, referring to the nexus of utilities, lawmakers and regulators who long promoted atomic power as safe, clean and cheap.

Public concern about safety leapt after the Fukushima accident, which forced 80,000 people from their homes and sparked fears about food and water supplies. Some 70 per cent of voters polled in July backed Kan's call to phase out nuclear plants. A series of scandals in which regulators and power companies tried to sway hearings on reactors has also dented public trust.

In an effort to tap in to that sentiment, Kan floated ambitious targets for renewable energy and embraced a future without nuclear power. He promised an overhaul of a government plan approved last year to build 14 new reactors and raise the share of nuclear power in Japan's electricity mix to 53 per cent by 2030 from about a third prior to the Fukushima accident.

"It chilled me to the bone every waking moment of each day," he told his last news conference as premier of the battle to contain the disaster. "How should we deal with the risk that nuclear power might cause our country to perish? This question is what led me to propose the creation of a society free from dependence on nuclear power."

Noda, in contrast, has acknowledged that public safety concerns will make it tough to build new reactors, but on Friday stopped short of saying atomic power would play no role at all by 2050. He said decisions on reactors already under construction would have to be made "case-by-case". He was also vague about the criteria that an advisory panel, which will make recommendations on a new energy plan by next summer, should use in reaching its conclusions.

"Naturally, we are aiming at the best energy mix that can allay the concerns of the citizens about safety," Noda told a news conference.

The panel is chaired by the head of steel industry giant Nippon Steel Corp, a heavy user of electricity and considered partial to nuclear power, but also includes those opposed to atomic energy.

Bureaucrats with strong ties to the power industry were recently appointed to key posts at the Trade Ministry, which oversees energy policy, in what Sentaku monthly magazine said was a sign the "nuclear village" was alive and well.

Public safety fears remain high. Tens of thousands rallied in Tokyo last month urging an end to nuclear power, a hefty showing in a country where taking to the streets is rare. But sentiment could shift if consumers' electricity bills rise as utilities buy more fossil fuels and pass on the cost of renewable sources such as solar and wind, some experts say.

"Some opinion polls show that a majority of the public agree that nuclear plants should be shut down. But the high percentage is bound to fall if the public actually begins considering the fact that going without atomic power means higher bills," said Hidetoshi Shioda, a senior analyst at SMBC Nikko Securities.

Renewable energy proponents see the nuclear disaster as a chance to boost the role of such sources. They are pinning their hopes on a feed-in-tariff system enacted in August and to take effect in July 2012 that requires utilities to buy electricity from such sources and pass the cost to consumers.

But experts say the extent to which renewables expand depends on attractive pricing and changes to provisions allowing utilities to refuse to buy from renewable sources.

Momentum for reforms to separate or "unbundle" utilities' power generation and transmission arms to stimulate competition - another Kan proposal - is also waning. Noda has said only that the issue was one to consider over the long term.

The unbundling would break utilities' regional monopolies, not a welcome prospect for operators like Tokyo Electric Power, the owner of the crippled Fukushima nuclear plant.

Tokyo Electric faces a huge compensation bill, estimated by a government panel on Monday at 4.5 trillion yen for the two years through March 2013 alone, and will need funds from a government-backed scheme to stay solvent. The government, analysts say, has made clear it views Tepco as too big to fail.

"That rickety scheme, though it is not explicit, would see the monopoly maintained and nuclear plants continued to be used," said Andrew DeWit, a Rikkyo University professor who writes about energy policy.

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