Japan's Energy "Options"

The Japanese government has recently announced power supply "options," which it says will be used as a basis for a "national debate," the outcome of which will be reflected in the formulation of a new Basic Energy Plan. But what is it about the deceptive methodology of the "options" that always leads to the conclusion that nuclear power is "necessary"...?

The Fukushima Daiichi Nuclear Power Station catastrophe has caused something of a national debate, if such a thing can be said to occur in Japan, on Japan’s energy future. The core of the debate is, naturally, how much, if any, nuclear power will Japan require in the coming decades and how much power can be produced by renewable energy technology or supply requirements reduced by energy conservation and efficiency efforts. Power companies, business circles and the politicians, bureaucrats, academics and so on who constitute the ‘nuclear village’ claim that without nuclear power Japan will face power shortages and try to scare the general public into acceptance of nuclear power with dire warnings of blackouts during the peak summer power consumption period. Nuclear opponents, on the other hand, say that there is no non-nuclear energy/electrical power shortage in Japan and that nuclear power stations are simply not necessary.1

Japan’s new energy policy, the “Innovative Energy and Environmental Strategy” is due to be unveiled sometime during the summer of 2012 and is supposed to reflect discussions on reviews of the Framework for Nuclear Energy Policy and the Basic Energy Plan. The Basic Energy Plan was revised in June 2010, but is now being reviewed ‘from scratch’ since it has a strong bias towards nuclear power.2 The Plan is drawn up by the Advisory Committee for Natural Resources and Energy, a consultative body of the Minister for Economy, Trade and Industry (MITI), and the review of the Plan has included a number of options for the composition of power supply from different sources (nuclear power, thermal, renewables, etc.). These options have been published in the Japanese press recently, and are as follows.

No figure was given for total energy or electrical power requirement in 2030.

Luckily, we have recently been treated to a rare look into the process of discussions in one of the subcommittees that has been deliberating these options. This appeared in the form of a monthly mail magazine sent out in English by Japan for Sustainability (JFS).3 Under the title “Re-Examining GDP Growth Projections to Plan Japan's Future Energy Policy,” the author Junko Edahiro, representative of JFS and a member of the Fundamental Issues Subcommittee under the Advisory Committee on Natural Resources and Energy,4 describes the discussions in the committee meetings on the various energy ‘options’ and the economic growth scenarios that form their basis. The English article also contains a link to a Japanese PDF (originally a PowerPoint presentation) that was submitted to the subcommittee as an opinion by Ms. Edahiro on March 9, 2012. This PDF contains detailed material supporting Ms. Edahiro’s argument and the discussion below will be based on the English article and the Japanese PDF. Slide numbers mentioned below refer to the slide numbers in the Japanese PDF

Regarding the lack of a figure for the total energy requirement for the 2030 power structure, Ms. Edahiro says, “This discussion gives me the impression that we are being told to think about how to cut a pie into pieces without knowing the size of the entire pie. I've been saying at the meetings that we need an estimate of the quantity of energy required before discussing how to secure the supply.” Quite right, but not unusual. Even the well-known Tetsunari Iida, sitting on the same subcommittee, and his Institute for Sustainable Energy Policies (ISEP) do the same thing – giving energy source mixes for the power supply for 2020 or 2050, but failing to mention how large the pie is.5 (Strangely, Ms. Edahiro also gives a similar power structure graph for 2020 and 2030 on Slide 41 of her PDF.) Perhaps it is hard to calculate, but all the non-expert people I have talked to have assumed that the total energy/electrical supply in 2050, when ISEP says that it will be possible to supply 100% of electrical power by renewables, will be roughly the same as it is today. The graph on p.1 of ISEP’s paper makes it look like all electrical power in 2050 is supplied by renewables, but has been reduced by 50% through energy savings, and there is no indication of the actual size of the power supply. Less than we are consuming today, I’m sure, but how much less, and what might that mean it terms of lifestyle? I am not suggesting that it will necessarily be a worse lifestyle than we ‘enjoy’ in Japan today – one of the major points of Ms. Edahiro’s article is that it may well be a better, more relaxed, happier, less stressed-out lifestyle – but it will be different from what we have today. Perhaps that is what Tetsunari Iida wants to avoid saying, though I have no idea why he would want to avoid saying it. Perhaps that is what the nuclear village wants to avoid saying, since it might mean that if we are living in this low-energy 2030 or 2050 society we might not need nuclear power.

So we want to know just how much energy/electricity Japan will need for its economy in 2030 or 2050. To estimate the amount of energy that will be required at some point in the future, we need to have some way of calculating what the level of economic activity will be at that time. We can do this by knowing the current GDP, which is given by multiplying productivity by the number of workers in the labour force, and then by estimating the labour force and productivity in the target year. Calculating precise figures is difficult, but pretty good estimates can be made. This will result in an estimate of the amount of energy required for that level of economic activity, leading then to a number of options on how the energy can actually be supplied. At the same time, this will also result in an annual growth rate for the period up to the target year. The current Basic Energy Plan of June 2010 assumes an annual growth rate of approximately 2% for Japan for the period 2010 to 2020, then an approximate 1.2% for the period 2020 to 2030 (which is about the same as called for in the Japanese government’s New Growth Strategy6), with oil prices of approximately $120/bbl for 2020 and $170/bbl for 2030 (which is taken from the IEA’s “World Energy Outlook 2009”) (Slide 10). But note that these annual growth rates do not seem to have been calculated using the method mentioned above. They appear to be more like wishful thinking “called for” in the New Growth Strategy for the purposes of alleviating Japan’s wobbly pension, social security and public debt problems.

In the Fundamental Issues Subcommittee, the committee secretariat firstly proposed two growth scenarios, apparently based on cabinet office calculations:
(1) 1.8 percent this decade and 1.2 percent from 2020 (the “growth strategy” scenario), and
(2) 1.1 percent this decade and 0.8 percent from 2020 (the “prudent” scenario).

Ms. Edahiro, however, pointed out that Japan's labour force is estimated to decrease by 19.2 percent, or 13 million workers, between 2000 and 2030, due to the rapid aging of the nation’s population. (See graph in Slide 14, which shows that Japan’s population peaked at around 2005 and is now in decline).

Ms. Edahiro goes on to propose that projections of energy/electricity demand be based on the growth rate of GDP per capita rather than on total GDP, since Japan’s “economically affluent lifestyle depends on the level of national income per capita, not on the overall size of the economy.” What happens when we make growth predictions based on the reduction of the size of the labour force and per capita GDP?

Japan's annual GDP growth rate from 2000 to 2010 was 0.74 percent, while the annual GDP growth rate per capita was 0.65 percent. Calculating on the basis of these numbers and the reduction in the size of the labour force, the annual growth rate per capita can be estimated at 0.3 percent this decade to 2020, and zero from 2020 to 2030 (Slide 18). Ms. Edahiro estimates that the real GDP in 2030 would be only 3.7% greater than in 2010, i.e. an effective zero-growth scenario, whereas under the scenario envisaged by the current Basic Energy Plan it would be 40% larger. Assuming that there are possibilities for renewable energy expansion and increased energy conservation and efficiency, this clearly shows a huge gap in perception between the bureaucracy, which maintains that nuclear power is necessary for economic reasons, and people like Ms. Edahiro, who are not necessarily “anti-nuke,” but who base their estimations for the necessity of nuclear power on more realistic growth scenarios.

At this stage, the committee secretariat added the following to the growth scenarios:
(3) The case suggested by members, which assumes that Japan will maintain its per capita GDP growth and estimates the real GDP growth rate at 0.3 percent this decade and at zero percent from 2020.

Some committee members complained that this low growth rate in scenario (3) would cause some difficulties with government policies, such as the pension system. Ms. Edahiro rebuts this argument by saying,

“… I believe people who address policies based on easy assumptions that the size of a pie will get larger should reconsider their way of thinking… It is more important that we consider how to sustain those things under the situation of a realistic growth rate.”

I would interpret this as meaning, “What’s the point of having nuclear power if there is no basis in reality for the economic growth that it is intended to support?”

It should also be pointed out that, although not mentioned in Ms. Edahiro’s article, the PDF shows in Slide 20 that the real GDP of Germany has been rising for more than 20 years while the energy supply has gradually fallen. This is compared with Japan, where it looks much more like energy supply and real GDP rise or fall together. Presumably, this is due to Germany’s efforts to promote renewable energy as well as energy conservation and efficiency improvements, which have been stifled in Japan by the power companies and the nuclear village, who do not wish to see any competition for their energy regime. Thus, even if Japan’s real GDP is 40% larger than what it was in 2010, that does not necessarily mean that 40% more energy will be required to fuel it or that the energy must come from thermal (fossil energy) or nuclear sources.

Finally, in the PDF slides, Ms. Edahiro points out that electricity is not even the Japan’s biggest energy problem. Oil is. Oil supplies 52% of Japan’s final energy demand (electrical power is 26%, coal 11%, natural gas 10%, industrial steam 4%, and renewables are negligible – Slide 23). What Japan needs to do is reduce consumption of vehicle fuel through the introduction not only of hybrids and EVs, but also by allowing the use of bioethanol and biodiesel. This is another area where the big energy companies have tried to block off competition to their fuels by delaying tactics or by the use of ethyl tert-butyl ether (ETBE) as a 3% gasoline additive instead of making serious efforts to introduce the use of bioethanol, e.g. by small, private enterprises making use of waste plant materials and so on. No one in Japan seems to have woken up to the fact that there are plenty of countries in the world where large numbers of vehicles are run on 100% biodiesel fuel or bioethanol (Slide 31 - or that in countries like Brazil there are thousands of flexible fuel vehicles (FFVs), which make it possible for cars to run on any mixture of gasoline and ethanol). It is very interesting to hear the gasps from Japanese audiences when I tell them that all gasoline cars can run on ethanol with certain, relatively easy, changes to the fuel injection system (and tell them about the existence of FFVs, some of which appear to be running on Japanese roads with neither the owners nor the dealers knowing it!) and that Henry Ford actually designed his first mass-produced cars to run on ethanol, not gasoline, and were effectively FFVs!

There are a large number of other issues involved here. The IEA estimates, mentioned above, that oil prices will be approximately $120/bbl in 2020 and $170/bbl in 2030 are a joke. Anyone can make a guess, I suppose, and they might be right, but at the same time, the tendency for oil-exporting countries to consume more and more of their production domestically as their resources deplete also suggests that the amount of oil reaching Japan’s shores might be zero in 2030.7 Who knows? What’s the betting that Japan will not be importing any fossil energy in 2050? If we think like Tetsunari Iida and imagine that 100% of Japan’s energy (not just electricity) will be supplied by renewables in 2050, then perhaps we need to start thinking about what kind of agriculture Japanese people will be doing in 2050, what Japan’s population will be then, and whether Japan will need to import food or how it will do so if it needs to. These are just examples; there are hundreds of energy issues that all countries will have to face in the coming decades. The extent to which we are able to make use of one energy resource or another defines our societies and lifestyles. The Oil and Gas News, an Internet newsletter sent out by the Energy Daily (www.energy-daily.com) proclaims oil and (natural) gas to be the “fuel of civilization.” Quite right. It will not even be possible to operate nuclear reactors for more than a year or so without (relatively cheap) oil supplies.

For the time being, though, how and why the nuclear village bureaucrats, politicians and others abuse figures and ‘options’ to persuade the Japanese people that nuclear power is necessary for the future of Japan’s economy is a story the Japanese people need to know. Along with the Japanese earthquake/tsunami problem and the problem of nuclear waste (symbolized by the continuing horror story at Fukushima Daiichi’s extremely precarious Unit 4 fuel pool), it is quite clear that the Japanese people should not be wasting their time trying to decide how much nuclear power they want. The answer should already be patently obvious: ZERO.

-----

1. Nishio, Baku, Complete Halt of All Nuclear Power Plants in Japan – But for how long can restarts be prevented? Nuke Info Tokyo No.148, May/June 2012 gives more detail. Available for download in PDF format (in English).
2. Ibid.
3. Edahiro, Junko, Re-Examining GDP Growth Projections to Plan Japan's Future Energy Policy
Japan for Sustainability Newsletter #117, 31 May 2012. Archived at http://www.japanfs.org/en/mailmagazine/newsletter/pages/032001.html
The Japanese PDF mentioned in the article.
4. Web pages of the subcommittee (in Japanese).
5. E.g. ISEP, From “Haphazard Blackouts” to a “Strategic Energy Shift”, 23 March 2011, page 1, (in Japanese).
ISEP, Directionality of Post 3/11 Nuclear Power and Energy Policy, page 9, (in Japanese).
6. For English documents on Japan’s New Growth Strategy, or see the other English materials.
7. Brown, Jeffrey J. and Samuel Foucher, A quantitative assessment of future net oil exports by the top five net oil exporters, Energy Bulletin, January 8, 2008,