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Japan’s Economic Troubles Spur a Return to Nuclear

Some of the nuclear power plants shut down after the Fukushima disaster could restart soon.
March 8, 2013

As the second anniversary of the nuclear disaster at Fukushima nears, Japan is considering restarting nuclear reactors across the country in an effort to ease a recession that began at the end of 2012 after years of economic stagnation.

Fukushima power plant
Sole survivor: The nuclear power plant at Ohi is the only one currently operating in Japan. It was restarted over a year after the Fukushima disaster led the country to shut down its reactors.

All 50 of the country’s reactors were shut down after the disaster, when a powerful earthquake and tsunami caused a cascade of problems at the Fukushima Daiichi nuclear power plant that culminated in large releases of radiation. Just two reactors have since been restarted.

This week, the CEO of Areva, which supplies fuel for Japanese nuclear power plants, predicted that two-thirds of the reactors in Japan will be restarted within the next several years, and that half a dozen may restart by the end of the year. Prime Minister Shinzo Abe recently promised to begin restarting plants within the year, but it might be hard to meet that goal because the necessary safety upgrades will take some time.

Public sentiment in Japan turned sharply against nuclear power in the wake of the disaster, which displaced thousands from their homes. But shutting down the reactors has strained the country’s electricity supplies, making it necessary to import large amounts of fossil fuels to make up the difference.

In Japan, natural-gas power plants can cost several times as much to operate as nuclear power plants, says Paul Joskow, the president of the Alfred P. Sloan Foundation and formerly a professor economics at MIT. But restarting the nuclear plants will require convincing local governments to accept a new regulatory regime that’s been put in place to improve safety, and “that hasn’t happened yet,” he says. A recent survey suggested that half of all Japanese mayors would approve plant restarts if reactors met the new safety regulations.

The impact of the disaster at Fukushima has been felt around the world. The most striking example is Germany, which quickly shut down some of its nuclear power plants and made plans to close the rest. This has forced the country to rely more on fossil fuels, including coal, even as it attempts to meet strict targets for reducing greenhouse-gas emissions (see “The Great German Energy Experiment” and “Can Japan Thrive without Nuclear Power?”).

Even China, which has led the world in nuclear reactor construction, has scaled back its plans and become more selective about where it plans to build its plants, Joskow says. Nuclear power has also stalled in other countries, including the United States, but this is mostly due to the high cost of building new plants, not to the safety concerns emerging from Fukushima.

Before the disaster, Japan had relied on nuclear power for about a quarter of its energy and had planned to increase that to roughly 50 percent by 2030 to ease dependence on imported fossil fuels and reduce carbon dioxide emissions, according to a report this year from the Institute of Energy Economics in Japan. The country has few domestic sources of energy. The report said that the shutdown of reactors in Japan, and the ensuing increase in fossil-fuel consumption, has hurt the balance of trade and increased electricity prices by 15 to 20 percent. It has also led to the loss of about 420,000 jobs as manufacturing is transferred out of the country, the report said.

The economic problems seem to be shifting public opinion in Japan. Last September, the ruling party issued a plan to permanently phase out nuclear power (see “Japan Approves Nuclear Phase-Out by 2040”). But it quickly softened its stance (see “Japan Isn’t Going Nuclear Free After All”). In December, the government lost power to Prime Minister Abe’s party, which promised to improve the economy and is emphasizing the need for nuclear power.

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