Japan's Energy Supply and Security since the March 11 Earthquake
March 23, 2011
A 9.0-magnitude earthquake and a powerful tsunami struck Japan on March 11, 2011. In its wake, in addition to a mounting death toll and a trail of devastation, significant energy-related infrastructure was also rendered inoperable. In addition to the 11 nuclear reactors that were automatically shut down, other electricity generating facilities, refineries, and electrical grids also came to a halt—either by design or due to damage. What condition are these energy infrastructures in today? What is the situation of energy supply in Japan? How is Japan responding to the supply shortages? And, what is the impact of the earthquake/tsunami on Japan’s energy security?
The outage in the immediate aftermath of the earthquake included 10.5 gigawatts (GW) of nuclear power capacity and 12.4 GW of thermal power capacity, representing roughly 8 percent of Japan’s total installed electricity generating capacity. Shutdowns also affected nearly 1.5 million barrels per day (mmb/d) of refining capacity, or nearly one-third of the nation’s total refining capacity. Of the six refineries shut down (1,485 mb/d), three have since resumed operation (850 mb/d). Refineries that have been operational also increased utilization rates to make up for lost capacity elsewhere. However, it will likely take some time before full capacity is restored.
Japan has over 40 operating terminals to import liquefied natural gas (LNG). Only one small re-gasification terminal in Miyagi prefecture shut down as a result of the earthquake. The general health of LNG importing facilities would allow Japan to continue importing LNG and potentially compensate for some of the loss in nuclear power capacity.
Meanwhile, utilities with earthquake/tsunami–damaged facilities are planning on re-opening some of their thermal power plants that have been off-line prior to the earthquake. For example, Tokyo Electric Power Company has 10 thermal power plants (equivalent to 2,800 MW in capacity) that have been idle since before the earthquake. The Japanese government expects it to take several months before the idle plants can be brought back on-line. Some believe it could take much longer.
As power plants were shut down by the earthquake/tsunami, a concern for blackouts emerged. Initially, 5.27 million households lost power. As of March 22, some 220,000 households—mostly in the disaster-struck areas—remain without power. To help reduce the electricity demand and thus prevent blackouts, scheduled rolling blackouts were introduced beginning on March 14. The Japanese government has also been calling for electricity conservation by households and businesses. Thirteen prefectures—including Tokyo, but not in towns where the critical central government functions reside—were divided into smaller groups. The plan calls for each group to undergo a three-hour blackout on an ad hoc yet recurring basis. While the rolling blackouts are no longer scheduled for the Tohoku region, they will likely continue in Tokyo and its surrounding prefectures until at least the end of April.
Also, the Japanese government has decided to reduce industries’ petroleum stockholding obligations—first by 3 days (equivalent to some 8 million barrels of oil) and subsequently by 25 days (the industry obligation prior to the earthquake was 70 days of petroleum stockholdings). Japan holds some 170 days of stocks in terms of net imports, well above the 90-day requirement called for by the International Energy Agency. At the end of December 2010, Japan’s total oil stocks were 596 million barrels.
As part of disaster response efforts, the Japanese government is working to deliver fuels—including gasoline, kerosene, and light crude—to the earthquake/tsunami–struck areas and is setting up emergency service stations. As the production capacity in the industrial sector begins to climb back to the pre–earthquake/tsunami level, it may outpace the recovery in Japan’s power production capacity. Also, concerns over power shortages may return as summer approaches.
Japan is the world’s largest importer of liquefied natural gas and coal and the third-largest importer of oil. As Japan is heavily dependent on energy imports, the government has been promoting nuclear energy as a means to diversify its energy sources. Consequently, the current nuclear reactor crisis poses a serious challenge to the nation’s energy security.
Japan currently has 54 operating nuclear reactors, meeting roughly one-third of the nation’s electricity demand. Japan is the third-largest nuclear power generator in the world after the United States and France. Per the 2007 government plan, nuclear power’s share of total power generation was to increase from 27 percent (in 2009) to 40 percent by 2017 and to 50 percent by 2030. Reportedly, there are 2 new plants under construction and 12 in planning stages in Japan.
In coming months, there will likely be serious scrutiny of Japan’s nuclear power program and its regulatory system. Particular attention may be given to the life extension of aging power plants. In addition to Fukushima Daiichi NPP Unit 1, there are at least two other reactors that are older than 40 years (Tsuruga-1 and Mihama-1).
Further, problems in the nuclear sector will likely push up Japanese demand for oil and natural gas imports. As Japan has a limited capacity in coal-fired power generation, LNG will likely become an interim fuel of choice. So far, industry experts point out that the LNG market is well supplied.
The nuclear crisis may also complicate Japan’s efforts to address climate change challenges. Nuclear energy has been seen as an integral part of Japanese plans to achieve the emission reduction target of 25 percent by 2020. According to the industry, nuclear power reduces Japan’s CO2 emissions by about 14 percent per year.
Jane Nakano is a fellow in the Energy and National Security Program at the Center for Strategic and International Studies in Washington, D.C.
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