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Saturday, July 23, 2011

Energy policy drift deepens shortages fears


More than four months into the Fukushima nuclear disaster, fears of power shortages appear to be deepening in the absence of a reliable and tangible state energy policy.

While the government is struggling to simultaneously find ways to address the imminent power supply crunch and ensure nuclear safety, disagreements among Cabinet ministers and a series of inconsistent steps by Prime Minister Naoto Kan's administration have done little to soothe the public's concerns.

Time is not on the government's side as all 18 reactors currently in operation nationwide are slated to go offline for periodic maintenance by around next May, according to the Ministry of Economy, Trade and Industry, while it is remains unclear when reactors shut down for regular checkups will be reactivated.

Kan told a news conference July 13 that he believes power shortages this summer and winter can be avoided as long as the public and industry continue to save energy, even if nuclear reactors shut down for routine checkups are not restarted.

But Koya Miyamae, an economist at SMBC Nikko Securities Inc., called the prime minister's statement far from reassuring because it was based on the assumption that power-saving goals will be met.

"Power-saving is a burden, so such a request makes people feel insecure. The focus should be more on what the supply side can do to make up for the lost supply, rather than depending on the actions of power users," he said.

Miyamae estimated in a recent report that an average 16 percent cut in nationwide power may be necessary next summer in the event utilities cannot restart reactors. He also warned that industrial production will decline by about 4 percent if reactors are not fired up.

Rolling blackouts implemented in Tokyo Electric Power Co.'s service area after the nuclear crisis started and the government's request to cut power consumption by 15 percent in the summer have so far helped Tokyo and nearby areas avoid massive blackouts.

Restarting reactors idled for inspections was expected to boost the power supply this summer, but such a move now looks unlikely to be realized anytime soon because of concerns among municipalities hosting atomic plants.

The government's abrupt announcement that stress tests would be imposed to determine the safety of reactors, after it initially said they were safe enough to operate, has further fueled public mistrust.

Kan's early-July announcement that such European Union-style safety assessments would be carried out sparked controversy as it effectively blocked industry minister Banri Kaieda's attempt to win local consent to restart two of Kyushu Electric Power Co.'s reactors at the Genkai nuclear plant in Saga Prefecture.

The latest statement from Kan that Japan should seek a "society that does not depend on nuclear power generation" also triggered a backlash because other Cabinet ministers were not consulted. Kan said later that the remarks reflected his "personal" view.

Kaieda has stressed the need to restart reactors that are confirmed to be safe, but speculation is rife that Kan, an advocate of renewable energy sources, is reluctant to give the green light.

Analysts have also suggested that the prime minister's proposal to end atomic power was aimed at boosting his dismal support rating, allowing him to cling to power a little longer, even though he has already announced his intention to resign.

Kazunari Kaino, who researches Japan's energy policy, said that METI should not have rushed to restart the Genkai reactors without setting "a new safety standard for nuclear reactors created by a new organization." However, the prime minister also acted in a "chaotic manner," he added.

"The government has acted inconsistently in the past months . . . it is not sure whether a decision made now would be implemented later and we don't know who we should rely on. The future of the country's energy policy is uncertain," said Kaino, who belongs to the government-affiliated Research Institute of Economy, Trade and Industry.

He also warned that a vacuum over the nation's energy policy spanning just a few months could have an impact lasting several years or even decades, as international energy procurement contracts cover a long period of time.

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