Japan Nears Nuclear Restarts—but how much and how fast?

Roughly a year since all of its nuclear reactors came offline, Japan has begun seeing rising momentum towards a nuclear restart. In early November, two reactors at the Sendai Nuclear Power Station in Kagoshima Prefecture received much needed consent to resume operation from its host prefecture governor, taking them a step closer for an actual restart. A wave of restarts would help lessen the fiscal burden on the Japanese economy and alleviate its climate challenge. Nonetheless, the pace and scope of nuclear restarts are difficult to predict as a notable share of the Japanese public remains opposed to seeing the reactors come back online three and a half years after the catastrophic tsunami, triggered by the Great East Japan Earthquake, disabled several nuclear reactors at the Fukushima Dai-ichi Nuclear Power Station. Additionally, the future role of nuclear power in Japan is difficult to ascertain as many issues in the related policy areas remain unsettled.

The Fukushima nuclear accident in March 2011 led all of the commercial nuclear reactors in Japan to come off-line by the fall of 2013. While there was exception, most of them came off line in accordance with the periodic safety inspection/maintenance conducted for one to two months in the 12 to 13 month cycle. Under ordinary circumstances, the utility seeks and gains consent for restart from the governor of a host prefecture at the end of maintenance period.

Not surprisingly, the Fukushima nuclear accident complicated this customary process. As the Fukushima nuclear accident sparked public skepticism over the nuclear sector governance and government’s crisis management capability, nuclear power generation has become a highly sensitive and divisive issue in Japan. There was no more “business as usual” for the power sector and host prefecture governors have refused to give the blessing to restart any of the country’s 48 reactors (44.3 GW installed capacity) up until early November 2014.

In an effort to bolster public confidence in the safety of nuclear power, the Japanese government removed the nuclear regulatory function from its economic ministry, which promotes nuclear energy, and in July 2012 created a separate agency, the Nuclear Regulatory Authority (NRA). Approximately one year after its creation, the NRA issued new safety criteria to improve the safety of nuclear power plants in case of a severe accident or earthquake/tsunami. The Sendai reactor units were among the first to apply for the NRA safety review. In September 2014, the NRA attested that the Sendai units meet its new safety criteria. This regulatory approval laid the ground for the local government consent in early November.

The Sendai restart will have an important effect on the Japanese economy, which has seen energy import expenditures soar in the recent years. Prior to the Fukushima accident, nuclear power accounted for roughly one-third of the country’s electricity generation. As more and more reactors came offline, natural gas stepped in to prevent severe power shortages. As a result, the Japanese consumption of liquefied natural gas (LNG) rose from 70 million tons in 2010 to nearly 87.5 million tons in 2013. This LNG consumption surge translated into a record level of LNG imports and a doubling of LNG import expenditure from ￥3.5 trillion in 2010 to ￥7.06 trillion in 2013 (￥1 trillion = $10 billion). A possible wave of nuclear restarts would mean fiscal relief to Japan. As a general rule of thumb, restarting one reactor displaces approximately 1 million tons of LNG. Therefore, restarting 20 reactors—including the two Sendai units—can theoretically bring Japan’s LNG imports back to pre-Fukushima levels. Considering Japan’s economy has just entered a recession for the third time in four years, the prospect for reducing energy import expenditures should be a very welcome reprieve.

Moreover, a series of restarts may help Japan alleviate its climate problem. According to the International Energy Agency, the greenhouse-gas (GHG) emissions intensity of nuclear power on a lifecycle basis is comparable to that of wind power and around one percent of the average emissions level for coal-fired generation. The increased use of fossil fuels to fill the gap left by the nuclear outage led Japan’s carbon emissions level to rise by 7 percent between 2010 and 2013. The resumption of nuclear power generation could lower the level of carbon emissions all else being equal and allow Japan to pursue a more aggressive target for emissions reduction. The post-Fukushima nuclear outage led Japan to revise its GHG reduction commitment in late 2013: a 3.8 percent reduction in 2020 against the 2005 levels. When compared against the 1990 levels, however, the new target is a 3 percent increase in GHG emissions and is in stark contrast to Japan’s previous commitment of a 25 percent reduction against 1990 levels—however unfeasible the target may have been.

Despite the rising momentum towards restart, there remain several uncertainties as to the pace and scope of the nuclear restarts as well as the future of nuclear power in Japan.

First, the timing of the Sendai restart remains uncertain although the Japanese government under Prime Minister Shinzo Abe is eager to see them up and running by the end of 2014 or, if not, certainly by the end of the current Japanese fiscal year that ends in March 2015. As notable as the local government consent may be, there are additional regulatory requirements that the reactors must meet before they can resume operations: the reactors must fulfill regulatory approvals concerning design details and operational safety management, as well as pass the pre-operational equipment inspection. Kyushu Electric Power Company, which owns and operates the Sendai units, has reportedly submitted a 20,000 page-long document to the NRA as part of the review on design details for Sendai Unit 1, indicating how long the review may still take.

Second, the pace of the restart for the remaining reactors is another question. It was earlier anticipated that each unit would require about half a year for safety approval for restart. The safety inspection for the Sendai units, however, became a year-long process. As of late November, about 18 units at a dozen sites are before the NRA for safety approval. If the Sendai review were to serve as any reference, it could take more than six years before the safety inspection is completed on the last of these 18 units. Conversely, the restart could pick up the pace once the new safety review process and restart procedure are tested.

Third, the scope of the restart is a major uncertainty. Given the cost of safety updates, some of the older reactors in Japan’s 48 reactor-strong fleet will not likely be put forward for the NRA review. Of the seven reactors that are roughly 40 years in operational age today, the two Mihama reactors which have operated for 42 years will most likely be decommissioned. Otherwise, the fate of the aging reactors and the size of the Japanese nuclear fleet for the near future are uncertain.

Fourth and last, the growing prospect for the Sendai restart falls short of foretelling the future role for new nuclear power generation capacity. The NRA has yet to introduce the new safety criteria for new builds. The NRA regulatory requirements for new builds would undoubtedly impact utilities’ decision on whether or not to build and operate reactors. Besides the three units that were under construction or approved for construction at the time of the Fukushima nuclear accident, there is no concrete prospect for new builds. Operating licenses are currently granted for 40 years, with a one-time extension to a total of 60 years. Unless a significant share of existing reactors applies for the license renewal, Japan’s nuclear fleet will begin shrinking significantly after 2020.

Also, the future role for nuclear power in Japan will be significantly affected by developments in a range of related policy areas. For example, Japan’s nuclear fuel cycle policies, including the rationale for having indigenous reprocessing capability in light of nuclear power uncertainty, and the technical and economic viability of its fast reactor program are the subject of public scrutiny both at home and abroad. Additionally, there is a growing question as to who would own and maintain nuclear reactors once the country’s power sector is liberalized. Japan, in the post-Fukushima struggle to reduce energy costs, has launched a three-step plan that aims to facilitate more competition in the power sector by establishing an independent system operator, deregulating the retail electricity market, and unbundling the transmission and distribution sectors. As nuclear power generation requires a significant level of front-end investment, multi-decade operation is generally needed for utilities to realize a return on the initial investment. Some utilities may no longer see owning/building nuclear power reactors as an economically feasible proposition if they become uncertain about their market competitiveness in the liberalized landscape.

Notwithstanding the remaining uncertainties, nothing should diminish the fact that the prospect of restarting reactors is a significant milestone in Japan’s journey after the Fukushima nuclear accident. More importantly, the Sendai review is the first regulatory action by the country’s first ever independent nuclear regulatory body, representing a necessary step in restoring public confidence in nuclear energy even if the future of nuclear energy in Japan is far from determined.

Jane Nakano is a senior fellow with the Energy and National Security program at the Center for Strategic and International (CSIS).

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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