Of the challenges posed to Japans security and economy by the megadisaster of March 11, 2011, none is more consequential than the future of nuclear power. The Japanese government had previously hoped to increase the share of nuclear power generation from the current 30% to 50%. That 50% target will now be virtually impossible to achieve. On the other hand, there is a danger that Japan will vacate the nuclear business altogether. With all of the nations 54 nuclear power plants set to shut down by April for stress testing, any complications even unrelated to the reactor core could make it politically challenging to restart the plants. And nuclear power plants are not designed to be shut down for long periods of time, meaning some complications could emerge.
Still, my sense is that if there is successful stress testing, the political consensus in Japan will be for resumption of nuclear power generation. The economic and national security implications of doing otherwise are simply too formidable. Japan relies on imports for 99% of oil and has only 100 days of strategic reserves. LNG will now become more important in Japans energy mix, but the country only has a 2-3 week strategic reserve of LNG because of the technical challenges of long-term storage. Meanwhile, political pronouncements that Japan can achieve 20% or more of power generation from renewables ignores the basic economics of the energy sector. So without nuclear power, Japan would be extremely vulnerable to supply shocks. Moreover, the cost of energy would increase significantly, jeopardizing economic recovery and putting in doubt the willingness of Japanese corporations to retain any further manufacturing in the country.
Then there is the international dimension. GE and Westinghouse have strategic relationships with Hitachi and Toshiba. The American companies could probably build power plants abroad (and somewhere upward of 100 nuclear power plants are likely to be built around the world in the decades ahead), but it would be costly and complicated to go alone. Meanwhile, if Japan gets out of the nuclear technology export business, the field would be ceded to Russia, China and other countries with less scrupulous safety and non-proliferation records. It appears that the DPJ government is leaning heavily towards continuing support for infrastructure exports, including nuclear. However, political leadership is still needed to make sure Japan not only stays in the game, but also plays a leadership role in setting international standards.
— by Michael Green, Senior Advisor and Japan Chair, Center for Strategic and International Studies
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