Japan’s Energy Strategy: With Or Without Nuclear?

Three years after Fukushima, Japan is still debating its energy future.

This is a sample article from the April 2014 issue of EEnergy Informer.

Three years ago on 11 March a devastating earthquake and tsunami hit Japan with unprecedented ferocity, wiping out entire coastal towns and demolishing Tokyo Electric Power Company’s (TEPCO) Fukushima Daiichi Nuclear Plant. The accident not only devastated the plant, but also the reputation and fortune of its owner and operator, TEPCO, once among the biggest privately owned global power companies.

The tremors had repercussions across the globe, including in Germany, where Chancellor Angela Merkel’s government decided to shut down half its operating reactors immediately with the remaining slated for phase out by 2022. A handful of other countries, Switzerland for example, said they will not replace their existing reactors once they retire. Italy, which had an on-again, off-again nuclear policy, turned it off again. Other countries had to go the drawing board, re-examining the safety and disaster preparedness of their reactors.

Fukushima’s legacy?

France and South Korea, both nuclear happy countries, have had second thoughts on how much nuclear they would want. The US and the UK, where both governments are trying to encourage more nuclear reactors built, are still mostly trying. China, on the other hand, appears to have not noticed that there was a major accident in Fukushima.

Nuclear experts — and non-experts — have, of course, been making all sorts of predictions on what the longer-term legacy of Fukushima may be. Christoph Frei, Secretary General of the World Energy Council (WEC), for example, in a prepared statement to commemorate the accident said,

“In our study on nuclear energy in March 2012, we found that Fukushima had had limited impact on the global nuclear outlook and this was particularly so for non-OECD countries. But two years on, the situation has evolved. The market attractiveness of nuclear energy has now been undermined by the availability of cheap natural gas, collapsing solar prices, uncertainty of CO2 prices, along with nuclear energy’s rising safety-related costs. This will have significant consequences for our ability to deliver a diverse fuel mix for a secure, affordable and environmentally sustainable energy future.”

President Obama, who must have learned the difference between what he wants and what he may be able to achieve, frequently refers to US energy strategy as all of the above, which suggests a mixture of fossil fuels, nuclear and a growing contribution from renewable resources. As it turns out, that is more or less what politicians in Japan also appear to be pursuing — assuming they can keep nuclear as a viable option in their future energy mix.

For Japan, a resource poor island nation in a region increasingly competing for imported liquefied natural gas (LNG) with South Korea and coal with both Korea and China, keeping the nuclear option alive is a top priority and a sensible one — if it were not for the growing public opposition to nukes, which gained momentum following Fukushima.

Before and after Fukushima

Following the accident all of Japan’s nuclear reactors were shut down for safety reasons (graph above). Only 2 have restarted, you might say, for symbolic reasons while 46 GW of nuclear capacity is sitting idle awaiting safety reviews. TEPCO’s abysmal record in managing the aftermath of the accident and the way it has handled — or mishandled — communications with the public has not helped to smooth the public’s uneasiness about the future safety of reactors in a country sitting on tectonic faults.

Successive governments have had different views on the future role of nuclear energy. The current Prime Minister, Shinzō Abe, is pro-nuclear and has proposed to gradually re-start the existing reactors that are deemed to be safe, and if all goes well, build a few more, but not as many as were envisioned before Fukushima.

Room for solar growth in Japan?

Not everyone agrees. The anti-nuclear lobby, pointing to the industry’s past spotty record and lack of transparency, says neither the operators nor their watchdog can be trusted. Moreover, the lights have miraculously stayed on despite the near-total nuclear shut-down. Why not move forward by phasing out all remaining reactors, as in Germany, relying on more energy efficiency and renewables, the anti-nuclear lobby asks?

If Germany, a major industrial powerhouse can do it, why not Japan? There is certainly a lot of future potential for more renewables. Japan is blessed with hydro, geothermal, wind, solar and tidal resources. The problem, as in many other countries, is their intermittency and, in the case of Japan, the mountainous topography making it challenging for a densely populated country consisting of several major islands with poor transmission interconnections operating on two frequencies, a historical oddity.

Nuclear comeback or wishful thinking?

According to Poyry, a consultancy, Japan’s solar capacity, currently around 10 GW, may be increased to 60 GW by 2050, give or take some (graph above). Given that total demand is not projected to grow much over time — Japan is a mature economy like other advanced OECD countries — one can envision a future with a more diverse generation portfolio (graph on left), potentially limping along without any nuclear plants.

As Japan’s recent experience has demonstrated, a future without nuclear is not inconceivable. The question is, would it be desirable, reliable, and ultimately affordable? Germany is likely to find out. Japan is yet to decide.

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Article About Tesla Batteries on RenewEconomy

Dr. Sioshansi has a new article available on the RenewEconomy website. It is titled “Tesla battery business plan gives energy utilities strife”. To read it, click here.

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April 2014 EEnergy Informer

The April 2014 issue of EEnergy Informer is now available. Here is the contents list:

  • In Turbulent Times US Has Less To Worry
  • Future Of US Coal: More Exports
  • Japan’s Energy Strategy: With Or Without Nuclear?
  • Appliance Energy Efficiency Standards Matter
  • California Marching Ahead On Climate Target
  • European Electricity Prices Rising
  • Distributed Energy Poised For Growth
  • Tesla’s Business Plan Gives Utilities Strife
  • Apple’s CEO: Don’t Like Green? Get Out Of Stock
  • Finnish Nuke Delayed Again
  • US Solar Growing On Steroids, For Now
  • Has Time Arrived For Electricity Pre-payment Schemes?
  • Do Renewables Contribute When Most Needed?

You can request a sample issue of EEnergy Informer here.

Posted in EEnergy Informer, TOC | Comments Off

Article About Google on RenewEconomy

Dr. Sioshansi has a new article available on the RenewEconomy website. It is titled “Is Google an information or energy company?”. To read it, click here.

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Natural Gas: The Ultimate Bridge To Nowhere

US Shale gas may be a game changer, but not a substitute for climate policy.

This is a sample article from the March 2014 issue of EEnergy Informer.

Every now and then, politicians propose pet projects that may get them local votes but not much else. There have, for example, been numerous proposals to build bridges where the traffic volume would not remotely justify the investment costs. They are commonly referred to as bridges to nowhere.

In this context, many — this newsletter’s editor included — believe that the current bounty of cheap and plentiful shale gas, while certainly welcomed, is not and should not be viewed as a panacea to solve all US energy and environmental problems, because it can’t and won’t.

A happy American shale gas story

In his State of the Union address in late January 2014, President Obama, contradicted himself, perhaps unwittingly, when he reiterated his support for climate science by noting that, “The debate is settled. Climate change is a fact,” while vouching his support for increased extraction of, and reliance on, natural gas.

President Obama said, “If extracted safely, it’s the bridge fuel that can power our economy with less carbon pollution that causes climate change.” He is, of course, correct that the conversion from coal to natural gas plus the downturn in the US economy has reduced CO2 emissions from the power sector to their lowest levels since 1994. However, as noted by a posting on The Equation, the website of Union of Concerned Scientists (UCS) “Natural gas is still a fossil fuel that emits CO2 when combusted … contributing to global warming in the process.”

Following the SOU address, numerous others objected to the view that just because natural gas is cleaner than coal, it cannot serve as America’s solution to climate challenge. As observed by this newsletter in the past, if a heavy smoker decides to smoke half as many cigarettes as he used to, that would be a move in the right direction, but not a cure to his unhealthy addiction.

Heating up the planet

UCS posted a graph on its website (reproduced above) that speaks volumes. It shows that US greenhouse gas emissions under a scenario where US would transition to a natural gas dominated electricity future would barely change between today and 2050 “because, in addition to replacing coal, natural gas generation would grow to replace aging nuclear plants and help meet the projected growth in electricity demand.”

A number of others had a similar take on the president’s message. John Farrell, who frequently contributes to Renewable Energy World.com, for example, said, “Natural gas is not a bridge fuel, it’s a gateway drug.” In an article dated 3 Feb 2014, which was picked by other publications, he noted that, “natural gas powered electricity still pours 1.22 lbs of CO2 into the atmosphere for every kWh of electricity it produces. That’s 6 tons of CO2 per year from every household in America if its electricity were completely generated with natural gas.”

Henry Hub natural Gas Spot Price

Pointing to traditional volatility of prices, which became noticeable during the recent cold spell in parts of America, many observers believe that investing in massive new natural gas infrastructure will simply bind us to the fuel.

Farrell believes that “expanding natural gas use in electricity and transportation is risky, it’s dirty, and — most of all — it’s unnecessary,” adding, “Natural gas isn’t a bridge, it’s a relapse. And it’s time we admit it.”

Posted in EEnergy Informer, Environment, Natural Gas | Comments Off

Coming Soon – New Book on Distributed Generation

Distributed Generation bookThe rapid growth of distributed generation, solar PVs, and micro-grids represents a significant milestone in the evolution of the electric power industry, where advances in technology coupled with rapidly falling costs are allowing a growing number of customers to self-generate some or most of the electricity they need – thus bypassing the grid-supplied electricity. This decentralized energy revolution, now manifested in a number of high retail tariff regions such as Germany, California and Australia, is expected to apply to other regions over time.

The impact of customer self-generation on the traditional revenue stream of incumbent suppliers will grow and could be quite significant. Experts refer to solar PVs, micro-grids, and other means of self-generation and storage, including fuel cells and storage devices as disruptive technologies. As their costs continue to fall and their reliability and performance improves, they will increasingly compete with more expensive grid-supplied power. The book covers technical, economic, regulatory, and policy implications associated with the rapid rise of decentralized generation with perspectives from different parts of the world.

Key Features of the Book

  • Provides the latest developments in the growth of distributed generation, rooftop solar PVs and micro-grids covering the US, Europe and Australia
  • Offers diverse insights and perspectives from the vintage point of technology and business experts on the implications of distributed generation on the electric power sector
  • Includes analysis of the impact of decentralized generation on the grid and on traditional utility business model

We expect the book to be available for pre-order in April.

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Article About US Retail Markets in Energy Spectrum

Dr. Sioshansi has an article in the latest edition of Energy Spectrum magazine. It is titled “State of retail electricity markets″. To read it, click here (PDF).

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March 2014 EEnergy Informer

The March 2014 issue of EEnergy Informer is now available. Here is the contents list:

  • BP: Global Demand Growth In Gradual Decline
  • Natural Gas: The Ultimate Bridge To Nowhere
  • California Renewable Target: How High Is High Enough?
  • EPRI: Start With A Clean Slate
  • State Of Retail Electricity Markets
  • World’s Largest CSP Operational
  • Is Google An Information Or Energy Company?
  • Energy Storage To Reach 40 GW By 2022
  • Who Gains Most From Fuel Subsidies
  • Why Is It Hard To Put A Number On Nuclear Costs
  • 8 MW Wind Turbine Starts Spinning
  • German Renewable Correction: In A Bind
  • Do Renewables Contribute When Most Needed?
  • Impact Of Distributed Generation On Utility Business Model
Posted in EEnergy Informer, TOC | Comments Off

Why Is EIA Underestimating Renewables?

The disparity between recent trends and future projections is puzzling.

This is a sample article from the February 2014 issue of EEnergy Informer.

that is the question many independent analysts would like to know. The Energy Information Administration (EIA), is an independent entity within the US Department of Energy, specifically set up to collect, analyze and disseminate unbiased, non-partisan information on energy-related topics. So why is it persistently and chronically under-estimating the growth potential of renewables in its long-term projections? It is a puzzle, perhaps explained by outdated models it uses, or — more likely — outdated cost assumptions that are not supported by recent facts or trends.

Recent data from the Energy Infrastructure Update compiled by the Federal Energy Regulatory Commission’s (FERC) Office of Energy Projects indicates that renewables make up a growing percentage of all new generation coming on line in the US in 2013. Renewables accounted for a stunning 100% of all new capacity additions in Nov 2013, 99% in Oct 2013 and nearly 35% for the first 11 months of 2013. Perhaps these figures are unrepresentative of longer-term trends, but by all indications, renewables are likely to grow at a much faster clip than EIA projects.

Renewable sources now account for 15.9% of total installed US generating capacity, surpassing nuclear and oil combined, which are 9.2% and 4.05%, respectively.

Renewables: Growing slice of pie

Critics of EIA’s projections are crying foul. “FERC’s latest renewable energy capacity data, coupled with the actual electrical generation from renewable sources, reveal a growing disconnect with the longer-term projections being issued by EIA,” according to Ken Bossong, Executive Director of the SUN DAY Campaign, a pro-renewable advocacy group. “With virtually all new electrical generation coming from renewables during the last two months (Oct & Nov 2013), it is obvious that solar, wind, biomass, geothermal, and hydropower are rapidly outpacing EIA’s unduly conservative forecasts.”

Mr. Bossong, like many others, is troubled by the apparent inconsistencies between recent FERC data — reporting record new renewable installations — and EIA’s projections — which appear increasingly disconnected from the recent trends and indicators. He notes that, “ … the Annual Energy Outlook 2014 (released in mid-Dec 2013)… projected that renewable sources would provide only a paltry 16% of the nation’s electricity supply by 2040. EIA’s own data reveal that renewables were already providing 14.2% of the nation’s electrical generation as of June 30, 2013.” That would mean a measly 2% growth in renewable share between 2013 and 2040, a 27 year period.

Is EIA low balling renewables?

He has a point. Someone is obviously not telling the truth — certainly not the whole truth.

Posted in EEnergy Informer, Renewables | Comments Off

Article About US Generation in Energy Spectrum

Dr. Sioshansi has an article in the latest edition of Energy Spectrum magazine. It is titled “US gas to overtake coal by 2035″. To read it, click here (PDF).

Posted in Article, Generation | Comments Off