Chairman’s Message

Tatsuya Terazawa

Tatsuya Terazawa
Chairman and CEO
The Institute of Energy Economics, Japan

Chairman’s Message
-Nuclear policy in Japan:
a new phase of discussion-

Message for October 2022

Japan is now entering into a new phase of discussion on its nuclear policy. At the end of August, Prime Minister Kishida instructed the government to study new directions for nuclear policy. While the final decisions will be made only by the end of this year, the instructions received from the Prime Minister are very significant and deserve close attention. This is the first time since the 2011 Fukushima nuclear accident that a Japanese Prime Minister is actively pushing the nuclear agenda.  

Key points

Prime Minister Kishida has instructed the government to study new directions for Japan’s nuclear policy. The proposed new directions will be reviewed and decided upon by the end of this year. The points to be studied include:

  • Restart of 17 nuclear reactors.
  • Extension of the operating life of existing nuclear reactors.
  • New construction of advanced nuclear reactors.

  • 1. Prime Minister Kishida instructions

    The Prime Minister asked the government to study a number of nuclear related issues and to report back with recommendations by the end of this year.

    (1) Restart
    With the retirement of 24 nuclear reactors, mainly resulting from the Fukushima nuclear accident, there remains 36 operable nuclear reactors in Japan, including 3 units under construction. The Prime Minister Kishida directed the government to support the restart of 17 of those 36 nuclear reactors.
    Among the remaining 36 units, 10 units restarted at least once but only 6 of them are currently in operation. The other 4 failed to complete the construction of their back up control (anti-terrorism) centers to respond to 9/11 type attacks, within the time frame required by the Nuclear Regulation Authority (NRA). Prime Minister Kishida already asked for 9 out of the 10 units to be in operation by next winter.
    In addition to these 10 units, 7 have already satisfied the strengthened safety regulations introduced after the Fukushima accident and obtained NRA’s approval. These two groups comprise the 17 units that Prime Minister Kishida aims for restart.

    (2) Life Extension
    After the Fukushima nuclear accident, and as a matter of principle, the government introduced regulations limiting the operating life of nuclear reactors to within 40 years. Subject to the NRA approval, the regulations allow for a ‘once only’ extension of 20 years.
    The power companies are struggling to obtain the 20-year life extension approval, and it is not easy. Even if they manage to obtain the extension, the 60-year limit will be reached in a matter of a few decades. The retirement of a number of nuclear units would make the reduction of CO2 more difficult for Japan.
    Considering the fact that the US has already authorized up to 80 years of operation for some reactors, Prime Minister Kishida has instructed the government to consider the possibility of extending the operation of reactors beyond 60 years. Such a change would require a legislative action which could be politically challenging.

    (3) New Construction
    Ever since the Fukushima accident, the mention of constructing new nuclear units has been considered a political taboo. Prime Minister Kishida has directed the government to study the possibility of approving new constructions, under one condition. They must avoid merely copying the existing models but must reflect the next generation innovative reactors, with enhanced safety. It is understood that these reactors are mainly advanced light water reactors but they may also include SMRs (Small Module Reactors).

    2. The background

    The instructions given by Prime Minister Kishida came as a surprise and they were far more ambitious than expected. Several factors might have prompted him to give such ambitious instructions.
    The significant rise in energy prices certainly must have been a major factor. People and industry are expressing growing concerns about the rising cost of energy. The use of existing nuclear reactors should help suppress the cost increase.
    Concerns about the instability of power supply might also have been a major factor. On March 22 of this year, Eastern Japan faced the possibility of power shortage and a similar concern emerged again at the end of June. Without the restart of nuclear reactors, it is expected that Japan will face an even higher risk of power shortages this coming winter.
    As Japan is not endowed with an abundance of renewable energies, there is a growing recognition that without nuclear power, it would be extremely difficult to achieve carbon neutrality.
    The war in Ukraine has highlighted the vulnerability of Japan depending heavily on the energy imports from other countries. There is a wider understanding that to enhance our energy security, Japan would need to have nuclear power. At the same time, the use of existing nuclear reactors in Japan could free up large quantities of LNG for the world to use.
     The recent decisions in France, UK and in a number of Eastern European countries to start the construction of new nuclear plants have been acknowledged in Japan. The world developments often have significant impacts on the discussions within Japan. 
     It is also understood that TEPCO, which is struggling to pay for the damages caused by the nuclear accident, may never return to a financial normalcy without the restart of its other nuclear reactors. The finance of TEPCO needs to be improved substantially to ensure that it could continue repaying for the damages without needing greater help from the government.
    There could also be a timing consideration. Prime Minister Kishida triumphed in the Upper House election which was held in July. Unless he decides to dissolve the Diet early, there would be no national level elections for the next three years. This window will allow difficult political decisions to be made. Nuclear is certainly one of the most difficult political questions.

    3. The significance

    These instructions are not decisions yet. Prime Minister Kishida is just asking to study these issues but his instructions are considered as reflecting the policy direction of his government.
    Nuclear issues have been considered as taboos since the Fukushima nuclear accident. Even the late former Prime Minister Shinzo Abe stayed away from nuclear issues despite his very high popularity and record-breaking long tenure. This is why many observers were genuinely surprised when Prime Minister Kishida released his instructions.
    What is rather significant is that the public reaction has been relatively receptive. According to Nikkei Newspaper which conducted a public opinion poll in mid-September, 53% responded in favor of restarting nuclear reactors against 38% expressing an opposition. A similar poll a year ago produced results of 44% in favor against 46% opposed. The public sentiment for restarting nuclear reactors has shifted significantly in one year.
    Even more surprising was the response to the question of constructing new nuclear units. In spite of the conventional wisdom that the public is strongly opposed to new construction of nuclear reactors, 53% responded in favor against 38% opposed. Looking at the numbers based on age groups, 71 % of the people between 18 and 39 years old are in favor compared to 47% for those above 60 years old. These numbers also suggest the shift and the future direction of the public opinion surrounding nuclear power.
     In spite of these developments, it would be too early to celebrate and welcome the return of nuclear to Japan. At this point, instructions have only initiated the studies.
     The restart of nuclear plants requires the consent from the local communities as a last step and, therefore, nation-wide poll numbers are not sufficient. The construction of new nuclear reactors would need locations to host them, which also require the consent from the local communities. The legislative action required for the extension of the operating life of nuclear reactors beyond 60 years would certainly face opposition in the Diet.
    Nevertheless, it is clear that the tide is changing and it should be worthwhile to closely monitor the policy discussions in Japan as well as the decisions that will be made by the end of this year. They would have a great impact on the Japanese energy policy, on the global energy markets and the future of nuclear power in the world.