Nuclear energy is an ideal energy source for Japan. This may not be the case for Poland, which unlike Japan is not a geographic, regulatory and market island – writes Wojciech Jakóbik, editor in chief of BiznesAlert.pl.
During our journalist trip to Japan we had the pleasure to attend lectures by representatives of the government in Tokyo on the country’s energy policy. This allowed us to better understand why the Japanese decided to restart their nuclear power plants despite the disaster at Fukushima. Tokyo puts emphasis on energy security and independence from imports. Nuclear energy is an ideal tool to achieve this goal. However, Poland shows it is not the only one.
The disaster at the Fukushima nuclear power plant, which occurred on 11 March 2011, caused the shutdown of nuclear energy in Japan and an increase in fuel imports: LNG, coal and oil. This is why today Japan is famous for its high energy prices, which are higher than in Germany or the US. In 2012 (after the disaster) they were at USD 300 per MWh for households and USD 200 for industry. After 2014 the prices for households increased by 25% and for industry by 28% in comparison to 2010. Later they dropped, but in 2016 they were still higher by 10 and 14% respectively. This was caused by the fuel imports, which increased in 2014 by 64% in comparison to 2010.
Japan’s energy sector plan (in Poland it would be definitely called a ‘strategy’, but the Japanese actually treat it seriously), says that the demand for electricity will drop from 966,6 bn kWh in 2013 to 980,8 bn kWh in 2030, i.e. by 17%. This will take place thanks to savings and renewable energy sources. At the same time the participation of nuclear energy is to increase from 20 to 22%. Whereas, renewables will grow from 22 to 24%. The other sources are LNG (27%), coal (26%) and oil (3%), and their share will not change.
Japan understands changes, but there will be no revolution
Significant price changes on the hydrocarbon market and development of energy storage forced Japan to revise its strategy. South Korea announced it would do away with domestic nuclear energy and Tokyo took this into consideration. The climate agreement is another factor. All these could make the Japanese put more trust into imported raw materials. However, according to my interlocutors from Japan’s Ministry of Economy, Trade and Industry (METI), because Japan does not have any energy sources and wants to be as independent as possible, it will most probably stand by the atom. This is a matter of energy security.
This is also related to the goal to increase energy independence. METI adopted the rule of three “E’s”: energy security, economic efficiency, environment. The security is to increase from 20 to 25% in comparison to the situation before the catastrophe. This should decrease energy prices. Additionally, increasing usage of nuclear power plants will limit CO2 emissions. Japan’s nuclear policy’s priorities include security, emissions reduction and environmental protection.
However, the Japanese have it easier when it comes to investing in nuclear energy. To repeat the same result in Poland, our country – similarly to Japan – would have to become a geographic, regulatory and market island. The Polish power market depends on spot prices on the European market, which creates a dilemma between the fight for cheap supply and diversification. Japan chose the struggle for self-sufficiency because it is not dependant on prices on other markets with which it would have to fight. My interlocutors from METI admitted that. They also confirmed that limited compromise when it comes to cheap hydrocarbons was possible for private companies, which may want to deliver gas or oil and construct power stations fuelled by them, but the government’s goal would not change. Importantly, contrary to Europe electricity produced in nuclear power plants in Japan is cheaper than from other sources because of high import costs of oil, gas and gasoline. If it was more expensive, it would not be competitive.
At the same time, in Europe cheap hydrocarbons are becoming more popular and their import is not limited by sea barriers. Great Britain is a great example of this thanks to the policy of constructing interconnections supported by the European Commission. So far, the Japanese have not built a gas pipeline to Asia and Gazprom’s stories about the Sakhalin–Hokkaido pipe are just that – stories. This is mostly because of the danger posed to such infrastructure by the tectonic fault between Asia and the Japanese islands. Additionally, the Japanese do not have the merit order mechanism, which introduces into the market the cheapest kind of energy. This means renewable energy sources do not undercut the profitability of nuclear power plants. Japan is not a member of the European Union and implements an energy policy in line with its views and does not have to consult with anyone regarding climate policy. The only thing it needs to take into consideration in this regard is the general target set by the UN climate accords. The country also wants to decrease CO2 emissions by 26% by 2030 in comparison to 2013. This is not an over-the-top target.
Japan drafted estimates of electricity costs by 2050, which show that nuclear energy will remain cheapest because of the necessity to import raw materials. Also because Japan is located on islands it does not import electricity from abroad, which impacts prices as well.
Naimski’s Polish island
The METI representatives pointed out that Poland had a lot of coal, so nuclear energy may be less competitive. Poles could create their own energy island, which would enjoy energy independence thanks to coal, but it would have to cut ties with Europe. If Poland was not dependant on the EU’s internal gas market, nuclear energy would be a more competitive source. If the country did not have to follow EU regulations, it would be easier to defend the high-emission coal. However, Poland is not an island. The primacy of energy independence pursued by Japan’s energy policy, in Poland may lead to us striving for creating a Polish island when it comes to infrastructure and regulations.
This reveals the government’s logic, which avoids the construction of new power links like LitPol Link 2 and seeks exemptions and concessions when it comes to the European Union’s energy and climate policy. Japan’s energy independence is the same value as ‘energy sovereignty’, which Piotr Naimski, PhD and current Government Plenipotentiary for Strategic Energy Infrastructure put forward in his scientific articles. The so-called ‘Naimski school’ argues that the creation of a Polish island on Europe’s map is possible and desirable. However, is this actually true? Japan can afford an ambitious energy policy thanks to a strong and innovative economy. Can Poland?