A Year On, Japan’s Nuclear Power Dilemma Continues

Iwaishima, Yamaguchi Prefecture – Every Monday evening for the last 30 years, the elderly women on the island of Iwaishima have gathered at the harbor to protest a planned nuclear reactor across the bay. On the 1,122nd gathering on a blustery February night, some are too frail to complete the entire walk.

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“The Fukushima disasterconfirmed our worst fears,” said Toshiyasu Shimizu, a town councilor. “At the same time though, it convinced us that we are right.”

Iwaishima is nestled in the Seto Inland Sea - a national park dotted with 3,000 islands. Chugoku Electric Power has been planning to build a nuclear plant in Kaminoseki less than four kilometers away, but all construction was halted in March 2011 after the quake and tsunami created the worst nuclear crisis since Chernobyl.

All but two of the 54 nuclear reactors in Japan are now offline and public mistrust after the Fukushima disaster has prevented the Japanese government from restarting them. By the end of April, all of the plants will go offline for safety checks.

“If they can’t even decide on the conditions to restart the existing reactors, any plans for building something new just isn’t going to happen,” said Andrew Dewitt, a professor at Rikkyo University.

It would be a blow to the town of Kaminoseki, which has received 4.5 billion yen ($55.3 million)in nuclear-related funding. In recent years, it has paid for a brand new spa, museum and school. For each reactor that begins construction, the town will receive 8.6 billion yen more.

Naonori Shimizu, who owns a clothing store in Kaminoseki, says he has been counting on the reactor to bring in a wave of people and money into his hometown. He says concerns about the town’s economic future outweigh safety concerns.

“For a town like ours that has no source of revenue, nuclear-related funding is extremely attractive,” he said.

Growing Momentum for Renewables

The face-off between the two islands exemplifies the soul-searching in Japan over the last year and whether Japan’s energy policy will shift dramatically away from nuclear power. Renewable energy accounts for just 1 percent of Japan’s electricity, but some analysts say there is growing momentum towards greener energy after Japan passed a new feed-in-tariff law last August. Under the law, the power sector will have to start buying electricity from a wider range of renewable sources from next month.

"Contrary to arguments that Japan is being hollowed out by the inability to restart the reactors, you actually see a massive inflow of new, innovative actors in this political economy,” Dewitt said. “If one believes we're in the middle of an energy industrial revolution, this a good sign."

Mitsubishi Heavy already dominates 25 percent of the global market for geothermal energy and announced plans in January to more than double revenue from the segment to 18 billion yen. It is also the biggest player in Japan for wind turbines, while Toshiba is also the world’s leading producer of geothermal plants.

In terms of revenue, Sharp and Kyocera are the world’s second and fourth largest solar energy companies, respectively according to the European Photovoltaic Industry Association.

Until now, these companies have sought business opportunities overseas. Although the lead time is long to develop many of these projects – five to 10 years in the case of geothermal -- a change in government policy could be an opportunity for the economy to recover at a time when the strong yen has renewed concerns about a hollowing out of its industrial base, analysts said.

"You would see growth in the economy and jobs created. You would see the yen weaken and you would see the whole export industry in Japan really come alive again,” said Glen Wood, Partner at research Ji Asia.

Others, however, say rising fuel costs will prevent Japan from turning away from nuclear energy. Due to the idled reactors, Japan’s energy-related imports surged last year, leading to the nation’s first trade deficit in 31 years in 2011.

For now, the only noticeable activity at the planned Kaminoseki site is a security guard that sounds the alarm when fishing boats, usually from Iwaishima, trespass into the bay. A permit that gives the utility company exclusive rights to the shore expire at the end of the month.