Electricity Shortage Throughout Japan – Effects and Solutions

Osaka - Saturday, June 11, 2011




Nikkei, Japan’s leading newspaper specialized in economy and business, reported on June 10 that not only TEPCO but also Kansai Electric Power Co., Inc. (KEPCO) in western Japan, also is to request 15% electricity cut in summer. This is because they cannot plan to re-start operation of nuclear plant currently going through regular inspection and maintenance and they are to make the request before the electricity supply shortage becomes a reality.



Other electricity companies such as those in Kyushu (in southern Japan) are also studying to make a same request, and thus electricity supply shortage issue is now not limited to eastern Japan.



1. How is electricity supply plan in eastern Japan directly impacted by Fukushima nuclear plant accident?



Due to the accident, Fukushima nuclear plant operation is terminated and therefore electricity shortage is a critical issue in eastern Japan. This is why there had been “planned” blackouts even in Kanto (e.g. Tokyo, Yokohama, Chiba) in March.



For this reason, electricity power companies in eastern Japan, i.e. Tokyo/Tohoku Electric Power Co., Inc. (TEPCO) is to execute limiting electricity supply based on Electricity Business Act by Ministry of Economy, Trade and Industry (METI). Under this law, companies and organizations that consume large amount of electricity (with contract of over 500 kW) are obliged to cut electricity use from July by 15% from the peak last summer. If this is not achieved, companies and organizations are to get penalty of less than 1 million yen.



The 15% electricity cut request will not have a legal power over organizations with contract of less than 500kW and individual householders; however, they also would be encouraged to cut electricity use by 15% and will be rewarded when achieved.



2. What is KEPCO’s request and why was it made?





The same request i.e. 15% electricity cut from July is to be made by KEPCO to organizations in its responsible area (e.g. Osaka, Kyoto, Hyogo, Mie, Gifu, Fukui) but this would not have a legal obligation.



KEPCO decided to make the request because from July, three out of eleven nuclear plants in KEPCO area will be going through regular inspection and maintenance, which means together with the nuclear plants that are already going through regular inspection and maintenance, six out of eleven nuclear plants will not be in operation. This is because of lack of understanding and approval to restart the operation of the nuclear plants after the inspection and maintenance. Consequently, it is estimated that electricity supply will become short by some 5% at the peak in summer.



3. How are electricity power companies in other area?



Electricity power companies in Kyushu (southern Japan), Hokuriku (Japan Sea Cost area) and Shikoku (Shikoku Island in western Japan) may also follow KEPCO for the very same reason.



The only are that is not impacted is Okinawa because there is no nuclear plant in Okinawa.



4. How would this impact business community?



It is quite certain that this would have increase negative impact on production and business strategy of business community because many of them have been transferring part of their production from eastern to western Japan due to the current electricity shortage in eastern Japan.



For example, Toshiba has already decided and is transferring the production of system LSI and micro computer from Iwate to Kyushu. The company also has already planned to shift data centre operation from eastern to western Japan.



5. What are the author’s final thoughts?



KEPCO’s request is rationale because it is necessary for them to take action before it is too late. However, what really needs to be discussed and solved are the new energy policy of the country and the roadmap and plant for smooth transition to the new policy.



The new energy policy discussion would include topics such as positioning of nuclear power and possibilities of alternate energy. This is of a mid to long-term, political issue, to be initiated by the government.



The transition discussion would include topics such as termination/restart of nuclear power plants after regular inspection and maintenance together with pros and cons, possibilities of electricity generation by other means, and efficient use of electricity. This is mostly of short-tem issues, to be initiated by the government.



And, in execution, concise message needs to be developed and communicated with transparency by the government and electricity companies to all stakeholders to convince them and win their understanding and support. This means strong leadership is required.





Resources:-

Electricity shortage is spreading to not only eastern Japan but nationwide. This is because nuclear power plant operation cannot be restarted after regular inspection and maintenance due to lack of understanding and consensus from the local community. This is to impact business community when many companies have been transferring their production and other functions from eastern to western Japan. Japan needs strong leadership to develop and execute new energy policy with smooth transition.