Japan: Kishida Pushes LDP to Further Back Nuclear

Copyright © 2021 Energy Intelligence Group

As they campaign for the upcoming general election Japanese Prime Minister Fumio Kishida and his allies are pushing the ruling Liberal Democratic Party (LDP) into a fuller embrace of nuclear power, from life extensions to reactor restarts, and with newfound openness to newbuilds and small modular reactors (SMRs).

In his first three weeks in office, Kishida has already changed the tone from the previous administration. Under former Prime Minister Yoshihide Suga, senior LDP figures such as Taro Kono and Shinjiro Koizumi promoted the prioritization of renewables in meeting Suga's ambition climate goals. This involved de-emphasizing nuclear, notably by excluding any mandate for newbuilds or replacements from the draft sixth basic energy plan.

Kishida's cabinet ratified that plan Oct. 22 without major changes, but the more pro-nuclear views espoused by Kishida, new LDP Secretary-General Akira Amari and LDP Policy Research Council head Sanae Takaichi are ascendent in Kishida's LDP. The extent to which these views are translated into government policies may depend on the Oct. 31 election for the Diet's House of Representatives. In the current government the conservative LDP holds an outright majority of 276 seats in the 465 seat assembly, and together with 29 seats held by coalition partner Komeito it wields a near two-thirds majority of 305 seats.

While the coalition is expected to lose some seats in the election, few expect it to lose control, even if the LDP itself should lose its own majority. Either way Kishida is likely hoping to receive an electoral mandate for his own favored policies, and leading LDP politicians are signaling a key role for nuclear power.

Restarts, Newbuilds and SMRs

After repeatedly avoiding responding to the question of whether he backed reactor newbuilds or replacements, Kishida opened the door to that possibility in an Oct. 18 debate with the other eight party leaders organized by the Japan Press Club. Kishida stated that the first task is to restart existing nuclear power plants, followed by dealing with the problem of extending operational lifetimes from 40 to 60 years. "There is some discussion that after using an old nuclear power plant, it must be replaced,” the new prime minister stated, adding that "I would like to decide on this policy after a thorough discussion," the Mainichi Shimbun reported Oct. 19.

Meanwhile LDP Secretary-General Akira Amari, a well-known nuclear power advocate closely associated with former Prime Minister Shinzo Abe, said in an Oct. 17 televised debate that the LDP's 46% target for fiscal 2030 was now predicated on the restart of 30 nuclear reactors, Bloomberg reported.

And for the first time the LDP's official election platform, issued by Takaichi Oct. 12, called for both the "restart of nuclear power plants confirmed to be safe" and for active investment in "clean energy" such as SMRs "in underground locations." Advancing research and development into fast reactors, fusion and high-temperature gas reactors, including collaborations between Japanese companies in overseas demonstration projects with the US, UK, France and Canada, are mandated in the just-ratified sixth energy plan.

This inclusion of actual SMR installation in the main text of the LDP platform is unprecedented. In the October 2017 general election campaign the promotion of research into SMRs, fusion and other advanced nuclear technologies had been relegated to the LDP's detailed "Policy Bank" of ideas.

In the current campaign, that's where some of Suga's policies have been shelved. The LDP manifesto retains Suga's goals of a 46% reduction in greenhouse gas emissions from 2013 levels by fiscal 2030, net carbon neutrality by 2050, and the establishment of a 2 trillion yen fund for Japan's energy transition (and that fund now will go toward measures to improve efficiency and clean energy, including investments in SMRs and fusion). But the requirement in the sixth energy plan for prioritizing the growth of renewables into Japan's "main power source" has now been relegated to the Policy Bank, along with proposals to expand offshore wind installed capacity to 30-40 gigawatts by 2040, and to promote decarbonization of thermal power through higher efficiency, co-firing of hydrogen and ammonia and carbon capture, utilization and storage.

Other Policies, Other Levers

It's no shock that opposition parties going into next week's election have a dramatically different vision. The left-liberal Constitutional Democratic Party, which currently boasts 113 seats in the Diet's House of Representatives, advocates a 55% reduction in CO2 emissions by 2030 based on a 50% share for renewables. The platform issued by party leader Yukio Edano urges citizens to "vote for change" and offers seven core changes, including achieving carbon neutrality by 2050 "without depending on nuclear power."

Although overshadowed by Covid-19 pandemic control, economic recovery and regional security and diplomacy, energy is a major issue in the campaign. But it's also an issue on which the national government has limited powers. In the area of nuclear restarts in particular, even in the unlikely scenario that the LDP secured a strong majority in the Oct. 31 election it's not clear what it can do to really change things on the ground.

Unlike the era preceding the 2011 Fukushima disaster, Japan's nuclear regulator is now functionally independent from government policymakers and bureaucrats. Despite the calls for expedited Nuclear Regulation Authority (NRA) decisions from industry leaders and LDP politicians, including Abe and Amari, there is little that a pro-nuclear administration can directly do to nudge the regulator.

"I don't think the LDP would dare to challenge the independence of the NRA," one senior industry professional told Energy Intelligence. "Even if it tried, the government would face an avalanche of criticism domestically and from many countries as well as from the IAEA" — the International Atomic Energy Agency. "If the LDP wants the NRA to work faster on these reviews, it should boost its operation budget and expand its personnel," said Citizens' Nuclear Information Center Secretary-General Hajime Matsukubo.

But the pressure on local politicians to sign off on restarts or newbuilds could theoretically increase if domestic power prices soar on the back of a global shortage of LNG, which provided 35.4% of Japan's power needs in 2020. In an Oct. 4 editorial, the conservative Yomiuri Shimbun warned that competitive pressure from global LNG buyers such as China "is inevitable," and urged the government to both diversify procurement and, "strongly support the restart of nuclear power plants" to avoid power shortages while aiming for decarbonization.

In recent days spot power prices have moderated, after surging by Oct. 12 to over 50 yen (US$0.44) per kilowatt hour — more than double or triple normal rates. Dependence on imports means that there's always the possibility of similar surges: last winter prices soared to over 250 yen. But for the immediate future this appears unlikely. On Oct. 21 officials from the Ministry of Economy, Trade and Industry's Agency for Natural Resources and Energy reported that LNG stocks held by the major utilities reached approximately 2.3 million metric tons, about 70 million metric tons more than the same period in 2019 and ample to avoid severe tight supplies this winter.

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