Trade figures reveal cost of Japan's nuclear shutdown

Wednesday, 25 January 2012

Huge energy imports last year caused Japan to record a rare trade deficit. Manufacturing was hit by the tsunami, but the use of fossil fuels to replace shut-down nuclear plants was a bigger factor.

Prior to the March 2011 earthquake and tsunami and subsequent major accident at Fukushima Daiichi, nuclear power had provided about 30% of Japan's electricity. But with nuclear reactors shutting down one by one over nine months of 2011, the current situation sees only 4 of 50 reactors in operation as government and regulators struggle to reassure the public that operation can safely recommence.

Japan has had to severely reduce its use of electricity with a big impact on domestic and industrial routines, while the utilities have switched to alternative fuels for power generation. The result has been a jump of 25.2% in fossil fuel imports, which last year made up almost one third of Japan's total overseas spending. Oil, gas and coal were all in demand from foreign markets.

In total during 2011 Japan spent ¥21.7 trillion ($277 billion) on fossil fuel imports, up from ¥17.4 trillion ($222 billion) the year before. This increase of ¥4.3 trillion ($55 billion) is clearly a major factor in the country's overall trade deficit of ¥2.5 trillion ($32 billion), the first posted by Japan since 1980.

Among power generation fuels it was liquified natural gas that saw the big increase to imports. Japan sourced 59% more LNG from the Middle East for a total of ¥1.2 trillion ($15 billion), while LNG from the ASEAN group of nations grew 20% to a value of ¥1.9 trillion ($24 billion). Russia sold 62% more LNG to Japan for a value of ¥375 billion ($4.7 billion), and the USA sent 143% more coal for ¥128 billion ($1.6 billion). Some 39% more oil was imported last year for a total value of ¥2.2 trillion ($28 billion), some of this for power generation.

Manufacturing performance was dented by the earthquake and tsunami, particularly in cars and car parts as well as the computing, semiconductor and audio-visual sectors.

A negative trade balance for Japan as a nation bore out these effects for March, April and May, before recovery in August and September. Trade deficit returned in the colder months of November and December.

The figures may help Japanese leaders make a strong case for restarting operable nuclear power plants, should these be acknowledged by regulators as having passed the two-stage program of stress tests. The government has invited the International Atomic Energy Agency to discuss and comment on the stress test program.

Japan is currently in the process of developing a new energy policy, which will see energy efficiency and renewable technologies prioritised alongside stalwart nuclear and fossil fuels. Leaders have been frank in dismissing any hopes of meeting climate change targets.

Researched and written
by World Nuclear News