Economic recovery urges nuke plants resumption in Japan

Japanese utility firms ceased all nuclear power plants in June this year due to the anti-nuclear movements following the severe accident in Fukushima. Then Kansai Electric Power company has only restarted two units.

Most power companies got over the high-demand season during summer without nuclear units. Electricity demand in the KEPCO's service area during the summer season was also less than the supply capacity except for restarted nuclear plants.

These results encouraged anti-nuclear movements, but the stable power supply without nuclear units have been supported by not only the effort of power saving but also by the continued economy decline.

Year-on-year growth of Japan's industrial production shows decrease in most of the months in this year except for during March and May when figures are compared to the turmoil period after the severe earthquake. It is natural that the power demand in this year is also decreasing.
If Japanese economy continues to shrink further, electricity demand will also decrease and nuclear plants are no longer needed.

However, December's Monthly Economic Report by the Cabinet Office changed the overall economy outlook to "unchanged". The report had told downward revisions in the past four months.
Although exports and capital investments are still in weak tendency, individual consumption seems to show sign of recovery.
Easing monetary policy in order to exit from deflation is also expected to stimulate the Japanese economy, therefore, the risk of further economic recession seems to be relatively decreasing.

Current recovering energy usage in Japan seems to be reacting to the situation. Crude oil processing volume posted increase on year in the recent two weeks after the previous slump, according to the Petroleum Association of Japan. Electricity supply in November rose for the first time in the past three months, according the to the Federation of Electric Power Companies.

On the other hand, KEPCO's daily maximum power demand exceeded the supply capacity excluding nuclear plants in couple of days in December. It means that the company failed supplying enough electricity without nuclear units.

The insufficient supply capacity was caused by unexpected higher power demand due to the chilly weather besides maintenance shutdown at thermal power units. The company cannot do enough maintenance at thermal power plants if it keeps ceasing nuclear units.

Two giant utility firms Tokyo Electric Power Company and KEPCO kept power supply reserve rate at above 10% until summer season, but recently these figures often decline to single digit. Especially, TEPCO doesn't have enough capacity. If economic recovery will boost electricity demand, supply shortage is likely to occur.

Since Japanese electricity demand does not seem to surge by two digits numbers continuously even in the economic recovery period, utility firms could be able to keep enough power supply without nuclear units in the near term.

However, the continual stable power supply would definitely require further economic decline, if Japan does not prepare enough alternative power supply source such as new gas-burning thermal power units.

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