Japan risks angering both sides with energy mix plan

TOKYO Fri Sep 7, 2012 4:41am EDT

Anti-nuclear demonstrators gather outside Japanese Prime Minister Yoshihiko Noda's official residence in Tokyo August 10, 2012. REUTERS/Yuriko Nakao

Anti-nuclear demonstrators gather outside Japanese Prime Minister Yoshihiko Noda's official residence in Tokyo August 10, 2012.

Credit: Reuters/Yuriko Nakao

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TOKYO (Reuters) - Efforts by Japan's government to craft an energy mix that will respond to growing anti-nuclear sentiment among voters after the Fukushima crisis without alienating powerful pro-atomic energy interests look in danger of satisfying neither side.

The government is expected to announce as early as Monday an energy portfolio plan to replace a 2010 program that had called for boosting nuclear power's share of electricity supply to more than half from nearly 30 percent before the crisis.

That was abandoned after last year's disaster, the worst atomic accident in 25 years, in which an earthquake and tsunami triggered meltdowns and crippled the Fukushima power plant.

Kyodo news agency, citing a draft report, said on Friday that the government would seek to cut Japan's reliance on nuclear power to 15 percent by 2030 by limiting the operation of existing reactors to 40 years and allowing no new construction.

But the draft gave no timetable for giving up nuclear power completely, suggesting discussions were continuing, Kyodo said.

Energy policy has become a political football ahead of a general election widely expected within months that Prime Minister Yoshihiko Noda's Democratic Party is likely to lose.

"The timing is very bad for a practical debate. It is being conducted in the midst of political maneuvering," said Takeo Kikkawa, an economics professor at Hitotsubashi University.

Whatever the government decides, some analysts say the policy may well end up more of a campaign pledge than a program set in stone. The Democrats are likely to be thrown out of office or forced into a coalition with their arch-rival, the conservative Liberal Democratic Party (LDP).

"If the LDP gets in, all bets are off," said Jeffrey Kingston, director of Asian studies at Temple University's Japan campus, noting the party promoted nuclear power during its decades in power. "The election can be a game changer."

CONFLICTING ARGUMENTS

Support for the Democrats has sunk since they took power three years ago promising to pay more heed to the interests of consumers than companies and reduce bureaucrats' control over policy. Critics say these promises have gone unfulfilled.

Now the government is trapped between a growing grassroots anti-nuclear movement and warnings from industry that abandoning nuclear power will force up electricity prices and prompt companies to move production and jobs overseas.

Signs the government was leaning toward a target of exiting nuclear power by 2030 have galvanized the "nuclear village" nexus of utilities, bureaucrats and businesses into action.

"What is vital for future energy policy for our resource-poor country is to secure diverse energy resources, including nuclear power," the Federation of Electric Power Companies of Japan said in a statement on Thursday, blasting a Democratic Party proposal to exit nuclear power in the 2030s.

A decision to reduce nuclear power's share to 15 percent or less by 2030 would certainly upset Japan's business lobbies.

"If energy cannot be stably supplied at an economically efficient price, not only will the growth strategy be set back, the hollowing-out of industry and employment will be accelerated in the midst of intensified global competition," Japan's biggest business lobby, Keidanren, said in July.

All 50 nuclear reactors in Japan were shut for checks in the months after the Fukushima disaster, with only two brought back on line since to prevent possible summer power shortages.

The government estimated this week that abandoning nuclear power immediately would mean that importing fuel costs for power generation would rise by 3.1 trillion yen ($39 billion) a year.

A 15 percent solution would also fall far short of the demands of anti-nuclear campaigners. Noda's decision to restart the two reactors was a key factor in triggering demonstrations outside his office.

"Switching reactors back on and extending their lifespans for decades will create more unnecessary risk for Japan's population, its businesses, and the national economy," Hisayo Takada of environmental group Greenpeace Japan said on Friday.

($1 = 78.9700 Japanese yen)

(Additional reporting by James Topham and Risa Maeda; Editing by Ron Popeski)

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