May 7, 2012 / 11:31 AM / 6 years ago

Japan summer power prospects look brighter - panel

TOKYO, May 7 (Reuters) - Summer power supply in nuclear-free Japan may be better than utilities’ forecasts, a government-backed panel said on Monday.

However, the Kansai region - including the country’s second-biggest metropolitan area of Osaka - will still see a significant shortage.

The findings are based on all of Japan’s nuclear reactors remaining offline.

Utilities are struggling to secure stable power supplies as all 50 reactors are offline for the first time in 42 years in the wake of public safety concerns following last year’s Fukushima nuclear crisis in the wake of a huge earthquake and tsunami.

Japan could have a power surplus of 0.1 percent in August, a preliminary calculation by the panel showed, compared with a 0.4 percent shortage estimated by the utilities.

The panel’s calculation took into account the possible effect of deals whereby utilities offer big businesses cheaper electricity in exchange for power usage restrictions when there are immediate shortage risks.

It also included the impact from electricity conservation efforts and a slight, expected increase in power supply.

Kansai Electric, the utility most reliant on nuclear energy in Japan, may have a power shortage of 14.9 percent in August according to the panel. The company had forecast a 16.3 percent deficit.

Forecasts were based on temperatures similar to those in the record hot summer of 2010.

The panel of nine was formed by the government in April to review the utilities’ power forecasts for the summer, when demand peaks due to the nation’s air conditioners being switched on to combat the hot weather.

Prior to the Fukushima crisis, nuclear power accounted for about 30 percent of Japan’s electricity demand. To cope with the loss, utilities have restarted fossil fuel plants but face huge fuel costs, while the aged facilities also risk breakdowns.

In the business year to March 2013, utilities are expected to face an additional 3.1 trillion yen ($38.8 billion) in fuel fees even if liquefied natural gas (LNG), oil and coal costs remain at the current level, a document from the panel showed.

Industry Minister Yukio Edano has said that while he wants to avoid issuing mandatory power use restrictions, possibilities of usage limits or rolling blackouts remain.

With power shortage risks looming, some experts argue that manufacturers could leave the country to seek other production bases, which would be a blow to Japan’s $5 trillion economy.

“We need to debate the tough situation under burden of heavy (fuel) costs ... This could take away our economic power in the future,” said Keigo Akimoto, a panel member.

The government is trying to restart two reactors at Kansai Electric’s Ohi nuclear plant, but is being opposed by the public and local authorities.

The panel will finalise the summer power forecast and make recommendations on power conservation measures as early as Thursday, a government official said.

$1 = 79.8800 Japanese yen Reporting by Yoko Kubota; Editing by David Hulmes

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