(Reuters) - Japanese utilities are now operating 17 out of 54 nuclear reactors that had been available before the March 11 earthquake and tsunami and all of those could be shut down by next May if public safety concerns continue to stall reactor restarts.
Japan has relied on nuclear power for nearly 30 percent of its electricity needs before the disaster. That figure has fallen to 18 percent in June and economists are already trying to predict the effects of a complete nuclear shut-down.
The following are some estimates of an economic impact if all of Japan’s reactors went offline.
Power generation costs would rise by over 3 trillion yen ($38 billion) per year if Japan replaced nuclear energy with thermal power generation. Higher electricity costs would lift production costs by 7.6 trillion yen per year. The ministry did not provide estimates of how such an increase in costs would affect economic output.
Shutting down nuclear power permanently would reduce economic output by 2.5 percent per year -- equivalent of over 14 trillion yen -- over the next decade.
“Higher electricity costs would increase costs for corporations and individuals and weigh on both capital spending and consumption,” said Daiwa’s Mikio Mizobata, senior researcher.
- Fossil fuel imports would increase by about 3.3 trillion yen in the first year after all the nuclear power reactors are shut down, which would shave 0.4-0.5 percent of Japan’s gross domestic product. But the loss of output would not be deep enough to stall economic recovery, given Nomura’s forecast that real GDP will rise 3.5 percent rise in the next fiscal year to March 2013. The loss of output related to the nuclear freeze would still leave the economy growing by a healthy 3.0 percent, Nomura forecasts. Chief economist Takahide Kiuchi says the forecast is based on the assumption that Japan’s earlier push toward nuclear power left it with substantial spare capacity in thermal generation, which now could be tapped to make up for the loss of nuclear power.
An average of 6.4 percent of power shortage is expected during the power consumption peak in August 2012, so about 16 percent energy saving will probably be needed.
Factory output would probably fall 2.4 percent on month-on-month in July 2012 and 1.2 percent in August. Nikko said, however, production could be brought forward, limiting the overall loss of output to 0.2 percent over the entire year.
Reporting by Kaori Kaneko; Editing by Tomasz Janowski