Sunday, March 27, 2011

Power shifts after Fukushima

Japan heavily relies on nuclear energy more than most of the others. One reason is its historical discussion on independence. Soon after losing WWII, its leaders thought that no independence can be made if it has no army and depends heavily on the outside energy resources. The discussion paved the way for the birth of "Self-defense" force and nuclear plants industry. Now the industry is feeling pinch.

Now more believe that nuclear energy is dangerous, accounts for small portion of world's electricity and expensive. Before Fukushima in 2011, you remember what happened at Three Mile Island in 1979 and at Chernobyl in 1986. Now that three have done so again, unti-nuclear movements would get momentum. In 2005 only quarter of Japanese felt nuclear plants are safe, and in 2010 more than 40% did, but no longer. To add to that, even now nuclear plants with average age of 27 account for only 14% of world's electricity. The construction is far expensive than the others.

So why do we keep to use nuclear plants? One reason is environment. There is a trade-off between reduction of nuclear plants and increase in carbon dioxide. If we go without nuclear energy, in the first year we would see the carbon dioxide increase which equals to what Germany and Japan emit a year. Although EU asked its members to conduct "stress-tests" on their reactors and the Japan case provoked arguments on nuclear energy in EU countries, the rapid shift in power is less likely to happen. France may see the disaster in Japan as an opportunity. It has AREVA, the world largest nuclear plant maker which covers most of the value chain of nuclear energy industry. You can see world's nuclear usage trend here:

With that said, the world may turned into less nuclear one. In the new world, gas and renewable energy would be the new leaders. As with others, you need to think of energy portfolio given risks and return, i.e. the trade-offs between economics and potential damage on the environment and human beings. To judge and take the risk is what's Japanese can do better in many fields.

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