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Japan is laying the groundwork to proceed with next-generation nuclear energy plants once its fleet of idled reactors have been restarted, as soaring gas prices and power-hungry data centres have prompted an rethink on atomic power in the earthquake-prone nation.
Asia’s second-largest economy signalled late last year that it would allow construction of new atomic reactors at existing sites, marking a significant policy shift in the country’s aversion to the controversial electricity source following the Fukushima nuclear disaster in 2011. Japan is reactivating nuclear reactors that were shut down in the wake of the accident, reopening 14 out of 54 that were closed to date.
Company executives and experts say that the reactivation phase is expected to last until at least 2030, at which time the nation can start to sharpen its focus on plans to build new reactors to meet its energy needs and decarbonisation targets.
Kazuto Suzuki, professor of science and technology policy at the University of Tokyo, says that he expects nuclear restarts to be largely complete within five years, by which time newer technologies such as small modular reactors (SMRs) will have matured and become cheaper.
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“There’s a general consensus that at the end of the day, we need to depend on nuclear. Putting a bet on SMRs may be something that is necessary,” he says. “There’s very strong momentum on the policy side but as for the social side, there is little awareness of what’s going on with SMRs.”
The Fukushima accident prompted a pullback from atomic power in Japan, with the power source falling from 30 per cent of the energy mix to almost nothing, as well as reshaping support globally for the technology.
In February, 14 years on from the accident, Japan revised its stance towards nuclear in its energy plan to 2040, which removed the policy to “minimise” the use of nuclear and instead pledged to “maximise the use of decarbonised power sources such as renewables and nuclear”. Nuclear restarts have lifted it to 8.5 per cent of Japan’s electricity generation.
The new plan aims for Japan to source 20 per cent of its power supply from nuclear energy in 2040, helping to cut fossil fuels from almost 70 per cent of electricity generation in 2023 to 30 or 40 per cent.
A significant reason for the policy shift has been soaring gas prices triggered by Russia’s invasion of Ukraine, which hit hard in Japan — the second biggest importer of the fossil fuel.
That was followed by a revision in understanding of the power consumption of AI data centres, which is expected to double or triple by 2030. For Japan, that has upended expectations for falling electricity demand in a rapidly depopulating nation.
Japan has laid out a road map of five types of next-generation nuclear reactors, which are expected to be safer than the boiling water reactors used in the Fukushima Daiichi plant. The closest to reality are high-temperature gas-cooled reactors, which the government believes could start operating sometime in the 2030s. That would be soon followed by advanced light water reactors, then by smaller modular reactors, fast neutron reactors and eventually nuclear fusion.
However, local community opposition to nuclear is a major obstacle in places such as Kashiwazaki-Kariwa, home to the world’s biggest nuclear power plant, the restart of which is being held up by the local governor.
The Japan Federation of Bar Associations, which has been active on the issue, is critical of the new policy, arguing decarbonisation must come from renewable energy sources. “The government is trying to shift to a policy of actively utilising nuclear power without fully paying attention to the ongoing damage from the Fukushima nuclear accidents or the dangers of nuclear power generation,” it said.
Hiroki Sato, chief executive of global business at Chubu Electric, a Japanese utility that has invested in NuScale, the leading small modular reactor developer in the US, says that introducing new reactor technology to Japan may be “very challenging” given its slow-moving and cautious regulator.
“All people are suspicious of new technology, especially in Japan,” he says. “It is important to show them that this is a reality” by first building projects in the US and other nations before bringing downsized reactors to Japan, he adds. Sato believes SMRs will not come to Japan before 2040, despite the nation and big tech companies’ need for clean baseload power from nuclear and geothermal sources.
Given the expected long wait for SMRs in Japan, the government and industry view it as vital to fund projects overseas to maintain supply chain expertise to compete against Russia and China, whose designs have been used for more than 90 per cent of nuclear projects that have started construction since 2017.
Ramsey Hamady, chief financial officer of NuScale, says Japan is “a very important commercial partner from the sense of supply chain production”. He adds that “Japan recognises SMRs potential” but is yet to have as supportive a policy environment for the technology as South Korea, which has a dedicated programme in place to develop SMRs.
One of the Japanese companies supporting NuScale as an investor and supplier of key equipment is IHI.
Yasuyuki Hasegawa, running the heavy industrial group’s nuclear business, says: “I think we can deliver this technology to Japan too but the biggest issue is when that time will be.”
GE Vernova Hitachi, a US-Japanese joint venture, has won approval to build an SMR in Ontario, Canada, that it aims to bring online in 2030.
Other Japanese companies are also backing NuScale, hoping that a blueprint for success overseas will pave the way for nuclear revival in Japan and convince consumers and regulators to embrace safer technologies.
Andreas Schierenbeck, chief executive of Hitachi Energy, expects SMRs to be the winning technology in the long run because “you can build it faster and cheaper” and accidents like Fukushima are less likely to occur.
