Kishida turns Japan’s energy problems into nuclear opportunity

In a 27-page document that accompanied Wednesday’s announcement of Japan’s biggest U-turn in nuclear policy in 11 years, the word “crisis” was used seven times.

The single word encapsulates why prime minister Fumio Kishida has risked political capital to end a paralysis that has hung over the country’s energy sector since the Fukushima Daiichi nuclear disaster in 2011.

First, there is the global energy crisis and soaring commodity prices sparked by Russia’s invasion of Ukraine, which have dealt a heavy blow to a resource-poor country that imports most of its energy. Then there were the blackout scares in Tokyo this year, which along with rising electricity bills have softened public opposition to restarting nuclear reactors. Nuclear energy generated one-third of the country’s electricity before Fukushima, but now only six of the 33 operable reactors are online.

Finally, there was also the sense of frustration, particularly among business leaders, that any pledges to achieve net zero carbon emissions by 2050 were hopeless if the country continued to burn additional coal, natural gas and fuel oil to make up for the lost nuclear power.

“It was the perfect storm,” said George Borovas, head of the nuclear practice at Hunton Andrews Kurth in Tokyo. “Sometimes in politics the best gift you can have is good timing. Kishida is having that good moment in timing to implement something that has to happen.” 

The prime minister had already dropped several hints throughout the year that the government would push ahead with nuclear restarts. But his sudden announcement to consider the construction of more nuclear plants — after repeatedly shrugging off the possibility — came as a surprise.

The big political gamble also comes at a critical moment for the Kishida administration. The prime minister’s approval rating, which had remained steady since he took office last October, has fallen sharply in recent weeks after questionable ties between the ruling Liberal Democratic party members and the Unification Church were revealed following the assassination of former prime minister Shinzo Abe.

Energy security was not the only vulnerability that was exposed by the war in Ukraine. Russia’s invasion made Japan realise how unprepared it would be if an increasingly aggressive China made a similar move on Taiwan. Kishida will therefore need to juggle the challenge of rebuilding Japan’s stalled energy programme while revamping its national security strategy for the first time in almost a decade.

Analysts say a failure in either of those two pieces of government policy would have a catastrophic impact on both the Kishida administration and the country’s future. The challenge on both fronts is not small. There is still opposition and deep mistrust within local communities regarding nuclear restarts. In defence, how much Japan can actually increase military spending — and how wisely it would put that money to use — is still up for debate.

Whatever the risks are in reviving nuclear power, the business community believes them to be worth taking to enhance Japan’s industrial competitiveness. The high costs of running domestic factories have long put the nation’s manufacturers at a disadvantage against its German rivals. The Japanese nuclear industry, meanwhile, has lost valuable knowhow and engineers in the decade after Fukushima.

Crucially, the tide has turned globally with a broader rethink in nuclear strategy happening across Europe and the US.

Hiroyuki Tezuka, fellow at the International Environment and Economy Institute, says that Kishida could even make the nuclear restart into a foreign policy issue. According to Tezuka’s estimates, if Japan restarted 27 nuclear reactors, the amount of natural gas it would not need to buy would amount to about 14 per cent of the 155bn cubic metres of the gas Europe imported from Russia in 2021. That would also free up some natural resources for developing countries in Asia.

A successful nuclear reboot could thus win Japan international credit and also demonstrate that Tokyo can act decisively when it faces a policy crisis. Failure to follow through, however, would damage not only Kishida’s credibility but that of his nation. This is a gamble the prime minister can hardly afford to lose.