UPDATED ANALYSIS: The Costs of Canceling Japan’s Plans for Nuclear Power

May 12, 2011 | Jesse Jenkins, Sara Mansur,

Updated 5/13/2011 to include construction costs for Japan's proposed 14 nuclear reactors.

On Tuesday, Japanese Prime Minister Naoto Kan announced that the country would scrap its plans to increase nuclear power's contribution to electricity generation to 50 percent by 2030, in response to the crisis at Fukushima's Daiichi nuclear complex. Replacing nuclear power's sizable role in Japan's energy system with a greater reliance on imported coal or liquefied natural gas (LNG) could increase Japan's CO2 emissions by up to 26 percent relative to current levels while damaging the nation's trade balance, while replacing nuclear with renewable energy sources such as wind, solar, and geothermal energy would require a roughly 50-fold increase in the electricity provided by these sources, as well as considerable replacement costs.

Japan's Nuclear Plans on Hold

Prior to the Fukushima Daiichi nuclear crisis, Japan had planned to increase nuclear power's share of national electricity generation to 50% from roughly 30% today. To achieve this increase, Japan had planned to construct fourteen new nuclear power reactors and raise the capacity factor of the country's existing nuclear power plants to 90%, an increase from roughly 72% in 2009 to a level equivalent to the capacity factors maintained by the U.S. nuclear industry. Existing nuclear plants would have their operating life extended wherever it was deemed safe to do so.

In the following scenarios, we consider the challenge of replacing nuclear power's role in Japan's energy system with fossil and renewable energy alternatives. We consider the new generation required to replace the electricity provided by the fourteen nuclear reactors planned by 2030, as well as assume that Japan does not grant license extensions to any existing plants during this period. By 2030, we therefore assume the retirement of thirty-eight existing Japanese reactors built before 1990, including the reactors at Fukushima Daiichi, totaling 28,431 MW or 61% of the nation's current nuclear capacity.

The total nuclear power generation 'lost' in this scenario totals 399 billion kilowatt-hours (kWh) in 2030. We have assumed that the country will still raise the capacity factor of the remaining twenty-one reactors still operating by 2030, providing 21,555 MW of capacity. Under this scenario, nuclear power would still provide almost 15% of Japan's projected electricity demand in 2030.

Replacing Nuclear with Coal or LNG
In this section, we project the impact on overall current carbon emissions, trade balance, and replacement costs if Japan were to replace the fourteen planned nuclear reactors and the existing reactors assumed to be retired by 2030 with coal (Scenario 1), LNG (Scenario 2), or a mix of both (Scenario 3).

If electricity generation from the fourteen planned nuclear power plants and the generation from the thirty-eight reactors built before 1990 were replaced entirely by natural gas-fired generation fueled by imported liquefied natural gas (LNG) (Scenario 2 below), the country's CO2 emissions would rise by 189 million tons, representing 15 percent of Japan's current CO2 emissions. If this nuclear generation were replaced by coal-fired power plants (Scenario 1), the country's CO2 emissions would rise by roughly 317 million tons, 26 percent of current emissions. Prior to the earthquake and nuclear crisis, Japan's government had pledged to reduce CO2 emissions to 25% below 1990 levels by 2020, a challenge that would be virtually impossible should coal or LNG play a greatly expanded role in the nation's electricity system.

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(For exact numbers, see Chart 1 at the end of this post)

The scenarios would also have a profound impact on the country's trade surplus, as the resource-poor nation would have to significantly increase imports of coal and LNG to power these new plants. The additional imports required under Scenario 1 would cost the country $17 billion in annual coal imports, representing 37 percent of Japan's current trade surplus. Alternatively, the LNG imports under Scenario 2 would cost $27 billion annually, representing 58 percent of Japan's current trade surplus.

The construction costs for the LNG and coal-fired capacity necessary to replace this lost generation would be significant. Construction costs for new LNG plants would cost roughly $60.5 billion. Estimated current and projected costs of coal-fired power plants vary widely, but the construction of the necessary 50 gigawatts (GW) of new coal-fired generation would cost roughly between $93 billion and $151 billion. As a point of comparison, constructing Japan's 14 planned nuclear reactors (18.59 GWe) would cost from $55 billion to $130 billion. There would likely be relatively minimal costs associated with increasing the capacity factor of existing plants. See notes at the end for detailed assumptions.

Replacing Nuclear with Renewable Energy

Replacing the generation lost from this reversal in nuclear plans with electricity from renewable energy sources would require a nearly 49-fold increase in the electricity provided by wind, solar, and geothermal to the national energy system.
These renewable energy sources would need to provide 399 billion kWh (35 percent of projected 2030 electricity generation) by 2030, up from just 8.15 billion kWh in 2009 (2.4 percent of 2009 electricity generation).

To entirely replace the previously planned nuclear generation with solar power would require over 303 GW of installed solar capacity by 2030. This would represent a more than 190-fold increase in solar generation. Using an estimated average cost over this period of $2.30/watt (see notes at end for assumptions), the solar installations necessary to make up for the reversal in Japan's nuclear plans would cost the country on the order of $688 billion.

Alternatively, replacing this generation with wind energy would require electricity generation from wind to increase from its current levels, 3.257 billion kWh (0.3 percent of total electricity) to 399 billion kWh (35 percent of projected 2030 electricity generation), a more than 120-fold increase in wind generation.

Roughly 227 GW of installed wind capacity would be required to full replace the planned nuclear generation. Using an estimate of $1.46/watt (again, see notes at end), this new wind capacity would cost Japan on the order of $334 billion.

Finally, assuming an average capacity factor of about 70 percent, 65 GW of new geothermal power stations would be required to meet the generation that would have been supplied by nuclear power. With cost estimates of geothermal plants ranging from $3.2/watt to $4/watt, this 65 GW would cost from $207 billion to $263 billion. However, Japan is estimated to have just 23.5 GW in geothermal potential, only enough to displace 36% of planned nuclear power generation in 2030. Today, geothermal energy provides just 0.2% of Japan's electricity.


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Major Assumptions

Calculating Carbon Emissions:

Emissions Factors
Coal: 0.795 tons C02 /MWh
LNG: Total: 0.474 tons/MWh
Combustion: 0.362 tons/MWh
Transportation: 0.106 tons/MWh (This includes both liquification and regasification of LNG)

Japan's current total carbon emissions: 1,222 million metric tons

Japan's total nuclear production in 2009 was calculated by summing yearly generation from each of Japan's reactors in 2009.

2030 nuclear generation in Japan was calculated by summing the net capacity of each of the Japanese reactors that began commercial operation in or after 2009, and calculating generation from these plants using a 90 % capacity factor.

Electricity generation in 2030 was calculated using a 0.7% demand growth scenario.

Planned nuclear generation was then calculated as 50% of 2030 total estimated electricity generation.

Lost nuclear generation by Japan's change in plans was thus calculated by summing the generation of Japan's nuclear plants that began operation after 1990 (using a capacity factor of 90 percent), and subtracting this figure from 2030 planned nuclear generation.

Calculating Construction Costs, Import Costs, and Trade Surplus:

Necessary kWh to replace nuclear generation were converted to equivalent in BTUs of either LNG or Coal. For LNG, a heat rate of 6,719 Btu/kWh was assumed. We also incorporated the assumption that 1.5% of LNG was retained by regasification facilities. For coal, an assumed a heat rate of 8,712 Btu/kWh was used.

Import Costs
Coal: $124/metric ton of Coal
LNG: $10/mmBTu

Future predictions of fossil fuel energy prices are inherently uncertain, but given that demands for fossil fuels are only going to rise, these estimates, using present prices for LNG and coal imports, are on the low end.

Trade Surplus
Japan had an average annual trade surplus between 2008-2010 of $46.6 billion.

Installation Costs:
LNG: $1200 USD/kW
Coal: Range from $1850 to $3,000 USD/KW
Nuclear: $3000-$7000/KW

While the World Nuclear Association indicates that Japan has planned to install 12 additional nuclear power plants by 2030 at an installed capacity of 16.532 GWe, correspondence with a Japanese colleague translating METI plans has indicated that Japan has intended to install 18.59 GWe of new nuclear capacity by 2030, to bring the country's total nuclear capacity to 68.06 GWe in 2030.

Renewables Calculations:
Current generation from nuclear was converted to necessary installed capacity, using capacity factors of 20% for wind power, and 15% for solar power, and 69% for geothermal power.

Solar Costs: Solar; Current estimates of costs of solar PV hover around 5$/w of installed capacity, while 2030 projected costs range from $1.20 to $0.60 per watt. As a ballpark figure, we weighted the cost of solar PV towards the average projected 2030 costs, and used an estimate of $2.27 per watt.

Wind Costs: Current estimates of the cost of wind installations average $2.8/watt, while 2030 projected estimates average $.80 per watt. Again, as a ballpark figure, we weighted the cost towards the average projected 2030 costs, and used an estimate of $1.47 per watt.