As Japan restarts its nukes, LNG imports fallDavid Wagman | March 04, 2019
Eight years after the Fukushima nuclear power plant accident, Japan has restarted nine nuclear reactors, including five in 2018.
Units all across the country were ordered shut after the 2011 accident, which occurred after an earthquake and tsunami hit the country, killing thousands and crippling the six-unit boiling water reactors (BWRs) at Fukushima. At the time, the plant had a total generating capacity of 4.7 gigawatts (GW).
As some of the country's reactors return to full operation, generation from fossil sources is likely to be displaced, in particular natural gas. The Energy Department's Energy Information Administration (EIA) said that imports of liquefied natural gas (LNG) for the country's electric power sector could fall by as much as 10% in 2019.
With the restarts, Japan now has nine operating nuclear units with a total electricity generation capacity of 8.7 GW. Electricity generation produced by natural gas-fired plants in Japan has been declining annually from its peak in 2014. EIA said it is likely to decline further in 2019, as generation from nuclear units increases.
The country had no nuclear generation from September 2013 to August 2015. The pace of nuclear restarts has been slow, with the average reactor requiring nearly four years to come back online.
EIA said that existing coal-fired power plants were operating near full load, so utilities had to import large volumes of LNG to meet electricity demand.
EIA estimates that the restarted nuclear reactors will further displace Japan’s LNG imports by about 5 million metric tons per year (MMmt/y), or 0.7 billion cubic feet per day (Bcf/d) of LNG. This amount is equivalent to 10% of Japan's power sector natural gas consumption and 6% of Japan’s LNG imports in 2018.
Crude oil and petroleum product consumption for power generation also rose between 2011 and 2013. EIA said that utilities spent about $30 billion each year for additional fossil fuel imports in the three years following the Fukushima accident. Generation from crude oil and petroleum products returned to pre-Fukushima levels by 2014, mainly due to relatively high crude oil prices.
Japan relies on imported LNG to meet all of its natural gas demand. It imports more LNG than any other country, averaging 11 Bcf/d in 2016 through 2018. LNG imports from Australia have grown in the past two years to make up more than one-third of the total imports. Those supplies have displaced imports primarily from Malaysia and Qatar. In 2016 through 2018, these three suppliers accounted for 60% of Japan’s LNG imports, EIA said.
LNG imports from the United States account for a small percentage of total imports, but they rose from 0.16 Bcf/d in 2017 to 0.3 Bcf/d in 2018, according to data from Japan’s Ministry of Finance. Japan’s LNG importers have signed long-term contracts with U.S. LNG export projects such as Freeport, Cameron and Cove Point.
Japan's long-term energy policy calls for the nuclear share of total electricity generation to reach 20% to 22% by 2030, which would require up to 30 reactors to be in operation. EIA said that of the remaining fleet of 35 operable reactors, nine are currently operating, six have received initial approval from Japan’s Nuclear Regulation Authority, 12 are under review, and eight have yet to file a restart application.