Japan Blackout Risk Eases on Cooler Weather
Robots Weld Bodies Of A Toyota Motor Corp Vehicle
Tomohiro Ohsumi/Bloomberg
Carmakers including Toyota, Honda Motor Co. and Nissan Motor Co. are closing their domestic plants on Thursdays and Fridays and operating during weekends from July to September, the Japan Automobile Manufacturers Association said.
Carmakers including Toyota, Honda Motor Co. and Nissan Motor Co. are closing their domestic plants on Thursdays and Fridays and operating during weekends from July to September, the Japan Automobile Manufacturers Association said. Photographer: Tomohiro Ohsumi/Bloomberg
July 25 (Bloomberg) -- Bloomberg's Mike Firn reports from Fujisawa, Japan, about Panasonic Corp.'s plans for the nation's first so-called smart town, which will showcase the company's household technologies. The plans are part of Panasonic’s effort to expand business built on energy-related products and to cut its reliance on television sales, as intensified competition erodes prices. Japan’s worst earthquake and tsunami cut power supplies across the country and boosted demand for energy-saving devices. (Source: Bloomberg)
July 22 (Bloomberg) -- Bloomberg's Mike Firn reports from Tokyo about Rakuten Inc.'s energy-saving efforts in the aftermath of the nation's record March 11 earthquake. Hiroshi Mikitani, president of Japan’s biggest online retailer Rakuten, quit the main business lobby Nippon Keidanren in protest over the group’s support for the energy status quo. (Source: Bloomberg)
July 1 (Bloomberg) -- Bloomberg's Mike Firn reports on the impact of Japan's record earthquake on Hitachi Construction Machinery Co., the world’s biggest maker of giant excavators. Hitachi Construction said on May 26 production recovered to a pre-earthquake level and that it expects profit to more than double this year. Firn speaks from the company's factory in Ibaraki, Japan, with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
Japan’s cities and industries may be saved from power blackouts this summer as energy-saving measures combined with cooler-than-expected temperatures reduce electricity demand.
Companies including Toyota Motor Corp. (7203) and Panasonic Corp. were bracing for power cuts this summer because of nuclear plant closures following the disaster at Tokyo Electric Power Co.’s Fukushima plant. Industries in parts of Japan were ordered to cut consumption by 15 percent starting July 1 to help cope with expected shortages, while households were asked to regulate use of air conditioners.
Instead, cooler weather has helped utilities cope with demand even as generating capacity fell when the government postponed the restart of nuclear reactors unaffected by the March 11 earthquake and tsunami that hit Fukushima, said Yuji Nishiyama, a Tokyo-based analyst at Credit Suisse Group AG.
“Right now, utilities are able to supply enough electricity,” Nishiyama said by phone yesterday. “However, a single problem at a 1,000-megawatt thermal plant may easily reduce the margin and, given that risk, the government is unlikely to lift the power savings measures.”
Thirty-eight of Japan’s 54 atomic reactors remain offline after the magnitude-9 earthquake triggered the worst nuclear crisis since Chernobyl. Mandatory maintenance every 13 months would also mean that just 13 may be operating this month, according to data from the Japan Nuclear Technology Institute.
Temperature Drop
Tokyo Electric, Japan’s largest utility known as Tepco, says power cuts may be necessary if peak demand reaches 97 percent of its daily capacity. Since energy-saving started on July 1, the highest percentage of capacity reached was 88.3 percent on July 11, according to data from the company. The peak forecast temperature that day was 32 degrees Celsius, according to Weathernews Inc. (4825)
Temperatures dropped over the latter part of the month as the jet stream pushed colder high pressure from the north into eastern Japan, resulting in lower-than-average readings in the capital, Hajime Takayama, a forecaster at the Japan Meteorological Agency, said in a phone interview yesterday.
The average temperature in Otemachi, Tokyo’s financial district, was 25.1 degrees Celsius (77.2 degrees Fahrenheit) over the last 10 days of July, 1.9 degrees lower than the 30- year average, Takayama said.
Tepco forecast peak demand to reach 55,000 megawatts through the month of August compared with a forecast capacity of 56,100 megawatts at the end of the month, the company said in a statement on July 29. The forecast takes into account plans to idle two reactors with a total capacity of 2,456 megawatts at its Kashiwazaki-Kariwa nuclear plant, located about 215 kilometers (134 miles) west of the crippled Fukushima station.
Precautions
Some Japanese manufacturers have taken measures to prevent energy shortages disrupting production.
Carmakers including Toyota, Honda Motor Co. and Nissan Motor Co. are closing their domestic plants on Thursdays and Fridays and operating during weekends from July to September, the Japan Automobile Manufacturers Association said.
Panasonic Corp. (6752), Japan’s largest maker of home appliances, is adding power generators at five factories and offices in areas supplied by either Tepco or Tohoku Electric, Machiko Miyai, a director in charge of environmental affairs, told reporters on June 30. Some of the company’s domestic offices are shifting operation hours to earlier than usual and urging some employees to work from home to save power, she said.
Moving Away
Others companies including Sharp Corp. and Mitsui Mining & Smelting Co., Japan’s biggest zinc smelter, plan to move production abroad because of concern that nuclear plants will remain closed as the Japanese government explores renewable alternatives such as wind and solar power.
The government is moving to ease the burden on manufacturers in northern areas affected by the earthquake by relaxing power-saving targets, the Nikkei newspaper reported yesterday. The target may be lowered to 10 percent from 15 percent in Iwate, Miyagi and Fukushima prefectures, all served by Tohoku Electric Power Co., the newspaper said.
Tohoku Electric’s capacity has been reduced by the closure of its Onagawa and Higashidori nuclear stations.
Since the March 11 earthquake and tsunami caused the biggest radiation fallout in 25 years, utilities in Japan have scrambled to find oil and natural gas for thermal power plants. Liquefied natural gas imports climbed 11 percent to 6.23 million metric tons from a year earlier in June while crude oil imports gained 1.9 percent to about 15.4 million kiloliters, official data show.
Being Prepared
The day after Prime Minister Naoto Kan asked Chubu Electric Power Co. on May 6 to idle its Hamaoka nuclear power plant because of safety concerns, the utility’s chairman, Toshio Mita, flew to Qatar to hold talks on additional gas supplies. On May 9 Chubu Electric said it would shut the plant, forcing the company to buy an extra 4 million metric tons of LNG on top of 8.42 million tons planned for the year ending March 2012.
“It may be true that utilities overestimated summer electricity demand,” Credit Suisse’s Nishiyama said. “It would be worse if they weren’t prepared for a hot summer assuming that temperatures would be cool. From a supply side perspective, it’s rational for utilities to assume maximum demand.”
To contact the reporters on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net; Tsuyoshi Inajima in Tokyo at tinajima@bloomberg.net.
To contact the editor responsible for this story: Peter Langan at plangan@bloomberg.net.
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