Additional nuclear restarts in Japan are unlikely this year, sustaining record demand for liquefied natural gas in a country that once depended on atomic power for about a third of its energy, according to Wood Mackenzie Ltd.
Japan’s nuclear capacity will be just half of what it was before the 2011 disaster at Tokyo Electric Power Co. (9501)’s Fukushima plant even after the facilities are reinstated, Nicholas Browne, a Singapore-based gas analyst for Wood Mackenzie, said in an interview yesterday in Tokyo. Restoring those sites could take as long as three years, he said.
Japan imported a record 87.3 million metric tons of LNG in 2012 to make up for a power generation shortfall after safety checks idled most of its nuclear plants. All but two out of the 54 reactors operating before the March 11, 2011, earthquake and tsunami remained shut for safety checks as of the end of last year. Utilities will have to meet new safety standards from the Nuclear Regulation Authority before starting their idled facilities. The rules will go into effect in July.
“In terms of the nuclear ramp-up, we see a gradual process from the start of 2014 through to the end of the summer of 2015,” Browne said. “Some of the discussions we’ve had with Japanese companies suggest it could easily be a three-year process, where the government takes a rigorous approach and takes a long time to decide.”
The estimate that only about half of Japan’s nuclear capacity will return is based on the age of some reactors and other attributes that may lead them to be judged unsafe to restart, said Browne.
Japan’s intake of LNG for 2013 will be similar to last year’s, when safety checks at atomic power stations left the country with no nuclear plants for about two months, according to Wood Mackenzie. Imports are expected to rise to about 101 million tons by 2030, as reactors are decommissioned after reaching the end of their 40-year operation limits and some oil- fired generation is replaced with gas, Wood Mackenzie said.
“We see the Japanese gas market as being a market of moderate growth,” Browne said. “There are some fundamentals to outweigh issues such as falling population and other topics which put a dampening effect on demand.”
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