IEEJ： February 2014ｃ IEEJ 2014
○Special Bulletin
A Japanese Perspective on the International Energy Landscape (160)

February 17, 2014

Japan's Future Energy Policy Challenges
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, JapanThe next development regarding Japan's energy policy is attracting attention after thehigh-profile Tokyo gubernatorial election. It is significant that former Health, Labour and Welfare
Minister Yoichi Masuzoe achieved a landslide victory against major candidates who had called foreliminating nuclear generation immediately in the Tokyo election campaigns.
Whether energy policy matters including nuclear power generation’s position could
become a major issue for the local Tokyo gubernatorial election was called into question. Even
though Tokyo is Japan's most populated and the largest energy-consuming city and a major
shareholder in Tokyo Electric Power Co. plagued by the Fukushima nuclear plant accident, theenergy policy is one of the “national” policy matters involving the whole of the nation. Irrespectiveof this question, however, the nuclear energy problem undoubtedly attracted attention in the Tokyoelection campaigns. The election was thus expected to exert a great impact on the national energy
policy consideration depending on the election results.
A key point regarding the results is that the Tokyo gubernatorial election was not any“single-issue” election focusing on Tokyo voters' opinions on nuclear power generation. While theenergy problem was a key matter of interest to voters, there were more important matters including
economic and social security issues. We may have to interpret the election results as reflecting Tokyo
voters' decisions from a comprehensive perspective covering all these problems. In this sense, it may
be too early to draw any conclusion about Tokyo voters' energy policy mandate based on thegubernatorial election results alone. However, if any candidate calling for an immediate end to
nuclear power generation had won or fought a close race with the winner in the election, it could
have exerted a great impact. In this sense, the election results can be expected to have a substantial
impact on Japan's future energy policy.
The next focus of attention under such situation is the Cabinet's decision on Japan's new
Basic Energy Plan. After considering the new plan, the Strategic Policy Committee of the Advisory
Committee for Natural Resources and Energy released an opinion on the plan late last year,
positioning nuclear power generation as a key energy source while giving top priority to safety basedon deep reflection on the Fukushima accident. Since then, however, the Cabinet has postponed its1

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○decision on the new Basic Energy Plan due partly to the abovementioned Tokyo gubernatorialelection. Media reports state that the government and ruling parties have various opinions about theposition of nuclear energy and are required to coordinate these opinions. As far as the energy policy
is linked to national fundamentals, prudent and sufficient discussions and considerations on thepolicy are important as a matter of course. Based on sufficient considerations, however, thegovernment is required to decide and implement the policy as early as possible. In this sense, we arelooking forward to the Cabinet's decision on the new Basic Energy Plan based on coordination ofviews within the government.
The Cabinet decision on the new Basic Energy Plan will still leave key energy policy
challenges for the future. One of them is energy mix details. The opinion released late last year
offered a summary of qualitative views, falling short of specifying a quantitative target for eachenergy source for a specific forecast period. Given the nature of investment in the energy area which
requires a long lead-time for producing investment results, it is important to have quantitative policy
targets in implementing the energy policy. It is significant to have quantitative reference standards
for making objective and reasonable policy decisions. As all nuclear power plants in Japan are left
offline with no specific schedule given for their restart, quantitative details of the energy mix may
have uncertainties and be difficult to work out. But we cannot get around the energy mix problem.
In addition to deciding and implementing the new Basic Energy Plan as a comprehensive
program, Japan must work out and put into practice individual policy measures based on the plan.
One attention-attracting energy problem is how to restart nuclear plants. While the Nuclear
Regulation Authority has been examining individual nuclear plants' conformity with the new safety
standards since last July, the largest problem for Japan's energy at present is when the NRA will
make decisions on the safety of specific nuclear plants. These decisions and their timings will havegreat impacts on energy supply and demand for the immediate future and on a national wealthoutflow through growing fossil fuel imports, as well as on the abovementioned energy mix
discussions.
As a matter of course, energy policy challenges are not limited to the nuclear problem.
Advisory panels on oil, natural gas, coal, renewable energy, energy conservation and other policies
are expected to respectively discuss stable supply and environmental and industrial measures basedon the new Basic Energy Plan. Existing energy policies may also have to be reviewed withconsiderations given to developments after the Fukushima accident and the U.S. shale revolution.
The Advanced Energy Supply Structure Act, which was enacted and implemented in July 2009 andcalls for advancing oil, electricity and gas supply systems, may have to be reconsidered withdevelopments at home and abroad after the enactment also taken into account. Considering andimplementing international energy policies and strategies involving resources procurement andinfrastructure exports will also be important. The government will be required to implement aninternational energy strategy in conformity with diplomacy with the United States, the Middle East,
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○Russia, China and Asia. As Japan's energy policy is entering a crucial stage, the nation must
concentrate its wisdom to discuss the policy.
Contact: report@tky.ieej.or.jp
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