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Japan announces it will phase out nuclear power by 2040

“Japan’s decision to end nuclear power is a pragmatic and political one that in effect has pushed nuclear closures out 25 years. By announcing this policy, Japanese utilities are now better poised politically to restart reactors closed following Fukushima, and to subsequently reduce the adverse environmental and financial burdens that have resulted from the country’s increase in fossil fuels.”

“The future of the nuclear power industry does not lie within the Japanese market. Much more important markets are China, India, Southeast Asia, and the Middle East. Announcements to turn-away from nuclear in these markets would be much more detrimental to the industry.”

“Given the seismic history of Japan, as well as its population density of 336 people per square kilometer, expanding a nuclear infrastructure there makes less sense than doing so in geologically stable areas with low population densities. Northern Alberta, for example, has 1.2 people per kilometer, plenty of inexpensive natural gas, and is geologically much more stable. Exporting its natural gas to Japan to displace its nuclear capacity makes more sense.”

“Decisions by both Japan and Germany to wind down their respective nuclear infrastructure pose a challenge to the renewable industry. How well these technologies can respond without higher electricity prices and without increasing GHG emissions from stand-by and back-up fossil technologies will be closely scrutinized by politicians and industry alike.”

“The nuclear industry paradigm is changing for developed economies. Instead of large nuclear reactors, utilities will be more interested in small modular reactors that incorporate passive safety features, can better withstand seismic events, and more easily integrate into a utility’s load with increasing shares of renewable technologies. The Japanese policy shift may in fact speed commercial development of innovative small nuclear reactors.”

Chris Gadomski

Lead Analyst, Nuclear

Bloomberg New Energy Finance

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