They unplugged their heated toilet seats and avoided blackouts.
Japan sorely needs bright ideas
Article by: THE ECONOMIST Updated: September 19, 2011 - 7:21 PM
The country's powerful energy monopolies raise costs and stifle innovation.
http://www.startribune.com/business/130165393.html
The corridors were dark, the air uncomfortably hot. The lights at the headquarters of the Tokyo Electric Power Co. (Tepco) were largely switched off; the air-conditioners were turned down. Even the chief executive, Toshio Nishizawa, had removed his tie for an interview. In normal times, that would be a glaring breach of corporate etiquette, but these are not normal times.
Since the earthquake and tsunami of March 11, most nuclear reactors in Japan have been shut down for maintenance and not restarted: 43 out of 54 remain idle. There has been a national drive for setsuden (conserving energy). Tepco must be seen to share the pain.
The company is staggeringly unpopular. One of its nuclear plants at Fukushima was damaged on March 11. In the crucial hours after the tsunami, Tepco failed to add water to cool the reactor cores. It was unable to restore steady backup power until days later and inexplicably delayed venting a buildup of pressure that led to hydrogen explosions.
As if that were not bad enough, Tepco withheld information from everyone, including the then-prime minister, Naoto Kan, who stormed into its headquarters yelling: "What the hell is going on?" A meltdown began several hours after the tsunami struck, but wasn't officially disclosed until nine weeks later. "We have lost trust," admitted Nishizawa. Regaining it will take "a long, long time," he added.
Asked whether the reactor was damaged by the quake itself (as distinct from the tsunami that followed it), Nishizawa said it is unclear: we must wait for a report in November. This is a key question: If Japan's reactors aren't quake-proof, then none of the country's nuclear plants may be safe. An official at a nuclear regulator says there is evidence that the quake did indeed damage the plant's reactors before the tsunami hit.
Since the disaster, Japan's people have made heroic efforts to save energy. Households snuffed out lights and unplugged their heated toilet seats. Big companies reduced their energy use by 15 percent (on pain of fines). Many began the workday earlier or switched to night shifts. The car industry took Thursdays and Fridays off and toiled on weekends, when electricity demand is lower. In Tepco's region (around Tokyo), peak usage fell to 49 gigawatts, from 60 gigawatts last year. Everyone expected blackouts; none occurred. On Sept. 9, as the summer's heat faded, the government announced an end to setsuden.
Yet Japan's energy problems are far from resolved. If the nuclear freeze lasts for a year, it will cut GDP by an estimated 3.6 percent and destroy almost 200,000 jobs. Meanwhile, three-fifths of the public say they have little confidence in nuclear power.
Japan needs a robust and diverse energy industry. Instead it has 10 regional monopolies (Tepco is one), which hog 97 percent of the market for electricity generation and transmission. Residential consumers pay nearly twice as much as Americans and three times as much as South Koreans.
Electricity prices are high because the monopolies have little incentive to cut costs. On the contrary, their profit margins are fixed by the government, so if they inflate their costs, they boost their income. At the same time, the utilities charge residential consumers a flat rate, giving them no incentive to run appliances during off-peak hours. Alternative energy gets short shrift. Although Japanese firms are leaders in green technologies such as wind, solar and geothermal, these sources account for only 1 percent of the country's power generation.
The new government of Yoshihiko Noda wants to reduce reliance on nuclear power in the medium term, but hopes to restart idle reactors in the meantime. Without cheap, reliable power, businesses may move abroad.
New firms are clamoring to enter the energy business. Masayoshi Son, a wireless tycoon, plans to build huge solar-power stations and a new grid to connect Japanese prefectures. But the regulatory process is a nightmare, he says.
A new law on green energy gives few clues as to how new producers can sell power to the grid, or whether the incumbents have to buy it.
Not even an earthquake, it seems, can shake the monopolists' grip.
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