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REFILE-Japan seen exiting nuclear power by 2030s

Source: Thomson Reuters Foundation - Fri, 14 Sep 2012 05:18 GMT
Author: Reuters
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(Recasts headline)

* New strategy would underpin Japan's LNG, oil purchases

* Government set to call for restart of idled reactors if deemed safe

* Japan's anti-nuclear movement to oppose any proposal to restart plants

By Linda Sieg and Aaron Sheldrick

TOKYO, Sept 14 (Reuters) - Japan is expected on Friday to propose abandoning nuclear power by the 2030s, a major shift from policy goals set before last year's Fukushima disaster that aimed to increase the share of atomic energy to more than half of electricity supply.

But Prime Minister Yoshihiko Noda's unpopular government, which could face an election this year, also looks set to call in the meantime for the restart of reactors idled after the 2011 disaster if they are deemed safe by a new atomic regulator.

Japan's growing anti-nuclear movement, which wants an immediate end to atomic power, is certain to oppose any such proposal to secure electricity supplies.

A shift from nuclear means Japan should seal its position as the world's biggest importer of liquefied natural gas (LNG) and third-largest purchaser of oil to feed its power stations.

The government estimated last week it will need to spend about 3.1 trillion yen (${esc.dollar}40.03 billion) more on fuel imports a year if it abandons nuclear power immediately.

Japan's hunger for energy has helped sustain an investment boom in gas projects from Australia to new export terminals in the United States, where a shale gas revolution is in full swing. LNG prices also soared earlier this year as Japan scoured the world for supplies.

Japanese ministers were due to meet on Friday afternoon and media said a decision was expected then with the cabinet likely to sign off on the new energy policy as early as next week.

A new policy would comes 18 months after a March 2011 earthquake and tsunami devastated Tokyo Electric Power Co's Fukushima Daiichi plant, triggering meltdowns, spewing radiation and forcing some 160,000 people to flee.

The new strategy, which would strictly apply a rule limiting the operation of reactors to 40 years, will also call for a push to reduce energy consumption by raising efficiency but leaves unclear the fate of Japan's troubled programme to reprocess nuclear waste, according to a source familiar with a draft.

BUSINESS LOBBY OPPOSITION

Noda's decision is unlikely to resolve fierce debate over whether reducing atomic power's role will do more harm or good to the economy. Nuclear power provided 30 percent of Japan's electricity before the Fukushima disaster crippled the sector.

And with Noda's Democratic Party expected to lose the general election, there is no guarantee that the next government would stand by the policy.

Japan's powerful business lobbies also argue that exiting nuclear energy in favour of fossil fuels and renewable sources such as solar and wind power will boost electricity prices, making industry uncompetitive and complicating efforts to reduce greenhouse gas emissions. The shift also threatens the financial viability of Japan's nine nuclear operators.

Abandoning nuclear power could also annoy the United States, Japan's key ally and the world's largest producer of nuclear power.

Anti-nuclear advocates counter that warnings of economic damage are exaggerated. They say the policy shift will create new openings for corporate profits in areas such as renewable energy that will spark innovation and give the economy a boost.

"A total exit from nuclear is positive for the economy, on balance," said Andrew Dewit, a professor at Rikkyo University who studies energy policy.

"It incentivises Japan's political economy to focus on efficiency and renewables. Japan lags in both these areas and they offer the greatest opportunities for growth."

Surveys show that a majority of voters favour exiting nuclear power sooner or later.

With all 50 of Japan's reactors taken off line after the disaster, Noda's decision to restart two units to avoid potential outages this summer galvanised anti-nuclear protests.

Investments in renewable energy are already ramping up since the July 1 introduction of a generous feed-in-tariff system that requires utilities to buy the electricity generated and allows them to pass on extra costs to consumers.

Renewable energy excluding hydro-electric dams currently accounts for a slim 1 percent of Japan's electricity supply. (Additional reporting by Kentaro Hamada; Editing by Ed Davies)

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