Japan 2012/13 Energy Demand to Rise on Account of Suspended Nuclear Reactors

With the operations of Japan's nuclear reactors still suspended as an aftermath of the March 11 earthquake and tsunami, overall energy demand of the world's third-largest economy will upsurge sharply in 2012/13.

According to the Institute of Energy Economics, Japan (IEEJ), the country's energy requirements for oil, gas and thermal coal for power generation will grow in the next two years if the government continues to suspend the operations of the reactors that have been shut due to maintenance works.

Japan's appetite for natural gas consumption will grow by 10 per cent if the reactors are not restarted. Imports of liquefied natural gas ( LNG ) could go up to 90 million tonnes in 2012/13, from just 70 million tonnes in 2010, the IEEJ said.

On Wednesday, Tokyo Electric Power Co. and the Japanese government released a roadmap schedule that will aid the dismantling of the damaged Fukushima nuclear plant in the next 30 to 40 years. According to the timetable, within the next two years, Tepco will extract the spent fuel rods at Fukushima Dai-Ichi, after which its engineers will then attempt to slowly haul out melted fuel from one of the reactors within a decade.

It is not clear if the Japanese government will allow the reactors to reopen while the slow demolition job is taking place.

But should the government reconsiders to resume the operation of the plants, the IEEJ said the country's total oil product sales will fall by 3.9 per cent in the financial year starting April.

Usage of natural gas for power generation will also drop 13.4 per cent in 2012/13, from earlier projections of a 30.2 per cent surge in 2010/11.

Moreover, Japan's carbon dioxide (CO2) emissions from burning fuel will drop 5.3 per cent to 1.086 billion tonnes in 2012/13 if nuclear reactors restart operations from next summer, the IEEJ pointed out.

Japan had been importing tonnes of coal to fuel up its energy requirements. Unfortunately, its 2012/13 emissions volume will grow 2.5 per cent above its recorded 1990/91 level. Under the Kyoto Protocol, Japan is required to slash its contributions of greenhouse gas emissions by 6 per cent from 1990/91 levels to 1.186 billion tonnes a year over the five years to March 2013.

Government data gathered by Reuters News showed that Japan's LNG imports spiked 21 per cent to its second-highest level in November, as gas-fired power generation filled the void caused by the shutdown of the nuclear reactors.

Read more:

Japan's Tepco Lays Down Roadmap Towards Demolishing Fukushima Reactors

All Systems Go for Australia-Japan LNG Project Partnership

Global Scarcity of Uranium Looms

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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