Table 3 shows estimated energy reserves in Japan.

TABLE 3. ESTIMATED AVAILABLE ENERGY SOURCES

* Solid, Liquid: Million tons; Gas: Billion m³; Uranium: Thousand metric tons; Hydro, Renewable: GW

Data at the end of 2014

** Conversion rate from Oil (kl) to Oil (t): 0.855; from LNG(t) to LNG (m³): 1,220

Source: Uranium; Nuclear Regulation Authority

Others: Agency for Natural Resources and Energy

In the past, Japan was importing a large amount of inexpensive crude oil. In fiscal 1973, oil accounted for 75.5% of its total energy consumption. However, Japan then sustained surging oil prices amid the first oil crisis, which arose in 1973 in the wake of the Fourth Middle East War. In growing fears of oil supply cuts, Japan decided to reduce its reliance on oil as the primary energy source and instead introduce more of nuclear power, natural gas, and coal in order to stabilize the country’s energy supply.

As the result, Japan’s dependence on oil reduced from 75.5% in 1973 to 39.8% in fiscal 2010. Meanwhile, the country accelerated the diversification of energy sources to include coal (22.5%), natural gas (19.2%), and nuclear power (11.1%). However, with the shutdown of nuclear power plants after the Great East Japan Earthquake of 2011, consumption of fossil fuel as an alternative to nuclear power increased to a great extent. Although oil consumption has been decreasing in recent years, the role of oil in total energy consumption increased to 41.4% in fiscal 2014, with nuclear power representing 0.0%.

TABLE 4. ENERGY STATISTICS

* Latest available data (fiscal year)

** Energy consumption = Energy production+ Net import (Import - Export) ± Stock change

*** Solid fuels include coal, anthracite and lignite.

**** Conversion from electricity production to primary energy production is based on net efficiency of

thermal power generation by general electricity utilities.

Source: ”General Energy Statistics,” Agency for Natural resources and Energy.

Without sufficient domestic sources of energy, Japan has to depend heavily on imports, that is, the country’s energy situation is highly subject to changes in international circumstances, as well as in domestic demand. This is a big issue to Japan’s security especially at a time when the country is struggling to overcome recent dynamic geopolitical turmoil.

In order to handle these situations, Japan should develop an energy policy based on a long-term, comprehensive, systematic perspective.

The Basic Act of Energy Policy was enforced in June 2002 for the purpose of ensuring steady implementation of energy policies. Based on the act, the First Strategic Energy Plan was drawn up in October 2003, followed by the second and third plans in March 2003 and June 2010, respectively. In the third plan, Japan aims to nearly double its self-sufficiency ratio in the primary energy supply to about 70% by 2030 by domestically developing fossil fuel.

However, after the third plan, the domestic and international circumstances surrounding energy changed drastically in the wake of the Great East Japan Earthquake and the accidents at Tokyo Electric Power Company (TEPCO)’s Fukushima Daiichi Nuclear Power Station(hereinafter referred to as the “TEPCO’s Fukushima Daiichi accident”).

In Japan, the fourth “Strategic Energy Plan” was drawn up in April 2014 after the TEPCO’s Fukushima Daiichi accident. The plan shows the direction of the government policies to balance the achievement of the “3E+S (Energy Security, Economic Efficiency, Environmental protection, and safety)”. The following policies were set forth to construct a multi-layered, diverse, and flexible energy supply-demand structure: (1) achieving a strong, realistic, and multi-layered supply structure by which each energy’s strengths are used and weaknesses are compensated; (2) Having the participation of various main bodies and availability of various options and creation of a more flexible and effective energy supply-demand structure; and, (3) promoting and developing and introducing domestic energy, as well as improving the energy self-sufficiency ratio to minimize the impact of changes in circumstances overseas.

In the above government policy, nuclear energy is positioned as follows:

Nuclear power’s energy output per amount of fuel is overwhelmingly large and it can continue producing power for several years only with domestic fuel stockpile. Nuclear power is an important base-load power source. As a low carbon and quasi-domestic energy source, it contributes to the stability of the energy supply-demand structure, on the major premise that its safety is ensured, because of: 1) its superiority in terms of stability of energy supply and efficiency, 2) its low and stable operational costs, and 3) freedom from GHG emissions during operation.

Dependency on nuclear power generation will be lowered to the extent possible through energy savings and introduction of renewable energy, as well as improvements to the efficiency of thermal power generation.

The Electricity and Gas Industry Committee, comprising non-governmental professionals and experts, provides advice and recommendations to The Ministry of Economy, Trade and Industry (METI) on a regular basis, regarding the basic national policies to achieve stable supplies of power, promote demand-oriented energy-saving measures, promote load leveling, and further develop electric power. Based on this advice, METI and related Ministries and Agencies confer regularly with individual power companies to review up-to-date demand and supply performance and evaluate the power supply programme for the future.

Japanese electricity market was divided into nine geographical zones with an electric power company in each zone. These are private enterprises that specialize only in electric utility operations and are the main power suppliers in each zone though the electricity market was partially liberalized. Apart from these companies, there is also the Okinawa Electric Power Company. This is a smaller electric utility company operating in Okinawa Prefecture, which comprises many small islands. These power companies operate their own facilities from power generation to transmission and distribution as integrated business operations.

The Electric Power Development Company, which has its own thermal and hydroelectric power stations, and the Japan Atomic Power Company, which has its own nuclear power stations, are private enterprises that produce electric power and act as wholesalers to the nine electric power companies. However, in relation to Japan's total installed capacity, their installed capacity is relatively small.

It was decided by the Cabinet to carry out a bold reform under the “Policy on Electricity System Reform” (April 2013) to expand cross-regional system operation, full retail competition, and to ensure the neutrality of the power transmission and distribution sectors through legal unbundling.

Regarding the reform, some steps have taken place. Firstly, the Organization for Cross-regional Coordination of Transmission Operators (OCCTO) was established in April 2015. Then, in September 2015, the Electricity and Gas Market Surveillance Commission (EGC) was established under the Ministry of Economy, Trade and Industry, in order to strengthen monitoring of the electricity, gas and heat power trading market. After setting up those two new institutions, the electricity retail market was fully liberalized as of April 2016. The legal unbundling has not been done except for TEPCO (Tokyo Electric Power Company) but it will be taken place in April 2020.

TABLE 5. ELECTRICITY PRODUCTION, CONSUMPTION, AND CAPACITY

* Latest available data (fiscal year)

** Electricity transmission losses are not deducted.

*** Total electricity consumption is based on the “General Energy Statistics”, which includes electricity own-use by autoproducers and electricity transmission losses.

Source: Agency for Natural Resources and Energy

TABLE 6. ENERGY RELATED RATIOS

* Latest available data (fiscal year)

** Energy consumption = Energy production + Net import (Import - Export) ± Stock change

*** Nuclear/Total electricity is based on the figures of Electricity Production on the TABLE 5.

**** Ratio of external dependency = (Energy consumption - Energy production) /Energy consumption

Source: “General Energy Statistics,” Agency for Natural resources and Energy

“Basic Resident Register,” Ministry of Internal Affairs and Communications

Enactment of the “Atomic Energy Basic Law (1955)” promoted atomic energy development and utilization for peaceful objectives in compliance with the three basic principles of Democratic Management, Voluntary Action, and Open Information. Inauguration of the Atomic Energy Commission (1956) established an advisory board for the Prime Minister on matters regarding the promotion of atomic energy development and utilization.

“Long-term programme for Research, Development, and Utilization of Nuclear Energy” (Long-term Programme) was formulated in 1956. Today, it is the basic nuclear power development and utilization programme for the nation. The plan is revised and updated every five years.

The Ministry of International Trade and Industry (formerly METI) was reorganized in 1966 to accommodate its increasing workload. This change provided additional rules and regulations for introducing commercial light water reactors in Japan after 1966.

In 1974, three basic laws for promoting electric power development were enacted; namely, the “Law for the Adjustment of Areas Adjacent to Power-Generating Facilities,” the “Electric Power Development Promotion Tax Law,” and the “Special Account Law for Electric Power Promotion.” These laws also advanced the appropriate siting of nuclear power stations.

In 1978, the Nuclear Safety Commission was formed as a separate entity from the Atomic Energy Commission. Safety assurance measures were enhanced in 1980 to reflect lessons learned from the TMI-2 Accident (1979) and, later, the Chernobyl No. 4 Accident in 1986.

The overall appraisal of the “Vision of Nuclear Power” in 1986 provided long-range prospects for energy availability and electric power requirements through 2030, and a programme for enhancing safety called “Safety 21,” which further reinforced safety assurance measures. In 1990, Japan revised its supply targets to include alternative energy sources to mitigate its growing demand for oil and its contribution to the greenhouse effect.

The Japanese government carried out administrative reforms in January 2001. In that year, the Nuclear and Industrial Safety Agency (NISA) was formed as a special institution of the Agency of Natural Resources and Energy of the Ministry of Economy, Trade and Industry (or METI, which was renamed from the Ministry of International Trade and Industry, or MITI), to have jurisdiction over matters of nuclear and industrial safety. Besides, The Atomic Energy Commission and Nuclear Safety Commission (NSC) of the Cabinet Office gave high-level independent and appropriate directions to other ministries and agencies.

The earthquake that occurred off the Pacific coast of the Tohoku region on March 11, 2011 and subsequent tsunami damaged TEPCO’s Fukushima Daiichi Nuclear Power Station and the Fukushima Daini Nuclear Power Station. In particular, at TEPCO’s Fukushima Daiichi Nuclear Power Station, an extremely serious accident measured at Level 7 on the International Nuclear and Radiological Event Scale (INES) occurred. A report by the National Diet of Japan Fukushima Nuclear Accident Independent Investigation Commission noted that “the regulators did not monitor or supervise nuclear safety. The lack of expertise resulted in ‘regulatory capture,’ and the postponement of the implementation of relevant regulations. They avoided their direct responsibilities by letting operators apply regulations on a voluntary basis. Their independence from the political arena, the ministries promoting nuclear energy, and the operators was a mockery. They were incapable, and lacked the expertise and the commitment to assure the safety of nuclear power.”

Based on the lessons learned from the accident, the Nuclear Regulation Authority (NRA) was established as an external organ of the Ministry of the Environment by separating the functions of promotion and regulation of nuclear energy, with the aim of avoiding potential problems when a single government organization acted both as a regulatory authority and one promoting wider use of nuclear energy. It was also established as an authority under Article 3⁽¹⁾ so that the Chairman and the Commissioners can exercise an independent, neutral and fair role, based on their own expertise. Additionally, in order to eliminate the harmful effects of a vertically-divided administration, the NRA shall integrally govern regulations on nuclear energy, nuclear security, safeguards based on international commitments, radiation monitoring, and regulations on the use of radioisotopes, which previously had been governed by other administrative organs. On March 1, 2014, the Incorporated Administrative Agency, the Japan Nuclear Energy Safety Organization and all of its activities were integrated into the NRA.

The Ministry of Education, Culture, Sports, Science and Technology (MEXT) was created through a merger of the former Ministry of Education, Science, Sports and Culture and the Science and Technology Agency (STA). MEXT is responsible for administering nuclear energy for science and technology. Its key roles are nuclear research and development (including nuclear fuel cycle, FBR, and accelerators), human resources in the field of nuclear energy and nuclear liability. It is also responsible for supervising the Japan Atomic Energy Agency.

The Ministry of Economy, Trade and Industry (METI) is in charge of those areas in which it had been involved previously as the Ministry of International Trade and Industry (MITI), or taken over from STA, related to nuclear fuel cycle activities (refining, enrichment, fabrication, reprocessing, and waste disposal). Nuclear power-related issues are the responsibility of the Agency of Natural Resources and Energy.

The Ministry of Foreign Affairs (MOFA) is responsible for international aspects of nuclear energy utilization, including implementation of related international treaties and conventions.

FIG. 1 Japan’s Organization Chart

Legend of Figure 1:

MOE: Ministry of Environment

NRA: Nuclear Regulation Authority

METI: Ministry of Economy, Trade and Industry

JAEC: Japan Atomic Energy Commission

ANRE: Agency of Natural Resources and Energy

MEXT: Ministry of Education, Culture, Sports, Science and Technology

MOFA: Ministry of Foreign Affairs

JAEA: Japan Atomic Energy Agency

Table 7 and Figure 2 provide lists and locations in Japan of nuclear power plants in operation, under construction, together with those that are out of service. As of May 2016, the total capacity of nuclear power generation was 45,775 MWe.

Due to the TEPCO’s Fukushima Daiichi accident, it was decided to decommission Units 1 to 4 on April 19, 2012 and Units 5 and 6 on January 31, 2014.

TABLE 7. STATUS AND PERFORMANCE OF NUCLEAR POWER PLANTS

FIG. 2 Nuclear Facilities in Japan

The Approval System for the Extension of Operational Period:

The new regulatory regime also places a 40 year limit on the operation of power reactors, although operators may apply for a one-time life extension of no more than 20 years for a reactor with 40 operational years, provided that regulatory approval is obtained before the normal 40 year expiration date.

On the premise that safety comes first and that every possible effort is made to resolve the public’s concerns, a judgment as to whether nuclear power plants meet the new regulatory requirements will be left to the NRA. If the NRA confirms the nuclear power plants conform to the new regulatory requirements, which are the most stringent in the world, GOJ will follow NRA’s judgment and proceed to restart the nuclear power plants. In such case, GOJ will make its best efforts to obtain the understanding and co-operation of the host municipalities and other relevant parties. At present, GOJ does not consider adding power generation capabilities or replacing existing facilities.

Dependency on nuclear power generation will be lowered to the extent possible by saving energy and introducing renewable energy, as well as improving the efficiency of thermal power generation.

GOJ released the Long-term Energy Supply and Demand Outlook on July 16, 2015. In the plan government set a target of its dependency on nuclear power to 20-22% by 2030.

In Japan, private electric power suppliers manage construction of nuclear energy plants. Those electric power suppliers are the owners and operators of nuclear energy plants. Electric power suppliers manage entire construction projects, with construction work and manufacturing of equipment and facilities done by the companies that constructed the nuclear energy plants.

The financial resources for constructing nuclear power plants are procured by electric power suppliers, which are the implementing entities of construction projects. The methods of procuring funds are comparatively flexible, with sources including banking institutions, government financial institutions, stock markets, and internal reserves. The financial plan for constructing a nuclear energy plant requires an examination of the financial status of the applicant in procedures for obtaining permission to install reactors. Therefore, a situation in which a construction project for a nuclear power plant becomes financially stalled can be avoided.

Most electric power suppliers that generate nuclear power in Japan have their own electric distribution networks. Those distribution networks cover the whole country. Under the power generation and distribution management system of individual electric power suppliers, distribution networks ensure stable distribution by appropriately adjusting the amount of power generated in accordance with momentarily changing demand.

Electricity system reforms ensure the neutrality of power transmission and distribution sectors through legal unbundling.

As a technical requirement, electric power suppliers should choose locations for nuclear power plants that are less vulnerable to natural disasters with stable ground conditions and that are sufficiently remote from resident areas. In the procedures for obtaining permission to install reactors, site conditions are subject to safety reviews.

GOJ will enhance public relations activities based on scientific evidence and objective facts with regard to such matters as risks related to nuclear energy and impacts of accidents, regulatory requirements, and safety measures prepared after accidents, disaster management measures assuming severe accidents, problems related to spent fuels, economic efficiency of nuclear energy, and international trends. Carefully planned public hearings and public relations activities will be enhanced not only in regions with nuclear power plants but also in electricity-consuming regions that have until now received the benefits of power supply, through sincere dialogues with various stakeholders and reinforcing sharing information. In addition, GOJ will enhance education on nuclear power to improve the public’s understanding of nuclear power across generations.

Government responsibilities for R&D are shared between the Ministry of Education, Culture, Sports, Science and Technology (MEXT) and the Ministry of Economy, Trade and Industry (METI). MEXT is responsible for planning and administering nuclear energy for science and technology. MEXT plays a key role in many areas of nuclear research and development, including the nuclear fuel cycle, FBR, and accelerators. MEXT supervises the work of the Japan Atomic Energy Agency (JAEA), which was established in 2005. The Agency of Natural Resources and Energy (ANRE) carries out various activities, which include studies on improving reactor designs of Light Water Reactors (LWR) and approving design modifications proposed by utilities, and decommissioning.

In addition to LWRs for power production, Japan is actively developing other types of reactor, such as HTGRs and FBRs. Toshiba Corporation and the Tokyo Institute of Technology are developing a natural circulation, simplified LSBWR with passive safety systems and a long operating cycle: 100 - 300 MWe power capacity and 15-year core life.

HTGR is expected to be utilized in various industries including hydrogen production. Japan’s principal HTGR development programme is the R&D by using High-temperature Engineering Test Reactor (HTTR) of JAEA (former JAERI) at Oarai, Ibaraki Pref. The HTTR is a helium gas cooled reactor with 30 MWth. This reactor has been used to establish and upgrade technologies for advanced HTGR, and to demonstrate the effectiveness of selected high-temperature heat-utilization systems. The initial criticality of the HTTR was achieved in November 1998. The HTTR achieved full power operation of 30 MWth and a gas temperature of 950°C at the reactor outlet in April 2004. 50-day long-term high temperature operation at 950 °C to demonstrate that HTTR can supply high temperature heat for planned heat utilization systems in 2010 followed. Loss of focused cooling test was accomplished at power of 9 MWth in 2010 under the framework of the international joint research OECD/NEA LOFC project. The HTTR has not been operated since the Great East Japan Earthquake in March 2011 because all nuclear reactors in Japan were required to meet the new regulation standard. JAEA submitted the application of the HTTR to the NRA to confirm the adjustability to the new regulation standard on November 26, 2014. The review by the NRA is in progress. JAEA has also been working on R&D for hydrogen production system of Iodine Sulfur (IS) process. In February 2016, JAEA successfully achieved 8 hours of hydrogen production by using the continuous hydrogen production test facility made of industrial material. HTGR development was promoted in “Strategic Energy Plan”, which was decided by cabinet in 2014. On the basis of the Strategic Energy Plan, MEXT established the task force in the Nuclear Science Committee to develop future R&D plans of HTR in May 2014, and this task force developed interim report in September 2014.On the basis of the recommendation of the task force report, an industrial-academic-government forum for HTR in Japan was established aiming to discuss future HTR plan. The first meeting was held in April 2015 and the discussion is under way.

JAEA (former JNC) is conducting research and development (R&D) on FBRs and nuclear fuel reprocessing technology to establish an economical nuclear fuel cycle. The experimental fast reactor (Joyo) was operated from 1982 to 2000 with the MK-II core (100 MWth). Thereafter, the core and the cooling system were modified and attained initial criticality as the MK-III core (140 MWth) in July 2003. Irradiation tests for self-actuated shutdown system, MA-MOX fuel and ODS ferritic steel were conducted with the MK-III core. In 2007, an irradiation rig (MARICO-2) bent on an in-vessel storage rack. Whole restoration works, including retrieving MARICO-2 and exchanging upper core structure, finished in 2015. At present, JAEA is preparing for restart of Joyo. The prototype Monju Liquid Metal-cooled Fast Breeder Reactor (LMFBR) with a capacity of 280 MW reached initial criticality in April 1994, and was connected to the grid in August 1995. Reactor operation was interrupted in December 1995 due to a sodium leak in the non-radioactive secondary cooling system. After carrying out the cause investigation and the comprehensive safety review for two years and the necessary licensing procedure, JAEA completed a series of modification in order to reinforce countermeasures against potential sodium leak accidents. Monju was restarted in May, 2010 and the core confirmation test had been conducted until July 2010. However, In-Vessel Transfer Machine (IVTM) dropped down when hung up by the gripper of the auxiliary handling machine succeeding to the refueling in August, 2010. JAEA completed the withdrawal and restoration of IVTM by November 2011. But after the TEPCO’s Fukushima Daiichi accident in 2011, an order on measures for plant safety was issued by the NRA to suspend preparations for the pre-operational tests in the system startup tests due to the inadequate maintenance management in May 2013 and JAEA has continued to address the order. In parallel with the approach for restart of Monju by JAEA, the research plan of Monju was adopted by MEXT in September 2013. The research items of Monju are summarized as follows: 1) Compilation of outcomes of Fast Reactor (FR) development 2) Reduction of the amount and toxic level of radioactive waste 3) Safety enhancement of FR. In addition to these development activities, the "Feasibility Study on Commercialized Fast Breeder Reactor Cycle Systems" (FS) undertaken by JAEA with the co-operation of electric utilities and other interested parties had been carried out from 1999 to 2005 with the objective of presenting an optimal commercialization vision of FBR technologies and a research and development programme toward that end. Based on the conclusion of the FS and check & review by the government, the “Fast Reactor Cycle Technology Development” (FaCT) was launched as an advanced stage toward commercialization of FR cycle technology in 2006. But the FaCT has been suspended due to the TEPCO’s Fukushima Daiichi accident which occurred on March 11, 2011. In accordance with “Strategic Energy Plan”, R&Ds for the reduction of waste volume and radio-toxicity and safety enhancement optimizing the use of international co-operation are being conducted by JAEA utilizing Monju.

Implementation of Nuclear Safety and Research and Development through International Co-operation:

• Activities with IAEA: Japan has contributed to developing and revising IAEA nuclear safety standards by dispatching experts to CSS, NUSSC, WASSC, RASSC, TRANSSC, and EPReSC. Regarding the “Convention on Nuclear Safety” and “Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management,” Japan dispatched experts from the draft planning stage. Japan has also participated in review activities after the submission of National Reports. Promotion of peaceful uses for nuclear energy (safety-related co-operation, technical aid to developing countries and R&D), and provision of safeguards to ensure that nuclear activities are not converted for military applications. Japan participates positively in International Nuclear Safety Advisory group (INSAG), Assessment of Safety Significant Event Team (ASSET), Operational Safety Review Team (OSART), and special studies to evaluate the safety of reactors in the former USSR. Japan has annually made an Extra-budgetary Contribution to the IAEA for: 1) the Expanded Programme of Public Understanding of Nuclear Energy (EPPUNE), 2) the development of national infrastructure for nuclear power plants, 3) the decommissioning of Fukushima Daiichi Nuclear Power Station, and 4) Nuclear Knowledge Management.

• Activities with OECD/NEA: The purpose is to provide useful information to member countries through technological studies and mutual co-operation on common problems in using nuclear energy in advanced countries. Japan participates actively in Committee on Nuclear Regulatory Activities (CNRA), Committee on the Safety of Nuclear Installations (CSNI), Radioactive Waste Management Committee (RWMC), Nuclear Science Committee (NSC), Committee on Radiation Protection and Public Health (CRPPH), Nuclear Law Committee (NLC), Data Bank (DB), and Committee for Technical and Economic Studies on Nuclear Energy Development and the Fuel Cycle (NDC).

• Japan has participated in multilateral co-operation frameworks and projects such as the Generation IV International Forum (GIF), the Multinational Design Evaluation Programme (MDEP) and the International Framework for Nuclear Energy Cooperation (IFNEC).

The use of nuclear power as energy is under the jurisdiction of Ministry of Economy, Trade and Industry in Japan. Regarding nuclear safety regulations, the Nuclear Regulation Authority was established as an external organ of the Ministry of the Environment in September 2012. [See also 2.1.1.]

The processes for approval of or permission for nuclear power plants in Japan are as follows:

• Review if the facilities conform to regulatory requirement by commissioners and safety review officers of the NRA.

• Review meetings open to the public.

• On-site investigations.

• Opinion hearing on the permission.

• Requesting the Atomic Energy Commission and the Minister of METI for their official comments based on the Reactor Regulation Act.

• Public Comments on the “draft review report” from scientific and technical perspectives.

• Installation permit/amendment of permit.

• The NRA finalizes the review results based on the opinions, etc., and makes the decision.