Japan to have up to nine nuclear reactors operational by winter: PM

Japanese Prime Minister Fumio Kishida said July 14 he wanted up to nine nuclear reactors to be operational by this winter and secure capacity from 10 additional thermal power plants to ensure sufficient generating capacity, given the severe supply and demand outlook.

"For this winter, I have directed [Minister of Economy, Trade and Industry Koichi Hagiuda] to proceed with the operation of up to nine nuclear reactors, which are equivalent to roughly 10% of Japan's total electricity consumption volumes," Kishida said at a news conference.

Hagiuda has also been asked to secure capacity from 10 additional thermal power plants to ensure sufficient capacity for peak demand, Kishida said.

"Once accomplished [operations], we will have the highest [power] supply capacity in the last three years," Kishida said. "As per the government's responsibility, we will make every effort to ensure stable power supply for this winter as well as in the future by considering various measures."

The rare directive from the Japanese premier to ensure power supply came after METI had already heightened concern over potential LNG supply disruptions after Russia June 30 issued a decree involving an operatorship shake-up of the Sakhalin 2 LNG project.

Over half of the 9.6 million mt/year LNG production capacity at the Sakhalin 2 project at Yuzhno-Sakhalinsk in Russia, in which Japan's Mitsui has a 12.5% stake and Mitsubishi 10%, is committed to Japanese offtakers.

Russia accounted for 9% of Japan's total LNG imports of 74.32 million mt in 2021, its fifth-largest supplier, according to data from Japan's Ministry of Finance.

Supply concerns

Japan had said June 7 there was a risk of Russian LNG supply disruption rising to an unprecedented level, strengthening its tone on a potential fuel procurement risk for power generation amid an intensifying competition for fuel as Europe steps up efforts to reduce its dependency on Russian energy.

The fuel procurement risk was noted as part of a package of actions approved at a ministerial-level meeting earlier in the day, aiming to ensure the country's extremely severe summer and winter power supply and demand balance.

Speaking after the meeting which took place for the first time in five years, Hagiuda then said the Tokyo to Kyushu areas were not securing a level required to ensure stable power supply this winter, with the Tokyo area having a negative reserve ratio.

In response to the fuel procurement risk and an increasing trend of seeing more-than-expected power demand during the peak demand seasons, Japan decided a series of actions, including restarting mothballed power plants, undertaking additional fuel procurements and utilizing renewables and nuclear power, Hagiuda said.

All of Japan's 10 power supply areas are required to have a minimum 3% reserve power supply capacity ratio over demand levels of 10-year highs during the peak demand months.