What Japan's electricity tells us about Europe

Since the Fukushima disaster, Japan has avoided nuclear power; all 54 of the country's nuclear reactors are currently closed with no immediate plans for reopening. Nuclear power used to generate about 30% of all electricity in Japan, while another 60% is provided by a mixture of coal, LNG and oil.

So what happens when a country loses 30% of its electricity generation capacity? The evidence from Japan, so far, is not much.

There has been some rationing in some areas; businesses routinely turn off lights at night and sweaty office workers are perhaps more common than they used to be as offices avow air conditioning. But the obvious disasters predicted – widespread blackouts, critical power failures and pitch black cities – have been avoided.

How has Japan managed to avoid painful shortages? It's something the RBA has recently pondered, and they provide some interesting data showing that nuclear power has been substituted by hydrocarbons. Japan is importing much more LNG, coal and oil and its running thermal power plants much harder. The RBA notes that average utilisation of thermal plants has historically been around 40%. More recently, that has spiked to about 70%.

Source: RBA

Generation capacity that was used as peaking power is now used to generate baseload. This makes power pricier, but higher prices during a supply shock is no bad thing. The actions of Japanese utilities has been heavily criticised, but they have done their job.

There is a wider point to be made; systems are adaptable. Even when the worst happens and disaster seems inevitable, changing behaviour can alter outcomes. I can't help wondering whether the disaster predicted in Europe by so many might follow a similar path. Expectations for the worst may just prompt actions needed to avert the worst case scenario.