Japan’s Tokyo Electric Power Company (TEPCO) announced plans to partially restart the Kashiwazaki-Kariwa Nuclear Power Plant, the world’s largest nuclear facility, on January 20. This development comes as Japan faces increasing pressure to diversify its energy sources amid rising global energy demands and geopolitical tensions.
TEPCO, Japan’s largest utility and operator of the Kashiwazaki-Kariwa plant, has been toiling mightily to get the world’s largest nuclear plant back in operation. Since the Fukushima disaster in 2011, the reactor has largely remained shuttered. Beyond Murayama, its planned restart most likely foreshadows an inflection point in Japan’s strategy for power generation, of which nuclear energy is about to become an indispensable element.
Japan, on the other hand, is embracing a nuclear revival. Yet at the same time it intends to greatly increase its liquefied natural gas (LNG) imports from North America. Worryingly, projections indicate that these imports could triple by 2030. This worrying trend is indicative of Japan’s growing reliance on natural gas to meet its energy needs. Japanese conglomerates are making hugely ambitious bets on synthetic gas projects across the United States. This strategy greatly increases their control over the North American energy landscape.
Now Japan’s most powerful trading company, Mitsui, is moving to increase Australian LNG. This is their first collaborative new project in five years! Australia is the second largest player in the emerging global LNG market. Mitsui’s investment highlights Japan’s desire to establish a more stable energy supply from around the world.
Even as Japan turns its attention to LNG, the larger market for oil has experienced some major ups and downs. Today, Iran’s oil exports have shot up to a seven-year high, in spite of unrelenting U.S. sanctions intended to drive its oil trade into the ground. This increase poses challenges for Japan, which has historically relied on Iranian oil but must now navigate the complexities of international sanctions.
Kazakhstan’s oil-based economy has suffered several blows. These problems arise from all drone strikes against Russian assets throughout Ukraine. Such geopolitical events can have far-reaching implications for global oil supply chains and prices, deepening Japan’s energy woes.
Japanese utilities, meanwhile, are facing increasing pressure to stop importing Russian LNG as a U.S. waiver runs out. This scenario propels Japan to quickly search for other energy resources. Simultaneously, it needs to maintain reliability in its electric generation fleet.
Japanese manufacturing firms are starting to make headway in large-scale renewable energy development, especially in hydrogen production. As part of this initiative, they are reanalyzing Australian hydrogen projects, announcing their commitment to sustainable energy solutions.