Monday, July 25, 2011

Nuclear Energy and Heat, Solar Energy and Japan

solar_panel_japan_103 CBS News finds a new hook for their look at nuclear energy:

Temperatures began going down Sunday in the eastern half of the country, dropping from last week's record triple-digits and easing a heat wave blamed for at least 34 deaths.

Boy, it didn’t feel that way from here, but okay. In any event, the question of where to get more electricity as everyone switches on their air conditioners becomes crystal clear.

Demand was said to be ten percent higher than the average for July, and with demand only growing, going nuclear is getting another look.

The story doesn’t really get into why this should be so and tries to be even handed, not always to its benefit, but it makes a strong point: that if demand for more electricity increases – and it will – then nuclear energy is an excellent way to feed that demand.

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The Wall Street Journal talks to Sharp Corp. President Mikio Katayama:

WSJ: Is it necessary for Japan to gradually move away from nuclear power?

Mr. Katayama: It would be too simplistic to say nuclear power is good or bad. There's no doubt that people are starting to question nuclear power's safety and security. Nobody would say "please build a nuclear plant next to my house." The actual cost of nuclear power may be different from previously estimated. Still, under the current system, using an alternative power source would be more costly.

Safety may be the most salient issue for people living relatively close to a nuclear plant, but it may not be so for those who are relatively distant. Wealthy people may not mind paying a bit more for electricity, while others may find it painful. Among businesses, manufacturers that consume a large amount of power and service industries that don't require much power may have different perspectives. The question is how to find a way to design a compromise plan and agree on it. That's what political leaders need to work on.

You might think, well, that’s okay, not great. But it seems strikingly honest given this reality:

Sharp could benefit from the new [Japanese government] policies, which would require utilities to buy up electricity that comes from renewable sources. The company is Japan's largest supplier of solar panels, which accounted for about 9% of Sharp's overall revenue of ¥3.02 trillion (US$38.57 billion) in the last fiscal year.

And that’s important because the government will create a marketplace for people who buy solar panels for their homes. That could spur a lot of business for Sharp.

But:

WSJ: How does Sharp compete against Chinese solar-panel makers?

Mr. Katayama: Solar power, or any other energy, is in the realm of government policies. It would be a huge mistake to think that the cost of solar power is determined by competition among private companies. Governments get involved in all sorts of ways, like feed-in-tariffs or other subsidies for construction of facilities.

Katayama is quite frank that the free market itself cannot push solar energy over the hump of broad acceptance – which is necessary to make the cost of its electricity competitive. So government, having determined that solar energy helps fulfill a public policy goal, provides a push.

But that’s all solar energy inside-baseball stuff. What’s interesting is that a solar energy entrepreneur recognizes the plain difficulty of building a market and providing electricity comparable in price to nuclear energy.

I think Katayama has more government support that he lets on – the Japanese government wants to compete with China in photovoltaics and wants home-sited solar installations, both of which will redound profitably to Sharp.

(Consider this story: “Japan is considering a plan that would make it compulsory for all new buildings and houses to come fitted with solar panels by 2030, a business daily said Sunday.”)

Still – nuclear energy doesn’t seem at all ready to cede its position as the more affordable source of electricity.

In Hakone prefecture. Not exactly NIMBY, but the panels really do mar the look of nice architecture – if they’re visible - which may discourage their adoption in some instances. If the government plan goes through, it’ll be interesting to see how the new buildings accommodate the panels.

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