Japan thinks of itself as famously poor in energy, but this national identity rests on a semantic confusion. Japan is indeed poor in fossil fuels — but among all major industrial countries, it’s the richest in renewable energy like sun, wind, and geothermal. For example, Japan has nine times Germany’s renewable energy resources. Yet Japan makes about nine times less of its electricity from renewables (excluding hydropower) than Germany does.
That’s not because Japan has inferior engineers or weaker industries, but only because Japan’s government allows its powerful allies — regional utility monopolies — to protect their profits by blocking competitors. Since there’s no mandatory wholesale power market, only about 1 percent of power is traded, and utilities own almost all the wires and power plants and hence can decide whom they will allow to compete against their own assets, the vibrant independent power sector has only a 2.3 percent market share; under real competition it would take most of the rest. These conditions have caused an extraordinary divergence between Japan’s and Germany’s electricity outcomes.
Before the March 2011 Fukushima disaster, both Germany and Japan were nearly 30 percent nuclear-powered. In the next four months, Germany restored, and sped up by a year, the nuclear phaseout schedule originally agreed with industry in 2001–02. With the concurrence of all political parties, 41 percent of Germany’s nuclear power capacity — eight units of 17, including five similar to those at Fukushima and seven from the 1970s — got promptly shut down, with the rest to follow during 2015–22.
In 2010, those eight units produced 22.8 percent of Germany’s electricity. Yet a comprehensive package of seven other laws passed at the same time coordinated efficiency, renewable, and other initiatives to ensure reliable and low-carbon energy supplies throughout and long after the phaseout. The German nuclear shutdown, though executed decisively, built on a longstanding deliberative policy evolution consistent with the nuclear construction halts or operating phaseouts adopted in seven other nearby countries both before and after Fukushima.
Moreover, the Energiewende term and concept began before 1980, and Germany’s formal shift to renewables — now well over 70 billion watts installed — began in 1991, 20 years before Fukushima, then was reinforced in 2000 by feed-in tariffs. Those aren’t a subsidy but a way for customers to buy, and hence developers to finance and build, the renewables society chose, with a reasonable chance for sellers to earn a fair return on their investments. FITs’ values have plummeted in step with renewable costs, so developers now commonly opt to earn higher market prices instead.
This integrated policy framework and the solid analysis behind it meant that the output lost when those eight reactors closed in 2011 was entirely replaced in the same year — 59 percent by the 2011 growth of renewables, 6 percent by more-efficient use, and 36 percent by temporarily reduced electricity exports. Through 2012, Germany’s loss of 2010 nuclear output was 94 percent offset by renewable growth; through 2013, 108 percent. At this rate, renewable growth would replace Germany’s entire pre-Fukushima nuclear output by 2016.
Contrary to widespread misreportage, closing those eight reactors did not cause more fossil fuel to be burned. Whenever renewable sources run in Germany, both law and economics require them to displace costlier sources, so renewables always make fossil-fueled plants run less, though often in more complex patterns. The data confirm this: from 2010 through 2013, German nuclear output fell by 43.3 TWh, renewable output rose by 46.9 TWh, and the power sector burned almost exactly as much more coal and lignite as it burned less of the costlier gas and oil. German utilities bet against the energy transition and lost. Now they gripe that the renewables in which most of them long underinvested have made their thermal plants too costly to run.
Despite those big utilities’ self-inflicted woes, Germany adopted a coherent and effective strategy of boosting efficiency and renewables and ensuring their full and fair competition. In contrast, Japan replaced its own, larger lost nuclear generation almost entirely by increasing its imports of costly fossil fuels. These opposite policies produced opposite results.
Japanese people sweltered through the summer of 2011 with impressive cohesion but inadequate electricity and much personal sacrifice. Spurred by Metropolitan Government policies, T?ky? peak demand fell by 10.7 billion watts or 18 percent (for big businesses, a remarkable 30 percent), roughly displacing TEPCO’s lost peak nuclear output. Across the metro area, TEPCO’s electricity sales fell 11 percent. But that was not true for Japan as a whole, so power plants’ fuel use soared. In contrast, Germany’s electricity supply remained so ample that it continued to export more electricity than it imported, even to nuclear-powered France. Germany’s net power exports have set new records in each of the past two years.
Japan’s economy wilted while Germany’s throve, adding several hundred thousand clean-energy jobs—part of the energy transition’s net macroeconomic benefit. Japan’s electricity prices soared while Germany’s wholesale electricity prices fell more than 60 percent — including 13 percent in 2013 alone, when year-ahead prices hit eight-year lows. That’s why French energy-intensive industries complain that they can’t beat their German competitors’ one-fourth-lower power prices. The latest manufactured myth of German “deindustrialization” is ironic because big German industries pay approximately those low and falling wholesale prices and are exempted from paying for the renewables that cause them, as well as from grid charges. Those burdens were instead heaped on households (whose bills are half taxes), though household tariffs have now stabilized as providers’ old contracts roll over.