Why Will Japan Continue to Experience Power Shortages?

The EIA reported Japan had 281 gigawatts (GW) of installed electrical generation capacity as of 2008. A total 12 GW of that went offline due to automatic shutdowns (i.e. nuclear reactors shut off as a precaution whenever a major tremor is detected) or structural damage (i.e. damage to Fukushima Daiichi nuclear reactor plus a few thermal power plants), leaving  269 GW of generation capacity. Transmission losses are normally 5% of the total electricity generated, which effectively leaves 256 GW of electricity available to customers. Given that national electricity demand peaks at a pre-recession level of 175.2 GW as of FY2008 according to FEPCO , Japan has plenty of generation capacity to spare. Yet, rolling blackouts continue to roil Japan (except on weekends due to voluntary electricity conservation) because of inadequate capacity to transmit and transform electricity.

First, earthquake/tsunami damage to the electricity distribution infrastructure in northeastern Japan – such as power lines, transformers, switching stations, conversion stations and substations – prevents the transmission of electricity from TEPCO and Tohoku Electric’s power plants to their service areas in the eastern half of Japan. TEPCO’s service area encompasses these prefectures: Ibaraki, Tochigi, Gunma, Saitama, Yamanashi, Tokyo, Kanagawa, Chiba. Tohoku Electric’s service area encompasses these prefectures: Aomori, Iwate, Akita, Miyagi, Yamagata, Fukushima, Niigata.

Second, the power grid on Japan’s main and largest island, Honshu, is split into two regions differentiated by frequency standards and the two halves cannot easily share electricity. The southern power plants (operated by Chubu Electric, Hokuriku Electric, Kansai Electric, Chugoku Electric) supply electricity to the western half of Japan (which includes Osaka, Kyoto, Nagoya) at 60Hz. The northern power plants (operated by Tohoku Electric and TEPCO) supply electricity to the eastern half of Japan (which includes Tokyo, Sendai, Kawasaki) at 50Hz. The southern plants were not affected by the earthquake/tsunami but they cannot deliver enough electricity in the right frequency to the western half of Japan because the transformers that connect the southern and northern power grids have a total capacity of 1 GW, meaning they can only convert electricity from one frequency to another 1 GW at a time.

Third, TEPCO and Tohoku Electric’s surviving generation capacities cannot keep up with cyclical demand surges in their service areas. Peak demand hits in the summer, particularly July around 2-3pm, when the Japanese turn on their air conditioners. TEPCO’s remaining 33.5 GW capacity is not enough to meet its summer peak load, which reached as much as 54 GW in FY2009 during the recession and 61 GW in FY2007 before the recession. Tohoku Electric’s capacity is 21.25 GW. According to Credit Suisse, 30% of its capacity was wiped out by the earthquake/tsunami, leaving only 14 GW of capacity. Tohoku’s peak load was 14 GW in FY2009, 15 GW in FY2007, although the peak load may be lower now due to the loss of many homes and businesses in the Tohoku region. Hence Tohoku seems better positioned than TEPCO in meeting peak demand but, again, there may be transmission problems that prevent electricity from getting to customers.

Fourth, it will take some time to ramp up electricity production at non-nuclear power plants due to lags in distributing fuel to power plants in areas where many roads, bridges, ports, railways and airports were destroyed or clogged with debris from the earthquake/tsunami. As of March 21, the National Police Agency had counted 1703 roads, 51 bridges and 15 railways damaged by the March 11 earthquake/tsunami.

Takeaway Point:

In short, the electricity shortage in Japan is more about distribution capacity than about generation capacity.

For information on how the earthquake will change Japan’s fuel mix, check out RGE Analysis, “Meeting Energy Demand After the Quake: LNG vs. Oil vs. Coal” available exclusively to RGE clients.

References:

TEPCO – http://www.tepco.co.jp/en/corpinfo/overview/facts-e.html

Tohoku Electric – http://www.tohoku-epco.co.jp/ir/fact-e.htm