Fast Market Research recommends "Japan Power Report 2014" from Business Monitor International, now available

Boston, MA -- (ReleaseWire) -- 06/03/2014 --Japan will ultimately restart 40-50% of its nuclear reactors so as to reduce the cost of fuel imports, which have been exacerbated by the weak yen and pushed Japan to register a record trade deficit in 2013. We anticipate LNG imports will remain elevated - as gas-fired generation fills the void left by nuclear facilities that are closed permanently. Coal has also been championed by the government in its April 2014 Basic Energy Plan and looks set to play a role as an important source of baseload capacity.

At the time of writing all 50 of Japan's nuclear reactors are offline. This gaping hole in Japan's electricity generation is being filled by thermal sources (oil, natural gas and coal) and this has led to soaring electricity prices, which in turn are placing significant cost pressures on Japan's consumers, manufacturers and exporters, and risk undermining the effects of 'Abe-nomics'. With the country recording a record trade deficit in 2013 as utilities continued to rely on expensive imported fuels at a time when aggressive quantitative easing had weakened the yen, Prime Minister Shenzo Abe is extremely keen to restart nuclear reactors.

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In spite of strong popular opposition, we anticipate the financial burden will prompt two nuclear re-starts in 2014, assuming that: a) reactors pass the NRA safety inspections, b) the Fukushima clean-up proceeds without complications that would encourage further public opposition, c) pressurised water reactors (assumed to be safer) are prioritised for re-start over boiling water reactors.

The outlook post-2016 is purely speculative at this point as the 2016 election will be a wildcard for energy/ nuclear policy. However, in terms of our base-case scenario, we are operating under the assumption that two to three reactors will come online per year from 2015. Not all reactors will restart; we forecast about 40-50% of total capacity will eventually come back online. This will taper demand for oil-fired electricity generation in particular.

Critical developments in Japan's power sector include:

- On April 11 2014, the Cabinet of Japan approved the country's fourth Basic Energy Plan - the first longterm energy policy to be approved since the Fukushima disaster in 2011. In the new policy document, the Ministry of Economy, Trade and Industry (METI) states that nuclear energy is 'a quasi-domestic source that gives stable power, operates inexpensively and has a low greenhouse gas profile'.

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