In 2022, as Russia began its aggression against Ukraine, global energy prices skyrocketed, with prices parabolic.
Japan, a natural resource-poor nation – is heavily reliant on LNG from Australia (40% of supply), Malaysia, Qatar, the US and (now) formally Russia.
With sanctions biting, and prices surging, Japan was forced to consider bringing back nuclear power as soon as possible.
The nation had shuttered dozens of reactors since the 2011 Fukushima disaster and nuclear became a politically difficult proposition.
Now, times have drastically changed – with energy costs skyrocketing and Japan committed to NetZero – the economic powerhouse has turned to its fleet of nuclear power once again.
The country has fired up idled reactors this year and more are set to come online in the next few years.
The moves appear to have put downward pressure on LNG demand.
According to Bloomberg Energy reporter Stephen Stapczynski, gas inventories have dropped to levels not seen since before the Russian-Ukraine war.
“Japan’s higher nuclear output is reducing the need for LNG,” he said.
“So that might be one explanation why utilities – primarily western ones – aren’t rushing to refill stockpiles,” Stapczynski reported.
Japan's falling LNG stockpiles may prompt more purchases ahead of winter🇯🇵🚢
— Stephen Stapczynski (@SStapczynski) September 20, 2023
📉 Gas inventories held by utilities dropped to the lowest level since March 2022
🌡️ Lingering hot weather has added to pressure on energy supplyhttps://t.co/tp3x1uOhG7 pic.twitter.com/mIcZFDKhtP
According to nuclearsupplychain.com one nuclear reactor restart decreases total fossil fuel costs by 60 billion Japanese Yen annually.
The use of nuclear also decreases CO2 emissions by 4 million tonnes and reduces average electricity unit costs by 1.8%, they said.
In 2011, Japan generated 30% of electricity from nuclear power, before setting up plants.
However, with nuclear restarts and possible new builds, this is set to lift to 22% by 2030 and beyond in later years.
The original plan was for 50% nuclear by 2030 before the Fukushima crisis.
This is a major factor why uranium prices tanked since 2011, and only now have prices recovered to 12-year highs.
