The new Japanese Prime Minister's energy policies puts nuclear power at the heart of their policy

Sanae Takaichi, the new Japanese prime minister, is expected to press for a rapid revival of nuclear energy to combat inflation, which has been a major source of discontent amongst the public. Reactor restarts are also key to reducing expensive fuel imports.

Analysts said that Takaichi appointed Ryosei Acazawa as its trade and industry minister, a position which includes energy. This appointment signals a willingness to engage Washington, especially on the purchase of liquefied gas, they added.

The report on Wednesday said that her government is planning to purchase a number of items to be presented to U.S. president Donald Trump when he visits Tokyo next week. This includes LNG, but not the pipeline from Alaska, which Trump has championed.

Akazawa, however, said that on Wednesday it is essential to maximize power sources that contribute towards energy security and decarbonisation.

He said: "We intend to restart nuclear power plants while taking concrete measures to gain the understanding of local stakeholders and communities."

Last year, Japan spent 10,7 trillion yen (71 billion dollars) on coal and LNG imports. This is a tenth its total import cost. Imported fossil fuels account for 60% to 70% or Japan's electricity production and have been a major source of inflation, which has hurt the Liberal Democratic Party.

RENEWAL OF NUCLEAR RENEWAL

"PM Takaichi is almost certain to push for an ambitious nuclear reactor restart." Henning Gloystein is the managing director of Eurasia Group, a consultancy.

Japan had 54 nuclear reactors before the Fukushima catastrophe of 2011. Fourteen of the 33 reactors that are still operational have been restarted, a lengthy process. As data centres expand, it is becoming more urgent to secure a stable power supply.

Takaichi is a proponent of nuclear energy and next-generation fusion power. He has also expressed support for perovskite cells, technologies that Japan could potentially export, and opposed massive solar project due to their reliance on imported panels from China and environmental impact.

Industry insiders claim that large-scale renewables, including offshore wind, which have already been affected by Mitsubishi's withdrawal from the market, could receive less political support.

An industry source who is involved in discussions about offshore wind policy said that "Takaichi... will not provide much support to the industry in the long run, as she favors nuclear restarts."

ENERGY DIVERSIFICATION

Scott Bessent, U.S. Treasury secretary, has urged Tokyo, ahead of Trump's trip to Japan, to stop purchasing Russian energy. This energy is mainly LNG, and accounts for 9% Japan's fuel imports.

Japan, while minimizing political pressures, signed new U.S. LNG purchases this year, but did not make any firm commitments regarding the $44 billion Alaska LNG project that has yet to be built, as part of the bilateral trade agreement negotiated between Akazawa and the U.S.

A high-ranking source from a Japanese utility company said that "his ability to maintain dialog with the U.S. Government, including on energy issues, is a good factor."

Tom O'Sullivan of Mathyos Global Advisory, a Tokyo-based director, explained that Akazawa is a 64-year old English-speaker who understands the value of affordable energy.

He said that there was also international pressure for Japan to stop purchasing Sakhalin LNG, which would also increase pressure to speed up the restart of nuclear power plants.

Analysts have stated that the majority of Sakhalin-2 LNG contracts will expire between 2028-2033. Any earlier termination could result in penalties for Japanese buyers.

(source: Reuters)