Okinawa's nuclear-free power attracts people, companies

Okinawa Prefecture has the highest electricity rates in Japan and could be considered the nation’s worst offender in terms of fossil fuels burned for power. But it is this very power generation system that’s attracting people and companies to the southernmost prefecture.

A woman who decided to move from Kawasaki to Okinawa summed up the reason: "There's no nuclear power here."

Spooked by the accident at the Fukushima No. 1 nuclear power plant, Sheila Morikawa says the absence of nuclear plants in Okinawa Prefecture makes her feel safe. For companies, the big draw is a stable power supply, which eliminates the threat of disruptions in production or lost data caused by power outages.

Morikawa, a 37-year-old homemaker living in Okinawa city on the prefecture’s main island, pays about 5,000 yen a month for electricity, a bit more than what she paid in Kawasaki.

In March last year, Morikawa traveled to Okinawa for a friend's wedding. A week later, the Great East Japan Earthquake struck, leading to the nuclear accident at the Fukushima plant.

She decided to stay at her family's home also in Okinawa city, fearing the effects of the radiation on her two sons, aged 1 and 4 at the time.

Morikawa's unease grew as she watched the government and Tokyo Electric Power Co. respond to the Fukushima disaster. After talking it over with her husband, they decided to settle down in Okinawa early this year.

While the nuclear-free policy makes Okinawa safe, household electric rates here are the highest in Japan.

The average electric bill in August is 7,007 yen for a typical household that uses 300 kilowatt-hours at six regional utilities on Japan's main islands. But it costs an average 8,070 yen in August to buy the same volume of power from Okinawa Electric Power Co. (OEPC).

Although demand for electricity is rising, Morikawa says, "I never want these islands to have anything to do with nuclear power or radiation."

The business world is also starting to rethink the value of being "nuclear-free."

First Riding Technology Inc., which runs a data storage center in the city of Urasoe in Okinawa Prefecture, found itself inundated with inquiries from companies and government offices after the Great East Japan Earthquake. They wanted to know if Okinawa’s power surplus eliminates the risk of data being lost.

"A condition set by a lot of companies was 'no nuclear power plants within a hundred-kilometer radius,'" says the president, Inekazu Uehara.

In the month after the earthquake, Tokyo Keiso Co., a maker of measuring instruments, decided to open a factory in Okinawa mainly because of the stable electricity supply.

Four thermal power stations face Kin Bay on the east coast of Okinawa's main island, hemmed in by ocean waters lined with coral reefs. With a combined output of 1.42 gigawatts, the power stations produce 90 percent of the main island's power.

One nuclear power plant could do the same job.

However, an OEPC spokesman says: "If we did produce power with a single nuclear power plant, an accident would mean a blackout for the entire island."

The idea of building a nuclear plant in Okinawa had long been considered ludicrous.

U.S. military bases take up 20 percent of the land on the main island, and the prefecture has no suitable sites for a plant and relatively low electricity demand.

After its privatization, OEPC followed the lead of the mainland utilities by joining the Federation of Electric Power Companies of Japan in 2000. It listed its shares on the First Section of the Tokyo Stock Exchange in 2002.

In 2004, the OEPC chairman was Hirokazu Nakaima, Okinawa's current governor and once an employee of the former Ministry of International Trade and Industry.

The company drew attention for putting "research into small nuclear reactors" in an administrative document as the mainland was in the midst of partially liberalizing the market to bring electric rates "down to international standards."

But currently, there are no realistic efforts to introduce nuclear energy to Okinawa Prefecture as the Fukushima accident showed that nuclear energy is no guarantee for lower rates.

In fiscal 2010, the price of OEPC electricity (electric bill revenues divided by sales volume) was 19.9 yen per kilowatt-hour, 4.04 yen higher than on the mainland. This higher rate is due more to geographic features than how the utility generates power.

OEPC provides electricity over an area spanning roughly 1,000 kilometers from east to west. The prefecture's 37 isolated islands receive drums of fuel oil to produce power at small facilities, which makes the cost of generation 1.72 times higher than on the main island. This cost is shared across the entire prefecture, making rates about 6 percent higher than they would be if Okinawa had no isolated islands.

If Okinawa did not have to deal with the unique factors that push up the cost of power generation, rates would drop to 17 yen or so, less than 2 yen above other utilities.

Since the Fukushima nuclear accident, mainland power companies operating nuclear power plants are growing increasingly concerned about costs associated with post-accident cleanups, reactor decommissioning and other related projects. If these expenses are incorporated into customers' electric bills, nuclear energy will no longer be a low-cost solution, and OEPC's rates won't seem so much higher.

Of course, OEPC has its own issue to deal with: cutting greenhouse gas emissions.

OEPC produces more than 0.9 kilogram of carbon dioxide (CO2) per kilowatt-hour of electricity generated, more than twice the national average. The company mainly relies on fossil fuels because it produces no nuclear or hydroelectric power.

OEPC is trying to improve the situation by building power stations fueled by liquefied natural gas (LNG), which emits around 40 percent the CO2 that coal does. The company plans to install equipment to generate 500 megawatts by the next fiscal year, enough to produce 30 percent of OEPC's total.

An experiment is under way at Miyakojima and three other isolated islands to produce between 7 and 22 percent of their electricity with solar power. Although the project will have little effect on power generation for the prefecture as a whole, an OEPC spokesman states, "If we can manage a stable (power supply), then it could lead to the widespread introduction (of this system) on the main island."