What Price Energy Post Fukushima?
Utility Business Columnist Dr Michael Pollitt (Assistant Director of EPRG, Reader in Business Economics at the Judge Business School, University of Cambridge and Director of Studies in Economics and Management at Sidney Sussex College, Cambridge) explores the implications of the Japanese earthquake on European energy markets and policy.
Along with other researchers Dr Bill Nuttall, Dr David Reiner and Dr Pierre Noël, they examine the impact on nuclear policy in the short and longer term and the implications of an extended period of high oil prices.
In the new podcast Dr Pollitt, says that as Tepco (Tokyo Electric Power Company) battles to decommission its four damaged reactors at Fukushima, the world watches to see how global energy prices will respond, particularly the demand for oil, gas and renewables. Dr Pollitt says liberalising the power market and reducing the demand for energy should become even more important post-Japan:
“The structure of the Japanese nuclear industry is based on regional monopolies which supply their own customers in their own areas with limited interaction between the rest of Japan. Japan itself is split into two grids, which are only weakly connected. You can’t get much electricity from the West into the East where Tokyo is. This is a result of not liberalising the market as much as we have done in the UK and Europe.
“I think what we can observe is that it is impossible to predict what will happen in energy markets. This is why they need to be as global as possible to provide the sort of energy security that Japan now requires. I would venture one prediction and that is that it will cause a redoubling of our efforts on demand-side management and demand reduction, which both reduce our energy requirements and our carbon emissions. If our technical options become more restricted on the supply side, it pushes us back to demand side interventions.”
This will be the subject of Dr Michael Pollitt’s forthcoming column in the Summer edition of Utility Business – coming soon….
