Japan’s Rolling Blackouts Dim Prospects for Recovery

Japan Business

The energy drought is being felt most severely not in the relatively rural Tohoku region, where the tsunami did its greatest damage, but in Kanto just to the south of it. It’s the nation’s most populous region, with Tokyo at its heart, and the six now-infamous reactors of Fukushima Dai-Ichi generated a little under a tenth of its energy. Tokyo Electric Power has put most of the Kanto region under a schedule of rolling blackouts. When people turn on their air conditioners come summer—a season that usually taxes the region’s power grid—the gap between electricity demand and supply is only going to widen. Dealing with that won’t be easy: Japan is already among the world’s most energy-efficient countries.

Uncertainty worsens the situation. Some days, Tepco has enough power to meet demand; other times it schedules blackouts on extremely short notice. Affected companies are still figuring out how to respond, but the longer the situation continues, the greater the consequences. Analysts at Barclays Capital (BCS) estimate that planned blackouts and other energy conservation measures will end up shrinking Japanese manufacturing gross domestic product by $60 billion in 2011. “Right now, it’s situation by situation,” says Tadashi Hisanaga, a spokesman for Hitachi (HIT). Much of the electronics giant’s production facilities are located near Japan’s east coast, in regions just north enough to have been hit by the earthquake and just south enough to depend on Tepco for electricity. As Hitachi repairs the damage from the earthquake, power is becoming the bigger problem. “It’s something we’re going to be thinking about for a long time,” he says.

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admin    Business     Air Conditioners, Barclays, Barclays Capital, Bcs, Demand And Supply, Dim Prospects, Drought, Electricity Demand, Energy Conservation Measures, Gross Domestic Product, Japan Business, Kanto, Kanto Region, Populous Region, Power Grid, Reactors, Rolling Blackouts, Tohoku, Tohoku Region, Tokyo Electric