More Thoughts on the Hokkaido BlackoutCan the Lessons Learned be Applied?

Hiroshi Takahashi, Professor, Tsuru University

22 October 2018

in Japanese

The large-scale power outage, i.e., blackout, that occurred throughout Hokkaido on 6 September 2018, attracted concern nationwide and prompted all sorts of discussion through the mass media. I wrote a column published on 7 September which evoked a tremendous reaction, and was asked for my opinion from people in diverse fields. Now that about one month has passed since the blackout and the facts have become fairly clear, I would once again like to summarize the discussion over the intervening period and relate my views.

A Lively Discussion Over the Blackout

First of all, I would like to note the great significance of the fact that there was a diverse discussion taking up issues over a wide scope. Although the blackout per se brought all sorts of inconveniences, it was resolved in a relatively short time. While some praised the handling by Hokkaido Electric Power Co., Inc., others criticized it. Similarly, some pointed out the vulnerability of the centralized power system as I did, while others did not. The mass media took the problem up and experts in various fields stated their views on it. This, I believe, made a contribution to the development of energy policy.

Response by the Japanese government and the Ministry of Economy, Trade and Industry was particularly rapid. They disseminated various information calling to conserve energy and the like. I can also give a positive rating to the institution of an investigative committee under the Organization for Cross-regional Coordination of Transmission Operators and the in-depth discussion in it. While the discussion in the investigative committee is still under way, various technical information has been disclosed, and the details of the blackout are gradually becoming clear.

Seeing that it is unfortunately not possible to entirely eliminate the possibility of blackouts, it is essential to take lessons from them and apply those lessons in the future. To this end, it is vital to perform the proper investigative work and to further stimulate discussion on policy, as is being done now. For this reason, I too would like to once again provide my views on four talking points that were raised in the interim.

Should the Tomari Nuclear Power Plant be Restarted?

First, one of the factors behind the blackout was the shutdown of the Tomari nuclear power plant, and some observers asserted that the plant should be swiftly placed back into operation. There is certainly a possibility that the blackout would not have occurred if the plant had been operating at the time. This is because simple addition of supply power indicates that 1.65 GW would not be needed if 2.07 GW were available.

This, however, is like asking for something that cannot be had. The Tomari nuclear power plant has not gone through the current safety inspection, was not in operation one month ago, is still not operating now, and cannot be restarted. Surely only a minority of observers would assert that the authorities should relax the safety standards and restart nuclear power plants in order to prevent outages.

I, on the contrary, would suggest the very fact that Hokkaido's biggest power source with a huge capacity of 2.07 GW has not been operating for six years is the real problem. This is one of the operational risks distinctive to nuclear power, and is amplified and emerged because the system composed of such sources is centralized. In contrast, with a distributed system, the probability of outage on the order of hundreds of thousands of kW in Hokkaido is extremely low, because the sources are dispersed.

Even supposing that the Tomari nuclear power plant had been operating the previous month, it is questionable whether it would have remained in operation under the influence of the earthquake. Even if the prefecture had not fallen into a state of external power source loss as happened this time, it would have taken time to restart the plant after emergency shutdown, and the serious supply shortage may have continued. This too is part of the vulnerability of concentrated siting of centralized power sources.

Negative Effect of Power Sector liberalization?

Secondly, there were comments to the effect that power sector liberalization lay behind the excessive dependence on the Tomato-Atsuma coal-fired thermal power plant by Hokkaido Electric Power. In this view, because the company was exposed to competition, it had no choice but to rely on large-scale coal-fired thermal power, which offers a low generation unit cost. In short, the company leaned toward emphasis on economic merit because of the liberalization, and this jeopardized supply stability.

This view, however, does not correspond with the facts. To begin with, operation of the Tomato-Atsuma power plant can be traced back to 1980 when the first unit was placed into operation, followed by the second unit in 1985. Power sector liberalization, on the other hand, began in the mid-1990s. The plant's fourth unit commenced operation in 2002, but even thereafter, Japan's power sector was almost devoid of competition. Liberalization began again in earnest in 2012. In the case of the Tomari nuclear power plant as well, two of the three units had been placed into operation by 1991. In other words, from before the liberalization, Hokkaido Electric Power and other electric power companies willingly built centralized power sources. This could be termed a product of the monopolistic setup. It is therefore not true that competition invited the concentrated siting of centralized power sources.

Indeed, what should be regretted in the wake of the recent blackout is the continued inability to give full play to the market mechanism when the supply tightened. During the planned outage in 2011, some observed that more smart meters should have been installed or dynamic pricing (variable power rates) should have been more widespread, which subsequently became factors in power system reform. People realized the irrationality of sacrificing comfort to save power, but one could not say that this lesson was fully applied this last time either. This is symbolized by the suspension of transactions within Hokkaido at the Japan Electric Power Exchange.

Recognition that the most efficient means of adjusting supply and demand is not the discretionary acts of electric power companies but the market has still not spread in Japan. Although it may have been necessary for the central load dispatching office to issue emergency instructions immediately after the earthquake, steps should probably have been taken to promote the supply of power from on-site systems and demand response through the market, at least once consumers were requested to save electricity. Liberalization contributes to a stable supply.

Are Distributed Power Sources No Different from Cetnralized Power Sources?

Thirdly, in my last column I underscored the importance of distributed power sources including renewable energy, and this view also came in for some criticism. In fact, the wind power capacity of 170 MW was taken off the grid right after the earthquake, and it took one week for these systems to be put back on the grid. It therefore was not of any assistance when the supply tightened. These critics say that renewable energy is nothing more than an auxiliary power source premised on the adjustment capability of thermal and other power sources, and cannot be relied upon.

In the first place, distributed power sources are not confined to renewable energy. They also include on-site generators, CHP systems, and demand response. Among the types of renewable energy, hydropower, geothermal energy, and biomass systems can provide adjustment power and enable adjustment of output as well. It is vital not only to increase the amount of variable renewable energy (photovoltaic and wind power systems), which still account for only 5 percent of the supply, but also to expand the other diverse types of renewable energy in a well-balanced manner. Japan is extremely blessed with such resources.

As for the wind power disconnection from the grid, this happened as a result of the overwhelming drop in the supply of thermal power and hydropower. In the 2011 case, wind power systems continued to operate. Even considering the combination of factors, i.e., the shutdown of the Kyogoku pumped-storage hydropower plant (400 MW), and the loss of a few hydropower plants (with a combined capacity of 430 MW) due to failures in the transmission network links with eastern Hokkaido, the problem did not lie with renewable energy per se; authorities should instead reflect on the lack of system design in order to exploit renewable energy. Furthermore, the original source of the problem was, after all, the inability to foresee risk at the Tomato-Atsuma coal-fired thermal power plant.

Is the Transmission Network Expensive?

The fourth talking point concerns the transmission network, which is a key element in distributed power systems. A resilient network is essential for the effective use of variable renewable energy and other distributed power sources. The last blackout could possibly have been prevented if the interconnection line linking Hokkaido with Honshu had been a little thicker. This assertion evoked the counterargument that transmission networks have a high construction cost which would cause power tariffs to jump, and that it would therefore be hard to bolster them.

It is true that transmission networks in Japan are more expensive than those in Europe and other regions. It has been said that one of the causes is the power specifications under the setup of 10 electric power companies. Costs are higher because specifications are apt to become excessive and differ from company to company. The transmission sector remained a natural monopoly even after liberalization, and there are consequently hopes that regulatory institutions will make fee assessments that are reasonable even in the international context.

In addition, I think that the low rates of utilization may also be cited as a factor behind the high expense of transmission networks. In point of fact, the use rate for the Hokkaido-Honshu interconnection line is extremely low; the line had not been fully used except in times of emergency like the last. Properly speaking, inter-regional transmission network links are constructed because mutual interchange of supply power between supply areas is more efficient than forming huge power plant buildups in each supply area. A rise in transmission network use rates could lower the need for power plants and decrease costs in the system as a whole. For this purpose, a market must be functioning across area boundaries.

It would naturally be preferable to have transmission tariffs that are even a little lower, and there is no need to construct transmission networks that are not necessary. Nevertheless, considering that full transmission networks have been constructed within each area (including links with nuclear power plants owned by a company outside its supply area), there appears to be some reason other than construction cost that is holding back the construction of inter-regional transmission networks. Under the leadership of an independent transmission company, steps should be taken to prepare nationwide plans based on the future siting of power sources over the long term, and to bolster the transmission networks when really necessary, including international interconnection lines.

Toward a Paradigm Shift from Centralized to Distributed Systems

In sum, the aforementioned four opinions are all objections based on the paradigm of centralized systems. This paradigm positions nuclear power as a low-cost provider of the base load indispensable for stable supply, and renewable energy as high-cost and a troublesome type of power source. It also has no expectations of the market mechanism or the role of inter-regional transmission networks. In Europe as well, centralized systems were taken as givens up until about 20 years ago, but things are now moving in precisely the opposite direction. Even coal-fired thermal power is considered to be without a future.

To avoid being misunderstood, I would like to note that the last blackout was the first since the end of the war, and that this is thanks to the efforts so far by the electric power companies, which deserve praise for this record. I should add that Hokkaido Electric Power is observing the N-1 standard related to system operation, and the investigation to date has not found any major errors on its part. Hokkaido will have to rely on centralized power sources for the time being, and there remain many points about renewable energy that are causes of uneasiness.

Nevertheless, what is at issue now is the course of action over the medium and long terms. It would be possible to spend decades heightening the rate of distributed sources as European countries have been vying with each other to do, and this has now become the most economical option. Will Japan be able to apply the lessons of 2011 and the last blackout, and make the paradigm shift in its power system? The Ministry of Economy, Trade and Industry has reportedly instituted a working group to make a total check of the power system following its technical investigation of the blackout. I am hoping for an official re-examination of energy policy from the medium and long-term perspectives.
< Related Links >
The Vulnerability of Centralized Power Systems as Evidenced by the Area-Wide Outage in the Hokkaido Earthquake
(7 September 2018)

External Links

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