Geopolitics and the New Energy Situation

in Japanese

Being dependent on imported fuels proved to be economically painful after the Russian invasion of Ukraine. Europe and Japan in particular suffered as prices of fossil fuels and uranium increased. Avoiding fuel dependency has once again become a high priority for many countries; partly for climate protection reasons, but mainly for national independence.

In Europe, the supply of uranium and nuclear fuels also showed to be more problematic than many expected. Russia, together with its allies Kazakhstan and Uzbekistan, controls more than half of global uranium mining. Europe had managed to get a quarter of uranium supplies from Niger¹, but that became difficult after a military coup backed by Russia and its Wagner mercenaries. As a result, world market prices for uranium have increased from 30 to 90 USD per pound.

When fuel imports stops, heat, electricity and transport systems will stop functioning as stocks run out.

But the world is better equipped today than in the 20th century. Costs of alternative renewable electricity production has fallen, and installations have accelerated. The International Energy Agency (IEA), reports that renewable electricity is now the cheapest source of electricity almost everywhere². Fatih Birol, recently concluded that accelerating the deployment of renewable energy will make energy less costly³, not more.

However, in both Europe and the US, this has drawn attention to another growing dependency that is causing concern. The dominant providers of solar PV products and materials for solar technologies, electric generators, batteries and even some wind power components, are controlled by China.

Compared to being dependent on imported fuels, this is a less urgent problem. Even if imports stop, electricity generation will continue and the electric cars can continue to operate. Nevertheless, it is an industrial and economic problem.

Both in Europe and the US, major efforts to develop these industries as well as providing the metals and resources used in the manufacturing processes, have been initiated.

The European Union has a set of regulations and policies to speed up energy and industrial independence. The initial Fit-for-55⁴ goals were seen as climate goals. After the Russian invasion into Ukraine, the REPowerEU⁵ strategy was launched to accelerate this process in order to depress world market prices and reduce Russian income. The industrial independence is expressed in the Critical Raw Materiel Act⁶ and initiatives like the European Battery Alliance⁷.

The US named the policy package the Inflation Reduction Act⁸, as one purpose is to reduce energy prices by increasing low cost renewable supplies while supporting domestic industrial development, and reducing dependence on China.

Japan has common interests with Europe and the US.

Japan has a strong history in these industries. 25 years ago, Japan was a world leader in solar PV technologies and more recently, the battery industry has been impressive. As an island country, poor in traditional fuels, the motivation to succeed in reducing dependence on imported fuels and avoiding industrial dependence on China, should be at least as strong as in Europe and the US.

Still, Japan seem hesitant in embracing the new technologies and developing domestic industries.

It is time for a major effort in creating energy independence and energy technology independence in Japan in the same way as Europe and the US do. Failure to do so, will make Japan economically weaker.