Fukushima and thereafter: Reassessment of risks of nuclear power

The Fukushima nuclear accident on March 11, 2011 in Japan has severely dented the prospects of growth of civilian nuclear power in many countries. Although Japan's worst nuclear accident was triggered by an unprecedented earthquake and tsunami, inadequate safety countermeasures and collusive ties between the plant operators, regulators, and government officials left the Fukushima Daiichi nuclear plant beyond redemption. A critical examination of the accident reveals that the accumulation of various technical and institutional lapses only compounded the nuclear disaster. Besides technical fixes such as enhanced engineering safety features and better siting choices, the critical ingredient for safe operation of nuclear reactors lie in the quality of human training and transparency of the nuclear regulatory process that keeps public interest—not utility interest—at the forefront. The need for a credible and transparent analysis of the social benefits and risks of nuclear power is emphasized in the context of energy portfolio choice.     

发展核能是中国的重要出路

叙述了由于地震引起的日本福岛核事故的教训,指出,中国能源的主要出路在于核能和可再生能源,核电厂基建费用的60%用于安全防护及核电是1种可靠的能源。     

From hero to zero: Evidence of performance reversal and speculative bubbles in German renewable energy stocks

Stocks of German renewable energy companies have commonly been regarded as lucrative investment opportunities. Their innovative line of business initially seemed to promise considerable future earnings. As shown by two powerful bubble tests, the positive sentiment for renewable energy stocks even led to explosive price behavior in the mid-2000s. However, intense sector competition and the economic downturn following the global financial crisis erased profit margins to a large extent. As a result, the former fad stocks have recently turned into losers, loading negatively on price momentum and delivering significantly negative Carhart four-factor alphas. The radical shift in Germany's energy policy following the 2011 Fukushima nuclear disaster in Japan could thus only temporarily halt the continuing decline in alternative energy stock prices.     

Review of Japan's power generation scenarios in light of the Fukushima nuclear accident

Following on from the Fukushima Daiichi nuclear power plant accident, the Japanese government is now in the throes of reviewing its power policy. Under continuing policies of economic revival and greenhouse gas reduction, it is crucial to consider scenarios for the country to realize reliable, low‐carbon, and economic electricity systems in the future. On the other hand, the social acceptance of nuclear power will affect the final political decision significantly. Therefore, in the present study, proposed power generation scenarios in Japan in light of the Fukushima accident were reviewed comprehensively from economic, environmental, technological, resource, security, and social perspectives. The review concludes that in Japan, (i) renewable energy mainly solar and wind needs to be developed as fast as possible subject to various constraints, (ii) more gas power plants will be used to absorb the fluctuations of intermittent renewable energy and supply electricity gap, (iii) nuclear power will be reduced in the future, but a 0% nuclear power scenario by 2030 is unlikely to be a reasonable choice on most measures and (iv) the effective communication with the public is vital important. Copyright © 2014 John Wiley & Sons, Ltd.     

Present status of pumped hydro storage operations to mitigate renewable energy fluctuations in Japan

This paper focuses on pumped hydro energy storage (PHES) plants’ current operations after electricity system reforms and variable renewable energy (VRE) installations in Japan. PHES plants have historically been developed to create electricity demand at night in order to operate base load power plants, such as nuclear power plants, in stable conditions. Therefore, many PHES plants are located midway between nuclear power plants and large demand areas. However, all nuclear power plants had to - at least temporarily - shut down after the Great East Japan Earthquake followed by a nuclear accident at Fukushima Daiichi in 2011, and renewable energy power plants have been deployed rapidly after the introduction of a feed-in-tariff (FIT) scheme. Therefore, PHES plants are being used to mitigate fluctuations of VRE, especially in areas where renewable energy has been significantly installed. The daily highest capacity ratio of PHES plants in Kyushu area has recorded three times higher than it in the other areas where the past operating mode is still conducted. But those operations on PHES plants are simply followed as a dispatch rule of the Organization for Cross- regional Coordination of Transmission Operators (OCCTO), market-based operations have not been conducted enough yet. The market design shall be changed to harmonize VRE installation and PHES plants’ operations are necessary to make the transition from the past operating mode of PHES plants across Japan.     

Effect of the Fukushima nuclear disaster on global public acceptance of nuclear energy

The Fukushima nuclear disaster has significantly changed public attitudes toward nuclear energy. It is important to understand how this change has occurred in different countries before the global community revises existing nuclear policies. This study examines the effect of the Fukushima disaster on public acceptance of nuclear energy in 42 countries. We find that the operational experience of nuclear power generation which has significantly affected positive public opinion about nuclear energy became considerably negative after the disaster, suggesting fundamental changes in public acceptance regardless of the level of acceptance before the disaster. In addition, contrary to our expectation, the proportion of nuclear power generation is positively and significantly related to public acceptance of nuclear energy after the Fukushima accident and government pressure on media content led to a greater decrease in the level of public acceptance after the accident. Nuclear energy policymakers should consider the varied factors affecting public acceptance of nuclear energy in each country depending on its historical, environmental, and geographical circumstances before they revise nuclear policy in response to the Fukushima accident.     

Multilateral approach to the back end of the nuclear fuel cycle in Asia-Pacific?

In spite of the nearly unprecedented scale of the Fukushima Daiichi Nuclear Accident which caused countries around the world to review their nuclear power systems and to rethink their nuclear power expansion plans, nuclear power capacity continues to grow, spearheaded by the Asia-Pacific region. The Asia-Pacific has become a major emerging market for nuclear energy industry, which indicates that the management of spent nuclear fuel is likely to be a nuisance for the countries in this region in the coming decades. By reviewing the history of discussions on multilateral approaches to the back end of the nuclear fuel cycle and examining relevant empirical cases, this article aims to explore the feasibility of a multilateral approach to the back end of the nuclear fuel cycle in this region and provide some policy suggestions to enhance nuclear governance in the Asia-Pacific.     

Regulatory failures for nuclear safety – the bad example of Japan – implication for the rest of world

Investigation before and after the Fukushima nuclear accident has revealed that the failures of Japan's nuclear regulatory system was also blame to the worst nuclear accident since Chernobyl. The Fukushima nuclear accident has served to remind us that nuclear safety regulatory failure is vulnerable to the potentially deadly combination of natural risk. It should be noted that nuclear regulatory failures are not unique to Japan, given the low efficiency of the International Atomic Energy Agency (IAEA). We are living in a nuclear world. We have no alternative but to learn the lessons from the Fukushima. Unfortunately, all signs do not seem to be promising. This was partly due to competing proposals from several countries without clear understanding of which ideas would help, and a lack of sustained leadership focused on building support for key initiatives beforehand. New actions to strengthen the nuclear safety should be derived upon a thorough assessment of the causes for Japan's nuclear regulatory failures, as well as a comparative analysis of the nuclear regulatory systems in Japan, the United States (the owner of most nuclear reactors in operation), and China (the owner of most nuclear reactors under construction). This article is addressed to conduct an analysis of the causes for Japan's nuclear regulatory failure, discuss the key deficits in the nuclear regulatory systems of the U.S. and China, and finally outline two main policy recommendations. Nuclear accident knows no boundaries. Strengthening our nuclear safety regulation is not an option but an imperative, thus ensuring that the 433 operational units of reactor run safely, as well as 65 proposed ones. March 11, 2012 is the first anniversary of the Fukushima accident. This provocative article that calls for action on upgrade nuclear safety regulation over the world is dedicated to commemorate the first anniversary of the Fukushima accident.     

Factors influencing the public intention to use renewable energy technologies in South Korea: Effects of the Fukushima nuclear accident

The Fukushima accident has influenced public attitudes toward energy sources and technologies, including not only nuclear energy, but also other energy sources. Therefore, it is worth investigating how the accident influenced public perceptions of renewable energy and its technologies, between the time before the accident and after the accident. This study aims to explore the effects of the Fukushima accident on the public perceptions of renewable energy technologies in South Korea, the closest nation to Japan. This study found that there were notable differences of public perceptions, including public attitudes, perceived benefits, trust, intention to use, knowledge and risks between before and after the earthquake. In addition, the perceived cost of renewable energy technologies was the primary determinant of the intention to use the technologies before the accident, whereas public attitudes toward the technologies became the main antecedents of the intention after the accident. After the accident, we found that there is a multi-dimensional matrix of perceived trust-benefits (with risks)-attitude-intention to use, in explaining the public acceptance of renewable energy technologies. Moreover, we found significant roles of the perceived trust, benefits and risks in the research model. Based on the empirical findings, both implications and suggestions are presented.     

Consumers' willingness to pay for renewable and nuclear energy: A comparative analysis between the US and Japan

This paper examines consumers' willingness to pay for nuclear and renewable electricity as two alternatives to fossil fuels for the reduction of greenhouse gas emissions. We conduct a choice experiment of consumer-stated preferences on the basis of an online survey in four US states and Japan after the Fukushima nuclear plant accident. First, the results suggest that US consumers' willingness to pay for a 1% decrease in greenhouse gas emissions is $0.31 per month, which is similar to the results for the US a decade ago. Japanese consumers show a slightly lower willingness to pay of $0.26 per month. Second, the average consumer in both countries expresses a negative preference for increases in nuclear power in the fuel mix (to a greater extent in Japan). Third, renewable energy sources were endorsed by both US and Japanese consumers, who show a willingness to pay $0.71 and $0.31 per month for a 1% increase in the use of renewable source energy. This study also examines the differences in respondents' characteristics. Approximately 60% of the US respondents who did not change their perception concerning the use of nuclear energy subsequent to the Fukushima nuclear crisis have almost no preference for variation in nuclear power, which is in stark contrast to the Japanese respondents' opposition to nuclear energy.     

Capital market response to emission rights returns: Evidence from the European power sector

Prior studies on the distributional effects of the European Union's Emission Trading Scheme (EU ETS) have so far only relied on supply and demand data. Empirical evidence from capital markets has been missing. We address this gap and measure the ETS's economic consequences, using the expectations of investors towards the regulatory impact on firm value. Employing a multifactor model, we show that returns on common stock of the largest affected industry, power generation, are positively correlated with rising prices for emission rights. This implies that the market predicts that firms are not only able to pass on their share of the regulatory burden to customers but even achieve windfall profits by overcompensating for the costs.     

Regulating technological change—The strategic reactions of utility companies towards subsidy policies in the German,Spanish and UK electricity markets

This paper focuses on how incumbent electric utilities strategically react to subsidy schemes supporting renewable energy technologies in the UK, Germany, and Spain. Firms coordinate the development of their technological capabilities and their political activities to shape their regulatory environment. Analysing the diffusion of wind power in these countries, we show that the different ways, in which firms coordinate their technological and political strategies, lead to very different market outcomes, both for the firms’ market share and the size of the overall market. Although incumbents are usually seen as being resistant to change in energy systems, we show that Spanish utilities proactively drive the diffusion of wind power. We speculate about the relation between the ownership structure of the energy system and its inertia with respect to the integration of new technologies. We derive novel policy implications that explicitly take into account the strategic actions of incumbent firms shaping the technological and regulatory system.     

The dynamics of returns on renewable energy companies: A state-space approach

The renewable energy sector has accomplished remarkable growth rates over the last decade. This paper examines the dynamics of excess returns for the WilderHill New Energy Global Innovation Index, which lists firms in the renewable energy sector and is used as a global benchmark. We propose a multi-factor asset pricing model with time-varying coefficients to study the role of energy prices and stock market indices as explanatory factors. Our results suggest a strong influence of the MSCI World index and technology stocks throughout the sample period. The influence of changes in the oil price is significantly lower, although oil has become more influential from 2007 onwards. We also find evidence for underperformance of the renewable energy sector relative to the considered pricing factors after the financial crisis.     

Assessing the impact of oil returns on emerging stock markets: A panel data approach for ten Central and Eastern European Countries

This paper uses an international multi-factor model in order to investigate the relationship between oil price risk and stock market returns for the emerging capital markets of the Central and Eastern European Countries (CEECs). A panel data approach is being employed for the period covering 22 October 1999 until 23 August 2007. The oil price beta is found to be negative and statistically significant suggesting that the oil price is indeed an important factor in determining stock returns. No statistically significant non-linear dependency is found between market risk and emerging market stock returns or between oil price risk and returns. Observation of conditional models shows positive reaction of emerging stock market returns to upward movements of market returns. The reaction of the stock returns to upward and downward movements of the oil market is also negative but more significant when oil prices are low.     

Public preferences for alternative electricity mixes in post-Fukushima Japan

Using representative household survey data from Japan after the Fukushima accident, we estimate peoples' willingness-to-pay (WTP) for renewable, nuclear, and fossil fuels in electricity generation. We rely on random parameter econometric techniques to capture various degrees of heterogeneity between the respondents, and use detailed regional information to assess how WTP varies with the distance to both the nearest nuclear power plant and to Fukushima. Compared to fossil fuels, we find a positive WTP for renewable and a negative WTP for nuclear fuels. These effects, in absolute terms, increase with the proximity to Fukushima.     

Oil price shocks,competition, and oil & gas stock returns — Global evidence

Extant literature suggests that oil price shocks have a strong impact on the macroeconomy and the stock market. However, relatively less is known about the effect of country-level determinants, competition, and asymmetrical relationship in affecting the oil & gas stock return at the firm-level. Using a comprehensive firm-level monthly data from 70 countries spanning 1983 to 2014, we find: (i) macroeconomic stress negatively impact firm-level returns; (ii) oil price shocks positively impact firm-level returns; (iii) firms located in high oil producing countries are more sensitive to global uncertainty and oil price shocks; (iv) firms located in non-competitive industries are less sensitive to oil price shocks; and (v) firms located in non-competitive industries are less affected by the drop in oil price, as compared to firms that are located in highly competitive industries. Our results remain qualitatively similar using a battery of robustness checks.     

Energy consumption,energy R&D and real GDP in OECD countries with and without oil reserves

The objective of the study is to shed light on the contributions of energy consumption and energy R&D on economic growth. We examine two sets of causal relationship between (1) capital stock, energy consumption and real GDP and (2) capital stock, energy R&D and real GDP using panel-based fully-modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) for 20 OECD countries over the period of 1980–2010. Since different countries may respond differently to energy consumption and energy R&D, the sample is further divided into two groups: OECD countries with oil reserves and without oil reserves. Similarly, energy consumption and energy R&D are also further divided into fossil fuel energy and renewable energy. The results show that the role of energy R&D should not be overlooked and fossil fuel R&D is found to drive economic growth more than fossil fuel consumption. The findings also show that while capital stock and fossil fuels are the key factors driving economic growth, renewable energy promotes real output, specifically in the countries without oil reserves.     

Disclosed corporate responses to climate change and stock performance: An international empirical analysis

This paper examines the relationship between disclosed corporate responses to climate change and stock performance on the European and US stock markets. Methodologically, we consider investor expectations and compare risk-adjusted returns of stock portfolios comprising corporations that differ in this indicator for environmental performance. In this respect, we apply the flexible Carhart four-factor model in addition to the restricted one-factor model based on the Capital Asset Pricing Model (CAPM). The main result of our portfolio analysis is that a trading strategy which consists of buying stocks of corporations disclosing responses to climate change and selling stocks of corporations with no disclosures has become more worthwhile over time in Europe. Furthermore, it can be shown that the relationship between disclosed corporate responses to climate change and stock performance has been positive for energy firms in the USA. One reason for these results could be the underlying stringency of institutional pressure with respect to global warming.     

福岛核危机后日本新能源格局的转变及其影响与启示

日本新能源的发展趋势会对全球的能源变革产生巨大作用。从第一次石油危机至今,日本的新能源无论是总量还是在能源结构中所占的份额都有了质的飞跃,这不仅是因为新能源的技术和设备有了长足进步,更重要的是来自日本政府能源政策的支持,但2011年的福岛核危机将彻底改变日本的能源格局。日本政府宣布将中止核电发展计划,可再生能源将成为下一步能源发展战略的核心。然而日本的规模化可再生能源过程也面临着如何弥补核电站退役后的电力缺口、国土面积狭小、电网网架薄弱以及因电价过高导致的巨额补贴费用等诸多困难。与此同时也给日本带来了新的发展机遇,可再生能源将成为日本经济新的增长点。日本核危机使全球核能遭遇低潮期,而可再生能源将迎来新的发展机遇,这有可能催生第三次产业革命。同时也认识到,能源来源的过于单一化使得能源风险加剧,需要建立健全的、快速的能源应急机制,加大国际间能源合作,突破能源技术壁垒。此次日本核危机促使中国反思自身的核电发展策略。中国具有丰富的可再生能源资源,当前应抓住这一发展机遇,加大产品技术含量,切勿盲目扩大生产规模,同时拓展非主流型可再生能源生产设备市场。政府要把握整体布局,避免出现区域性生产"过度"。     

The dynamic dependence of fossil energy,investor sentiment and renewable energy stock markets

This study investigates the dynamic directional information spillover of return and volatility between the fossil energy market, investor sentiment towards renewable energy and the renewable energy stock market using the connectedness network approach. Empirical results show that the spillover effects of the volatility system are generally stronger than that of the return system, which suggest that risk transmission among the markets is more obvious. In both systems, the impact of the fossil energy market, especially crude oil, on the renewable energy stock market is greater than the impact of investor sentiment on the renewable energy stock market. This finding shows that the renewable energy stock market is closely related to the fossil energy market. Furthermore, the rolling window approach is adopted to examine the time-varying information spillover among them. The dynamic findings suggest that investor sentiment towards renewable energy can explain the return and volatility of renewable energy stock to a certain degree.