The Asia Report is supported by Cathay PacificIf Japan’s power shortage experience in the 1970s is any example, it may be able to deal with the aftermath of the Fukushima disaster better than expected, according to Societe Generale’s Takuji Okubo.
The last time Japan faced significant power shortages was during the oil shock of the 1970s. At the time, the government demanded a 15% cut to large scale users and the resulting power shortage slowed GDP growth by 3.4% in 1Q 1974.
Okubo believes Japan can cut power use, and conserve energy, like it did in 1974. Okubo predicts that large-scale commercial users will be able to save 2,037 MW and industrial users will be able to save 2,600 MW over summer. He bases this on the government’s response to a smaller power shortage in 2007, when large-scale users saved 3,100 MW.
TEPCO announced that Japan could experience an 8,500 MW power shortage over summer, so this does still leave Japan short. But it’s likely to limit the economic impact of the power outage.
Photo: Societe Generale