Nuclear-Free Japan Braces for Severe Power Shortages

TOKYO (Reuters) - The shutdown of Japan's last working nuclear power plant and the government's failure to convince a wary public about restoring production at dozens of reactors leaves the world's third largest economy facing another summer of severe power shortages.

Hokkaido Electric Power Co shut its nuclear plant late on Saturday - the last of Japan's 50 reactors to go off line - marking the first time since 1970 Japan has been nuclear power-free.

Japan's $5 trillion economy has relied heavily on nuclear power for decades, with its reactors providing almost 30 percent of electricity needs, but last year's massive earthquake and subsequent nuclear crisis spurred a public backlash against atomic energy.

Cabinet ministers have largely failed to win over the public to allow the restart of the country's plants - shut one by one for scheduled maintenance and unable to resume operations because of concerns about safety.

Japan's Asahi newspaper said public sentiment was "wavering between two sources of anxiety" - fear over the safety of nuclear power and doubts on whether Japan can live without it.

"The public shouldn't just criticize (the government) but make its own decision on energy policy that involves burden and responsibility, such as through cooperating in power saving," the paper said in an editorial on Sunday.

The government hopes to come up with an estimate by mid-May of expected shortages this summer, and will then produce a plan to conserve energy that could include compulsory curbs on use of power, Japanese media say.

But setting a long-term energy policy or a clear timeframe for restarting the plants will take time given strong public opposition and a divided parliament that has paralyzed policy-making, analysts say.

WIDESPREAD pain

Policymakers are worried about the damage to the budding economic recovery as the power shortages are expected to be more severe and widespread than last summer, when many areas in Japan were still running nuclear reactors.

Some also warn of the long-term fallout as the rising cost of electricity, coupled with a strong yen, hits production and could prompt companies to shift operations overseas.

"Depending on the weather, power supply could constrain output during the summer," the Bank of Japan said.

"But we must be mindful not just of such short-term effects but the chance (the power shortages) could hurt Japan's medium- and long-term growth expectations," the central bank said in a twice-yearly report on the economy issued on April 27.

Japan managed to get through the summer last year without any blackouts by imposing voluntary curbs on the use of power in the aftermath of the earthquake and tsunami that left thousands dead.

Factories operated at night and during weekends to avoid putting too much stress on the country's power grids. Many big firms are already preparing to take similar steps this summer, but some also plan to generate power themselves to cut costs.

The last time Japan went without nuclear power was in May 1970, when the country's only two reactors operating at that time were shut for maintenance, the Federation of Electric Power Companies of Japan said.