Today's press conference is held after two months' absence, as we had
no conference in August.
Today, I would like to discuss two topics: electricity demand in the summer period and the WANO (World Association of Nuclear Operators) general meeting that is held every other year.
To begin with, I would like to talk about electricity demand this summer.
This year, the summer high pressure front over the Pacific Ocean moved to the north, resulting in hot weather in the Kanto-Koshinetsu region and the east, but relatively cool, unsettled weather in the Chugoku region and the west.
Please take a look at Graph 1 in Reference 1, which shows the high temperatures for July and August. It reveals that temperatures east from Kanto-Koshinetsu were 1.5 C higher than average, while those to the west were 0.6 C lower. The same trend can be seen in the Reference under the graph, which shows the difference in the number of full summer days on which the temperature rose above 30 C.
Under these circumstances, peak and daily demand at Hokkaido Electric Power Co., Tohoku Electric Power Co., and Hokuriku Electric Power Co., outpaced previous records, while at other electric companies they fell short of expectations. As a result, peak demand across the ten electric companies was 168.66 million kW on 4 August (down 2.47 million kW compared with the previous year's peak demand), marking the fourth consecutive year of decline. On the other hand, daily demand reached 3098.88 million on 4 August, up 6.95 million kWh (0.2%) for the second consecutive year.
Overall, peak demand this summer fell short of previous records by 2.5 million kW. However, a close analysis of the figures reveals that our results could easily have been better.
Please refer to Table 3 of the reference materials. When we analyze weekday data in July and August for peak demand "load sensitivity to temperature" across the ten electric companies, it can be seen that a 1 C increase in temperature brings about a 4.9 million kW rise in demand.
In other words, if the highest temperature this summer, which was 33.9 C (weighted average in the 10 largest cities) on 4 August, had been 1 degree higher, peak demand would have been well over previous records.
So although peak demand this summer did not outpace previous records, this was caused by only slight differences in temperature. If the weather had been even slightly warmer, electricity demand would have reached expected levels (approx. 176.64 million kW).
Next, I would like to comment on large industrial user demand, which I suspect is an area of interest to all.
I believe you are familiar with the electricity demand figures for July that were included in the Confirmed Bulletin for August. To briefly review: large industrial user demand in July was down 1.5% from last year, marking the 19th consecutive month of decline. This is longer even than the decline recorded between June 1974 and November 1975 when the "oil shock" hit Japan.
It seems clear that the real situation is being affected by total of electricity sales and privately generated electricity supplies. Please take a look at Column (b) of the table at the bottom of the second page of Reference 1. Total of electricity sales and privately generated electricity supplies declined for 16 months in a row between February 1998 and May of this year, but two months' rise can be seen in June and July, although the change was small.
As you know, we use the "Large Industrial User Curve" as a tool to
measure the business climate. Generally, upward trends are revealed
when the increase in the total of electricity sales and privately
generated electricity supplies outpaces that for contracted
electricity. The crossing of the lines generally coincides with a
turning point in business climate.
According to the Curve, in the period of November 1997 -- May 1999,
the increase in the total of electricity sales and privately
generated electric power was below that for contracted electricity,
which characterizes a continuing business slump. But in June and July
of this year, the trend reversed.
Although the data is still inconclusive, and I think that two months' performance does not necessarily give a clear picture of what business conditions are like, I am confident that the situation is beginning to bottom out.
Next, I would like to move on to the topic of the WANO general meeting. The meeting, which is held every other year, will be held this year in Victoria, Canada on 20 and 21 September.
Please see Reference 2. WANO, which celebrates its tenth anniversary this year, is a private organization established after the Chernobyl Nuclear Power Plant disaster occurred in 1986. It is comprised of approximately 130 electric power utility operators around the world, and is free from political intervention. It was established so that power utility operators can share information with each other and give technical assistance to enhance the safety and credibility of nuclear power plants. In addition to nine electric power companies in Japan, Japan Atomic Power Company, Ltd., the Central Research Institute of Electric Power Industry and the Nuclear Fuel Cycle Development Organization are members of WANO.
The general meeting is held once every two-years and all members get together to discuss WANO's guidelines and exchange opinions on overall nuclear power operations.
About 350 participants representing 131 electric power utility operators in 35 countries will attend the general meeting, including many, like the presidents of Japan's electric power companies, who have nuclear power-related concerns.
I will give a speech on the current situation in Japan as a representative of the "Tokyo Center," one of 4 regional centers throughout the world.
There is a proverb, "The danger past and God forgotten". It is more than ten years since the Chernobyl accident, and the disaster is rapidly fading from memory. In addition, to my regret, it appears that WANO members are beginning to show an unwillingness to attend the meeting due to improved operations at nuclear power plants throughout the world, declining crude oil prices and a changing atmosphere brought about by stiff competition among energy industry caused by deregulation.
On the other hand, unlike in the U.S. and Europe, there are a lot of Asian countries that are aggressively promoting nuclear power development. In addition to 86 operational units in the area covered by the WANO "Tokyo Center," there are 24 units under construction and more than 20 units whose construction is planned. Furthermore, there are many other nations, such as Vietnam, Indonesia, Thai, Malaysia and North Korea, which may have nuclear power plants in the future.
In some of those countries, there are safety concerns because they lack clear-cut information disclosure policies, or do not have enough experience in the construction and management of nuclear power plants.
Also, even in western Europe, the U.S. and Japan, where safety standards are considered to be high, I hear there are some concerns about increased risks resulting from overconfidence about safety, and mounting pressure to improve economic performance in the face of market liberalization.
If an accident occurs at a nuclear power plant, the effect instantly extends to the world. If, for example, an accident like the one at Chernobyl should occur again, the commercial use of nuclear power would probably be abandoned.
In that sense, I think that the role of WANO, which gives power operators from around the world a chance to gather for the common purpose of enhancing the safety and credibility of nuclear power plant operations -- is very important. Not only will I do my best to revitalize WANO among current member countries, but I intend to deliver the message that Japanese operators will do everything possible to improve the safety of nuclear power in countries throughout the world.