Electricity Prices a Surprise

Given how often I hear Japanese lamenting the cost of electricity in this country, I was surprised to discover yesterday that the cost of residential electricity in this part of Japan is pretty much the same as it is in South Australia (around 25 cents per kWh). I expected Australian rates to be cheaper in comparison given the following:

  • In Chubu electricity is provided by a regional private monopoly; in SA there is (supposedly) competitive markets for power generation and retailing.
  • Japan has almost no natural energy resources. Australia has an abundance, and exports Liquified Natural Gas and coal to Japan.
  • The only nuclear plant that supplies this region has indefinitely suspended operations following the March 11 Tsunami because it was built in a costal location that is right on top of a fault line.(Yes, I know! What were they thinking?) This means that almost all of Chubu’s electricity is now being generated at resource-intensive thermal power plants.

Why isn’t electricity in SA cheaper? Does the “Tyranny of distance” strike again? (i.e. Is the cost of distributing the stuff much more expensive given SA’s widely disbursed population? ) And how much further will it rise once the carbon tax is implemented? Could we end up paying more for energy in resource-rich SA than they (and currently we) pay in resource-poor Japan?

Hamaoka Nuclear Power Plant
Hamaoka Nuclear Power Plant - All reactors are currently suspended. Photo source: Wikipedia
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