Japan seeks new normal in tragedy aftermath Sunny side up: solar energy panels in Tokyo. Greater investment in solar is likely as nuclear power is phased out Nearly two years after the Fukushima nuclear disaster, the technological challenges facing Japan are becoming clearer and more daunting. The country is embarking on what could be a revolution in energy production, even as it grapples with the end of its decades-long dominance in consumer electronics. This year has seen the emergence of vocal public opposition to nuclear power, seemingly absent in the shock-filled months after the March 2011 earthquake, tsunami and meltdowns at Fukushima Daiichi power plant. IN Japan: Technology & Innovation 2012 Over the summer, the small, scattered street protests of a year ago morphed into crowded weekly demonstrations outside the prime minister's residence. By September, the government of Yoshihiko Noda, prime minister, had bowed to pressure and declared its intention to close down Japan's nuclear industry by the end of the 2030s - a radical shift for a country that had produced 30 per cent of its electricity from atomic plants before Fukushima. This policy contains big loopholes and might yet be undone - not least because Mr Noda's government, unpopular for its handling of post-tsunami reconstruction, taxes and diplomacy, looks likely to be replaced in an election on December 16. Still, no one thinks Japan's energy sector can go back to business as usual. A pre-Fukushima ambition to increase the share of electricity generated by nuclear power to 50 per cent has been buried like radioactive soil, and the politics of nuclear energy have undergone a fundamental re-orientation. Only two of the 50 usable reactors are now in operation. The rest are idle because of public opposition and legal wrangling between local governments and Tokyo. Even the conservative Liberal Democratic party, which oversaw Japan's atomic build-up and is likely to replace Mr Noda's Democratic party in the election, has been forced to disassociate itself from its pro-nuclear past, speaking of "cautious" downsizing rather than revival. Whether Japan chooses "no nukes" or "few nukes," the consequences for society and business will be significant. It remains an open question whether a country that imports virtually all its fossil fuels can replace an important carbon-free energy source without doing catastrophic damage to its economy or the environment. With most reactors offline, utilities are paying billions of dollars more for natural gas and oil and emitting 30 per cent more greenhouse gases. Japan's industrial giants will have to adapt too. Toshiba, Hitachi and Mitsubishi Heavy Industries are among the world's largest suppliers of nuclear equipment, but the prospects for new business in Japan have narrowed drastically. Executives hope foreign buyers will take up the slack, but marketing reactors overseas could be made more difficult by a shrinking domestic base and fading support from the government and utilities. Their best hope may lie in their diversity. Toshiba, Hitachi and MHI make many of the technologies that could replace nuclear power, from natural-gas turbines to solar panels and wind turbines which, under the shift in energy policy, would receive trillions of yen in investment. Some projects are already getting started, under the direction of both traditional power equipment companies and newcomers. Masayoshi Son, the billionaire founder of SoftBank, the telecoms group that recently bought a 70 per cent stake in Sprint of the US, is looking to build a network of commercial-scale solar energy stations, the first of which opened in Kyoto in July. Novel ideas are also being pushed for wind power and biomass. Plans to build the world's largest floating wind farm off the coast of Fukushima underscore Japan's sometimes surprising capacity to adapt under pressure - as well as the forces that too often block necessary change. After years on the drawing board, the wind project won quick approval for its initial test phase after Fukushima, yet construction could still be blocked by fishermen. The transformation of the energy sector is starting during a period of deep gloom for another, more globally recognised industry: the country's consumer electronics sector. Sony, Panasonic and Sharp together lost Y1.6tn last fiscal year, because of ever-declining competitiveness in televisions and write-offs of past investments. This year is expected to be almost as bad. Since the financial crisis began, the three companies have cut tens of thousands of jobs, lost some 85 per cent of market value and seen their debt downgraded to junk by some or all of the global rating agencies. External shocks have been partly to blame: since the global economy crumpled five years ago, they have faced falling demand, an export-wrecking surge in the yen, an earthquake and energy crisis at home and floods at major supply hubs in Thailand. Analysts also point to strategic errors, such as a tendency to throw good money after bad by backing unprofitable products after they have had their day. If the winners in today's tech world are software and design innovators such as Apple and huge-scale, low-cost hardware giants - including Taiwan's Hon Hai, which anonymously, but profitably, assembles other companies" products - then Japanese groups seem stuck in the money-losing middle. Beyond Japan's famous consumer brands, not all the news is grim. It has been a bad year for semiconductor makers - Elpida Memory went bankrupt and Renesas Electronics is seeking a government bailout - but many component and materials suppliers remain world leaders, with their high-tech output often crucial to products assembled by foreign groups. Competitive pressure on suppliers leaves little room for complacency, and parts and materials groups are vigilant about finding new applications and markets. One example is Nitto Denko, a 94-year-old company that started out making electrical tape and is today the biggest manufacturer of optical films used in liquid-crystal displays. Its next target is pharmaceuticals: it is working with a university researcher on a drug-delivery system to treat fibrosis ailments such as cirrhosis of the liver and Crohn's disease, which are incurable today. Japan can also be proud of its achievements in basic science. Shinya Yamanaka of Kyoto University shared this year's Nobel Prize in medicine for figuring out how to turn mature cells into immature stem cells - valued by researchers for their ability to develop into any living tissue. He was the 15th Japanese person to win a Nobel in science or medicine, a record that belies Japan's image as a nation that is better at tweaking imported discoveries than conducting its own research. And, of course, Japan will always have robots. A push to apply the technology of assembly-line robotics to healthcare is gaining pace, thanks to the country's greying population and shortage of young hospital and nursing home workers. But financial and technological obstacles to widespread adoption remain. Researchers are also working to improve the way machines think, spurred on by advancements such as IBM's Watson supercomputer, which trounced human champions on the US television quiz show Jeopardy!. Japanese researchers plan to build an artificial brain that can pass the incredibly competitive entrance exam of Tokyo University.