After the Fukushima Meltdown, Japan S Nuclear Restart Is Stalled

After the Fukushima meltdown, Japan’s nuclear restart is stalled

By Daniel Aldrich and James Platte August 15, 2014 The Washington Post

An aerial view shows Tokyo Electric Power Co. (TEPCO)’s tsunami-crippled Fukushima Daiichi nuclear power plant and its contaminated water storage tanks (bottom) in Fukushima in this file photo taken by Kyodo on August 20, 2013. (REUTERS/Kyodo/Files)

It is now three and a half years since the March 2011 earthquake and tsunami led to meltdowns at Japan’s Fukushima Daiichi nuclear power plant and the subsequent shuttering of all 48 of Japan’s nuclear reactors. Yet Prime Minister Shinzo Abe’s plans to quickly restart that country’s atomic energy program remain stalled. While Japanese businesses have continued to press politicians and bureaucrats to bring plants across the country back online, exactly when any of Japan’s reactors will restart is uncertain.

Last month, the two reactors at the Kyushu Electric Power Company’s Sendai nuclear power plant were the first to pass new, stricter safety tests, but the actual restart date has beenpushed back into the winter of 2015. Residents within 5 km of the plant now have potassium-iodide pills in the event of another accident, and some nine towns within 30 km of the plant have finally designed evacuation plans in case of a meltdown. These changes were a direct result of the Fukushima accident, which also spurred the creation of a new, independent nuclear industry regulator.

The Nuclear Regulation Authority (NRA) replaced a patchwork of bureaucrats who controlled the industry before the disaster — many of whom were simultaneously tasked with promoting the field through incentives and grants to local communities. The NRA, staffed primarily with civil servants from the Ministry of the Environment, has been widely viewed as much more strict than, for example, the Agency of Natural Resources and Energy, which was located within the Ministry of Economy, Trade, and Industry. The NRA’s headquarters are far outside the Japanese equivalent of the Beltway, and the agency has worked hard to demonstrate its autonomy from the industry.

Beyond changing the regulatory environment in Japan, the Fukushima meltdowns caused a sea change in public opinion on nuclear power. Before the accidents, some two-thirds of respondents regularly supported increasing the number of nuclear power plants. Now, the same percentage of residents oppose the use of nuclear power in Japan, and anational poll at the end of Julyfound nearly 60 percent of respondents opposed the restart of the Sendai nuclear plant.

Communities that directly host the facilities continue to — with some exceptions — support the restart of these facilities. Their support derives primarily from financial reasons: the central government provides up to $10 million a year to the small, rural, coastal towns that have these projects in their back yards. Research published by one economist showed that even for these communities the actual benefits to individuals vary widely.

But towns more than 5 km from the plant receive few, if any, financial benefits and have been vocal in their opposition to restarts. Further, because of a longstanding gentlemen’s agreement between utilities and local communities, mayors and governors hold unofficial veto power over the process. Without their support, power utilities will be unable to restart their plants.

Tokyo Electric Power Company (TEPCO), the owner of Fukushima Daiichi, has not helped restore public trust in nuclear energy through its continued mismanagement of the radioactive contamination in Fukushima. The utility unveiled plans to stop the daily leak of contaminated water from onsite storage tanks into the ocean through an extended “wall of ice.” Several months in the efforts, there is little to show beyond massive blocks of ice and huge purchases of liquid nitrogen.

Despite the anti-nuclear sentiment in the Japanese public, theAbe cabinet approved a new energy policythis past spring supporting nuclear power and promoting the restart of Japan’s existing nuclear reactors. The policy also calls for reducing Japan’s dependency on nuclear power and developing renewable energy technologies. Yet, the plan did not set any generation targets or lay out an energy portfolio.

The power utilities and consumers are the ones literally paying the price of the uncertainty surrounding Japan’s power sector. As all of Japan’s nuclear plants gradually were shut off throughout 2011 and 2012, fossil fuel imports, particularly liquefied natural gas, increased to compensate for the loss of nuclear generation.According to Japan’s Ministry of Economy, Trade, and Industry, imported fossil fuels generated 88 percent of Japan’s electricity in 2013, compared with 62 percent in 2010. Between 2010 and 2013, household consumers experienced a 19.4 percent rise in electricity rates, and industrial users were hit with a 28.4 percent rise in rates.

Making matters worse, Japan pays a very high price for natural gas, the so-called Asian premium.According to BP, Japan paid $16.75 per million BTU of natural gas in 2012, while the U.S. Henry Hub price was $2.76 per million. Natural gas prices in Japanhit a record highof $20.125 per million BTU this past February. The devaluation of the yen against the dollar has made the situation even worse.

As a result, all of Japan’s power utilities that operate nuclear power plants are struggling financially, consistently posting large losses since 2011. TEPCO was effectively nationalized to prevent it from failing, and in April, the state-owned Development Bank of Japan announced a total of nearly$1.5 billion in preferred stock investmentsinto Kyushu Electric Power Company and Hokkaido Electric Power Company. Kyushu and Kansai Electric Power Company both recorded losses of over $900 million last year.

The ultimate question is how many reactors will restart and by when. The NRA has received 17 applications for restart, including for Sendai, and likely will receive more as it completes inspections. Assuming that each nuclear power plant safety review will take several months, it appears likely that the reactor restart controversy will last for at least a few more years.

By the end of 2020, 13 reactors will have reached the 40-year limit of their operating licenses, and an additional 10 more reactors will be 40 years old by 2025. Unless the NRA begins considering license extensions, it seems reasonable to assume that most of these older reactors will not restart. Thus, one could estimate that 25 to 30 reactors would restart in the next five years or so, and this does not account for newer reactors that the NRA or local governments could declare unfit for restart. While restarting some reactors will help generate revenue for Japan’s struggling power utilities, the cost of decommissioning about half of Japan’s pre-Fukushima reactor fleet will be significant. Despite the nuclear revival ambitions of the LDP and industrial leaders, Japan’s nuclear sector appears to have a long, difficult road ahead of it.

Daniel Aldrichis an associate professor and University Faculty Scholar at Purdue University, and the author ofSite FightsandBuilding Resilience. James E. Platte is a Sasakawa Peace Foundation fellow at Pacific Forum CSIS in Honolulu. He conducts research on U.S.-Japan civil nuclear cooperation and security in Northeast Asia.