Estimates vary, but experts converge on a view that at least half of the nation’s 48 reactors will make progress or restart by the end of 2015. Also, five-to-seven units in the 40 plus club may set out on the road to decommissioning by March 2016.
Financial analysts who follow the Japanese nuclear industry have multiple views on how many reactors will return to revenue service in 2015. Cantor Fitzgerald forecasts, according to wire service reports, that in the long-term 32 of the nation’s 48 reactors will achieve that outcome with nine of them doing so in 2015. The firm projects another 10 units will restart in 2016 and the remainder in 2017-2018. The firm added a caution to its projections saying that “investors remain skeptical on whether the restarts will actually occur.”
Dundee Capital Markets, in comments made available to financial wire services, said it expects that of the 19 reactors it sees as having the potential to restart, 13 of them are likely to gain approval from the Nuclear Regulatory Agency in 2015, and, most importantly, also gain support from local and provincial elected officials.
The first four reactors expected to return to revenue service are two at Sendai (1 & 2) and two more at the Takahama site (3 & 4). All four units have met new safety requirements. The next reactors on the short list for restarts are likely to be Units 3 & 4 at the Oi nuclear plant.
The drive to restart as many reactors as possible as soon as regulatory and local approvals can be obtained is driven by spiraling costs for natural gas imports and the rate hikes passed on to industry and consumers. A Bloomberg wire service report for 12/17/14 says that Japan’s electric utilities paid about $31 billion more for fossil fuel in 2013 compared to 2010 which is the complete fiscal year prior to Fukushima.
The move to shut down older reactors appears to be a two-part political calculation. First, PM Abe wants to show he is committed to decreasing the country’s dependency on nuclear power. Second, the political calculus is that a red line of 40 years, at the end of their initial license for most of Japan’s reactors, may save the younger reactors while sacrificing the older units to expediency. The government’s 40 year red line was established in summer 2013. A final decision on which reactors will be shut down is expected by March 2016.
Reactors in Japan at risk for decommissioning
Kansai Electric is not taking the listing of its Takahama units 1 & 2 for closure lying down. The units are big, 826 MW each, and hit the 40 year mark just this year. The utility, after some hesitation, appears to have decided to push for restart of the two units based on the amount of power they produce and the fact that like their American counterparts, a 20 year license extension is both technically feasible and financially necessary.
New nukes for old?
As to whether the government will replace the aging reactors it shuts down, the powerful Ministry of Economy, Trade, and Industry (METI) says it is considering a policy of completing reactors that were under construction at the time of the Fukushima disaster and building new units.
An interim report that was cited in the Japan Times English language newspaper on 12/25/14 says;
“Without a clear future for our nation’s nuclear power, including how to make up for electricity supply that would be lost as a result of reactor decommissioning, [it will be difficult to decide whether to scrap reactors.”
At a news conference, Yojiro Hatakeyama (right), the lead official for the nuclear report, said;
“Market liberalization does not necessarily deliver everything we need.”
Expanding on his remarks, Hatakeyama said that the government needs to consider financial support for new reactors because while they have a higher initial cost, they have a longer operating time.
He cited the UK government’s price support system for the Hinkley power plant which sets a price floor for electricity produced by its reactors thus offering investors predictable returns over the life cycle of the units.
The report says the government needs to full engage with the issue of whether to build new reactors and not wait to be overtaken by events. While the report takes pains to say the government has not set new policy on replacement of aging reactors, it is a clear sign of economic handwringing at the prospects of not having reliable power for the nation’s heavy industry and its export driven economy.
This is not just another government report by a mid-level appointed bureaucrat. Hatakeyama is very influential being related to the late Kiichi Miyazawa, who is his uncle and former Prime Minister of Japan.
He is graduate of the University of Tokyo’s Faculty of Law, Mr. Miyazawa completed his Master’s in Public Administration (MPA) from Harvard University’s John F. Kennedy School of Government.
Since 2010, Mr. Miyazawa has been a member of the House of Councilors representing Hiroshima Prefecture in the upper house of the National Diet of Japan. He first won election to public office in 2000 to the House of Representatives, the lower house of the National Diet, representing the constituents of Hiroshima’s 7th district.
It follows that this may be a government official to watch as METI works through the development of the nation’s energy policies and the role of nuclear energy in them.
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