February 27, 2021

Japan’s Nuclear Future in the Balance

Prime Minister Naoto Kan and other government officials said over the weekend that Japan would not abandon nuclear power as an important energy source.

But many experts say it will now be difficult for Japan to realize a policy goal that predates the Fukushima disaster: building at least 14 new reactors by 2030, to go with the 54 that exist now. If completed, those plants would raise nuclear power’s share of Japanese electricity generation to about 50 percent, from nearly 30 percent now.

Advocates for renewable energy argue that the March earthquake, tsunami and nuclear accident have given the nation a reason to rebuild its economy as a world leader in clean, renewable energy — even though solar, wind and geothermal combined now account for only 1 percent of Japan’s electricity. An additional 8 percent or so comes from hydroelectric power.

“It is a battle between the future and the past,” said Tetsunari Iida, executive director of the Institute for Sustainable Energy Policies, a nonprofit policy research organization here.

Some members of Parliament recently held a forum, called Energy Shift Japan, to promote a move toward renewable sources.

And Masayoshi Son, the founder of Softbank and Japan’s richest man, said last month that he would donate about $12 million to start a research foundation for renewable energy. Continued reliance on atomic energy, he told a news conference, “would be a sin against our children, grandchildren and future generations.”

Those more attuned to the official government position, however, contend that renewable energy is too costly and requires too much land in this crowded country, leaving Japan little choice but to continue hitching its future to atomic energy, with fossil fuels filling any gap. “In the midterm, up to 2030, we cannot see the technological breakthrough that will allow us to get rid of nuclear power,” said Masakazu Toyoda, chief executive of the Institute of Energy Economics, Japan.

Even so, the future of the envisioned 14 reactors being planned is now unclear, with the public and local officials becoming more wary about living near such facilities. Already, the Tokyo Electric Power Company has been forced to drop plans to build two new reactors on the site of the crippled Fukushima Daiichi plant.

And just last Friday, the government requested that another utility, Chubu Electric Power, shut down a nuclear power plant 120 miles southwest of Tokyo until the company can fortify its earthquake and tsunami defenses. On Monday, the company said it would comply. The company said on Monday that it would comply with that request. So many reactors have been shut down because of the earthquake or other factors, that soon only about 43 percent of Japan’s 49 megawatts of nuclear capacity will be operational, according to Reuters.

Japan’s heavy dependence on nuclear power stems from its energy insecurity. With virtually no oil and natural gas of its own, it is almost totally reliant on imported fossil fuels, making the nation vulnerable to disruptions, for example any that might arise from unrest in the Middle East. And the cost of imported fossil fuels has risen from the equivalent of 1 percent of Japan’s gross domestic product in 1998 to almost 5 percent now.

Japan also imports uranium. But because the fuel is easier to stockpile than oil and gas, the government considers nuclear energy a quasi-domestic source. Atomic energy, to the extent it replaces fossil fuels, also reduces greenhouse gas emissions and is a little less expensive than energy from fossil fuels, according to the government.

Over the decades, nuclear power has been fostered by a close alliance between the government, electric companies and reactor manufacturers. Nuclear plants, as large, centralized sources of power, have helped Japan’s 10 main electric utilities maintain their control over the power grid.

The advent of a so-called smart grid that would handle power supplied by numerous small producers could threaten the utilities’ dominance. “What they want to do as much as possible is to keep distributed power off the agenda,” said Andrew DeWit, an expert on Japan’s energy policy at Rikkyo University.

While others beside the electric companies can generate electricity, so far this has not caught on in a big way. Now, though, some are calling for more competition in power production in an effort to spur innovation and bring down prices.

The government and power companies have not totally ignored renewable energy, but critics say they have not been aggressive enough. Over all, Ernst Young ranks Japan 15th in the world in terms of attractiveness of its renewable energy markets and policies.

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Japan Weighs Nationalizing Stricken Utility

TOKYO — Japanese lawmakers publicly debated nationalizing Tokyo Electric Power Company on Tuesday, as there seemed no end in sight to the problems at the company’s crippled nuclear power plant.

The prime minister’s office said the government was not considering a takeover of Tokyo Electric “at the moment.” But the plunging stock price indicated investors were abandoning hope that the company could cope with the cost of its rebuilding and the still unfathomable potential liabilities from its nuclear disaster.

The share price plunged an additional 19 percent Tuesday with virtually no buyers, before activating an automatic stop.

The closing price of 566 yen, or $6.93, was the stock’s lowest close since at least 1974. The day before the March 11 earthquake, the shares had closed at 2,153 yen — or $26.36. The stock collapse has already erased more than 2.5 trillion yen ($30.61 billion) in market value.

“There’s room for debate on the future of Tokyo Electric,” Koichiro Gemba, a member of the lower house of Parliament, said at a news conference. Mr. Gemba represents Fukushima Prefecture, where Tokyo Electric’s damaged plant, Fukushima Daiichi, is located. He is also the national strategy minister in the cabinet of Prime Minister Naoto Kan.

Mr. Gemba spoke not long after the country’s largest newspaper, Yomiuri Shimbun, cited unidentified people as saying the government was considering a plan to temporarily acquire a majority stake in the company, help it shoulder the liabilities that are likely to be incurred from the nuclear accident, and then eventually take it private once again.

But fearing that a debate about the future of the company could create a divisive and costly distraction at a time of crisis, Mr. Kan and his chief spokesman, Yukio Edano, sought to tamp down the speculation.

“At the moment, the government is not considering” nationalization, Mr. Edano said Tuesday at a televised news conference. He added: “The first priority is the accident response. Then it needs to help those who’ve been affected.”

If the government were to acquire a majority stake, Tepco — as the company is known — would presumably issue new stock to the state, diluting existing shareholders.

The utility’s image has been hurt by the rolling blackouts it has instituted to cope with the loss of generating capacity after the earthquake and by the fact that its president, Masataka Shimizu, was invisible for several days after the quake. Tepco said Monday that Mr. Shimizu had been sick but had since returned to work.

Taxpayers outside the greater Tokyo area that the company serves are likely to balk at the cost of what could be seen as a bailout.

But with no end in sight to its nuclear problem, Tokyo Electric will have to lean on the state for support, analysts say.

“If you were the government, would you let it go bust?” said Paul J. Scalise, a former financial analyst who is writing a book on Japan’s electric power system. “I think the answer is no. The effect on the larger economy at a critical time would be too great.”

Estimates in the Japanese news media had already put the damage from the radiation leak to local homes, businesses and farms in the trillions of yen, even without knowing if anyone would suffer health damage. But it is impossible to calculate what the ultimate cost to the company will be. That is partly because the crisis appears to be far from over, and partly because it is not clear how much of the liability will actually be Tepco’s to bear.

Mr. Scalise said that under Japanese law governing compensation for nuclear damage, companies are liable for the cost of all nuclear accidents resulting from reactor operations except when the accidents are provoked by a “grave natural disaster of an exceptional nature or by an insurrection.” The company might plausibly seek to avoid liability altogether within that definition, he said.

Nicholas Benes, head of the Board Director Training Institute of Japan, said Tepco’s legal liability related to the Fukushima Daiichi plant would be covered by private and government insurance up to 120 billion yen, and even over that amount the government had wide latitude to provide financial assistance.

“I just don’t see the case for nationalization at this point,” Mr. Benes said. “Unless it’s for safety reasons — for example if you think the company is utterly incapable of managing itself. But even then you’d have to assume that a bunch of nuclear engineers put together hodge-podge by the government would do a better job than the company’s own management. I don’t think the bureaucrats possibly believe that, or would want the responsibility.”

He and others said that Mr. Kan might also prefer to keep the company at arm’s length to avoid having it serve as a lightning rod for criticism of his administration.

Kazuma Ogino and Toshihiro Uomoto, credit analysts at Nomura Securities, suggested in a report that what was under discussion might best be described as “a virtual nationalization,” in which the state would provide the company “with the means of paying compensation on almost all fronts.”

If the state is going to end up paying most of the cost anyway, they wrote, “it would make more sense to temporarily nationalize Tepco” to “move ahead with the recovery work, rather than just paying compensation.”

The decline in the stock does not immediately endanger Tepco’s survival, although its cost of capital is tied to its share price. Tepco is in negotiations for loans of as much as 2 trillion yen ($24.49 billion), a person close to potential lenders said last week.

In any case, Mr. Benes said it was probable that senior executives would be ousted if Tepco were nationalized or received some sort of government bailout. “It’s not necessarily an admission of fault or negligence,” he said. “It’s just what society demands, ritualistically, so as to move on.”

Article source: http://feeds.nytimes.com/click.phdo?i=6cd825bac66361b66559cd9c2daaabc5