Updating costs of various energy sources

January 2, 2015

Gov't to update estimates of different energy source costs

http://mainichi.jp/english/english/newsselect/news/20150102p2a00m0na008000c.html

The Ministry of Economy, Trade and Industry will begin work in January to update the estimated costs of different types of energy sources, numbers which will factor into the government's planned energy mix for 2030.

The manner in which costs that have accompanied the Fukushima No. 1 Nuclear Power Plant disaster are reflected in the estimates is expected to be a central point of the debate.

The estimates are planned to be put together within this fiscal year by an expert committee set up in an advisory body to the ministry. They will calculate the kilowatt hour cost of different types of energy, based on factors such as plant construction cost, fuel cost and amount of power produced.

The last time these power costs were estimated was in December 2011, under the rule of the Democratic Party of Japan. A committee set up in the Cabinet Secretariat then calculated the costs for 2010, and added in accident response costs for nuclear power after the Fukushima disaster. They concluded that nuclear power costs at least 8.9 yen per kilowatt hour, a jump of around 50 percent from the 5.9 yen estimate of 2004. The new estimate put the cost of nuclear power on par with the costs of coal power -- which was from 9.5 yen to 9.7 yen per kilowatt hour -- and those of liquid natural gas, which was from 10.7 to 11.1 yen per kilowatt hour.

For the 2011 nuclear cost estimate, costs for paying compensation for the Fukushima disaster, removing radiation and decommissioning its reactors were estimated at 5.8 trillion yen, and each jump of a trillion yen in costs was calculated to add 0.1 yen to the kilowatt hour cost. Currently, the actual costs have ballooned to around 10 trillion yen, which should raise the kilowatt hour cost in the new estimates accordingly.

Major power companies have also invested a total of over 2 trillion yen on construction to meet new safety requirements enacted in July 2013, in an aim to restart their halted nuclear reactors.

The previous estimate put the cost of reprocessing spent nuclear fuel and disposing of high radiation waste from the nation's reactors at around 19 trillion yen. The new estimate for these costs is likely to be a point of contention.

Regarding renewable energy sources, the previous estimate put the cost of land-based wind power at 9.9 to 17.3 yen per kilowatt hour, and the cost of solar panels for houses at 33.4 to 38.3 yen per kilowatt hour. Those estimates do not include the feed-in tariff system for renewable energy introduced in July 2012 and costs for building and strengthening power lines needed for expanding solar and wind power. The new numbers for these power sources are yet another part of the new estimates likely to be the focus of debate.