Toshiba's woes an opportunity for Japan to change energy policy?

February 15, 2017

Toshiba’s woes weigh heavily on government’s ambition to sell Japan’s nuclear technology

http://www.japantimes.co.jp/news/2017/02/15/national/toshibas-woes-weigh-heavily-governments-ambition-sell-japans-nuclear-technology/#.WKQrfvKDmos

by Eric Johnston

Staff Writer

OSAKA – Toshiba’s announcement that it will write down nearly ¥712.5 billion in losses involving its U.S. nuclear unit, Westinghouse, is seen as a major setback for the government’s strategy of selling Japanese nuclear power technology abroad.

Over the past four years, Prime Minister Shinzo Abe, the Ministry of Economy, Trade, and Industry, and nuclear power players, such as Toshiba/Westinghouse, General Electric-Hitachi and Mitsubishi Heavy Industries, have promoted Japanese nuclear reactor technology worldwide.

Attempts to increase exports came even as concern within Japan grew over nuclear safety following a triple meltdown at the Fukushima No. 1 plant in the wake of the March 11, 2011 earthquake and tsunami. The efforts also came as questions were being raised about the total cost of nuclear power compared with other energy sources.

Japanese firms have attempted, with little success, to sell their technologies in countries as diverse as France, Vietnam, India, Turkey, Hungary, Poland, Slovakia, the Czech Republic and the United Arab Emirates. In June 2016, Toshiba said its goal was to win orders for 45 or more nuclear reactors overseas by 2030.

But Tuesday’s announcement by Toshiba came a few weeks after the company announced it would not take any new construction orders for nuclear reactors, and that it would focus instead on maintenance and decommissioning operations.

That decision effectively ended a decade-long effort by Toshiba, which began when it acquired a majority stake in Westinghouse in 2006, to make nuclear reactors a viable export business.

It follows greater than projected construction costs for four Westinghouse AP1000 next-generation nuclear reactors in the U.S. that have run billions of dollars over budget and are three years behind schedule. Original plans called for their startup around 2019 but that could be delayed.

Yoshimitsu Kobayashi, chairman of the Japan Association of Corporate Executives, told reporters at a regular news conference on Tuesday that promoting nuclear reactor exports was a necessary strategy, but one that needed to be reviewed.

“The nuclear power industry requires huge amounts of money for safety,” Kobayashi said.

“Given such high costs, we have to think about whether just one company can succeed. We have to keep strong technology in Japan, but we need to rethink how to create a union of private firms” in the nuclear business, he said.

But with Toshiba’s problems and the growing use worldwide of other, cheaper energy sources, including some renewables, anti-nuclear groups see an opportunity for Japan to change its basic policy.

“The Japanese government’s nuclear export policy was built on a combination of a poor understanding of the global energy market and self-delusion, said Shaun Burnie, a senior nuclear specialist at Greenpeace Germany who is currently based in Japan.

“The sooner the government and industry realize there is no future for nuclear power either domestically or in exports, the sooner they can concentrate on the energy technology of the future — renewables.”