Focusing on nukes will lead Japan nowhere

December 25, 2018

Editorial: Japan must ditch nuclear plant exports for global trends in renewable energy

https://mainichi.jp/english/articles/20181225/p2a/00m/0na/011000c

Projects to export nuclear power plants, a pillar of the "growth strategy" promoted by the administration of Prime Minister Shinzo Abe, appear to be crumbling.

• 【Related】Hitachi may freeze British nuclear project due to swelling costs
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Factors behind the failures include ballooning construction costs due to strengthened safety standards after the triple core meltdowns at Tokyo Electric Power Co.'s (TEPCO) Fukushima Daiichi Nuclear Power Station in March 2011, and growing anti-nuclear sentiments around the world.

Nothing else can be said but that the export projects have effectively failed. The prime minister's office and the Ministry of Economy, Trade and Industry must bear the responsibility of continuing to promote these exports despite a massive change in the attitude toward nuclear power plants.

"We are really stretched to our limit," Hitachi Chairman Hiroaki Nakanishi recently said of the company's nuclear power plant construction plan in Britain. The statement came at a regular press conference of the Japan Business Federation, or Keidanren, indicating that continuing the project is not feasible.

Hitachi coordinated closely with the Japanese government to advance the U.K. project. The company was to build two nuclear power reactors in midwestern Britain through a local subsidiary, and to start operating the facilities in the first half of the 2020s.

But, the total estimated cost of the project has skyrocketed from the initial figure of 2 trillion yen to 3 trillion yen due to growing safety measure costs. Hitachi, hoping to distribute financial risk, sought investments from major power utilities and other firms, but the negotiations hit a snag due to the lowered profitability of the project.

In a bid to secure profits at an early stage, Hitachi requested that the British government raise the price of the electricity to be generated by the plants, which was guaranteed to be purchased in advance. This arrangement also hit a wall as confusion spread in the British political sphere over the nation's planned exit from the European Union. Hitachi, which has a stake in the local subsidiary, would lose some 300 billion yen if the project was cancelled.

Similar trouble has arisen in Turkey. A plan to export nuclear power plants, which began from a close relationship between Prime Minister Abe and Turkish President Recep Tayyip Erdogan, has also run aground.

Under the original plan, Mitsubishi Heavy Industries and other businesses were to build four midsized reactors in Turkey along the coast of the Black Sea at a total estimated cost of 2.1 trillion yen. The amount has more than doubled to 5 trillion yen, due in part to increased cost estimates for earthquake-proof measures. This development now requires the Japanese and Turkish governments to extend additional financial support for the project, but the two sides have apparently failed to reach an agreement.

The Abe administration has thrown its weight behind the export of nuclear power plants as a major element of its economic "growth strategy," with the trade ministry choreographing the moves for the projects. The ministry regards nuclear power generation as one of the main sources of power generation, always protecting and promoting the nuclear power industry.

However, after the Fukushima nuclear disaster in 2011, building such plants within Japan has become difficult, and the ministry hoped to maintain the size of the nuclear power industry through exports and the transference of relevant technologies and human resources to the next generation. But this has ignored the fact that international trends have shifted since the disaster.

The construction cost for nuclear power plants has grown exponentially with the increased focus on safety measures, while renewable energy sources such as solar power have become cheaper with the rapid expansion of their use. As such, the relative price competitiveness for nuclear power reactors has declined; it can no longer be called an "inexpensive energy source."

According to the International Energy Agency (IEA), global investments for new nuclear power plant construction in 2017 dropped to 30 percent of the previous year's figure. Global policy is moving away from nuclear power plants and instead tipping toward renewable energy sources.

The failure to reflect this trend led to the huge losses incurred by Toshiba Corp., which bought Westinghouse Electric Co. with backing from the trade ministry to pursue its troubled nuclear power projects in the United States.

In 2012, a national referendum in Lithuania voted down a project to build a Hitachi nuclear power plant, and then in 2016, Vietnam scrubbed a similar construction plan. The same year, Japan signed a nuclear cooperation agreement with India, eyeing exports of nuclear power plants despite concerns about the proliferation of nuclear materials to the nuclear weapon state outside of the Nuclear Non-proliferation Treaty. Still, the export plan has yet to materialize. It is clear that the export of nuclear power plants has been backed into a corner for quite some time already.

It is Japan that caused one of the world's worst nuclear accidents, and is now working on decommissioning the damaged reactors in a process that will take decades to complete. Many people in Japan hold deeply rooted feelings against the government's placement of nuclear power plant exports as a pillar of the nation's growth strategy.

In response, the government has simply justified the projects by saying they will contribute to developing countries with a growing power demand by offering a cheap source of power to support their economic growth. Rising construction costs, however, has rendered this explanation moot.

Japan still has many nuclear power plants to run, and the decommissioning of older plants will soon be in full-swing. The latest technology and skilled experts are vital for these projects to be completed successfully.

Continuing to focus on nuclear power export, however, will lead Japan nowhere. The government should take another look at global trends, and review the basis of its nuclear power policy to rid Japan of nuclear power as soon as possible.