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How to justify exporting nukes

September 9, 2013

Reactor makers look abroad as home market fizzles

Staff Writer



The Fukushima meltdowns and the continuing radiation crisis may have turned the public off of atomic energy at home, but it’s full steam ahead for Prime Minister Shinzo Abe and Japan’s heavy industries when it comes to exporting that technology to power-hungry economies abroad.

The marketing push being led by Abe and his Liberal Democratic Party, which brought Japan into the nuclear age, has angered nuclear protest groups, which, like many members of the public, blame the party’s cozy ties with big business for setting the stage for the Fukushima meltdown debacle.

Here are some questions and answers about Japan’s nuclear technology exports:

How does the process of exporting nuclear plants work?

Landing a contract to build an atomic plant overseas is more complex than a typical business deal because it requires political involvement: The governments of the exporting and host nations must conclude a nuclear cooperation pact to ensure the technology will only be used for peaceful purposes.

Because nuclear technology has weapons potential, strict international laws are applied to its export and import. This means reactor manufacturers must have politicians on their side to pave the way for entering overseas markets.

Once an accord is signed, it is basically an open bid. But in some cases, especially with countries that do not have their own advanced technology, national leaders get involved in the process to offer safety assurances and special deals to boost their companies’ bids.


What nuclear cooperation pacts has Japan joined?

The country to date has entered accords with the United States, the United Kingdom, Canada, Australia, France, China, the European Atomic Energy Community (consisting of 28 EU members), Kazakhstan, South Korea, Vietnam, Jordan and Russia.

Abe has recently signed pacts with Turkey and the United Arab Emirates that will be finalized once they are approved by the Diet.

Japan is also approaching Brazil, South Africa and India.

Has Japan been exporting reactors?

Not yet. Japan hasn’t exported a single domestically built reactor yet because it’s a late-comer to the global nuclear power market.

That changed quickly in October 2006, when Toshiba Corp. succeeded with its blockbuster acquisition of U.S.-based reactor maker Westinghouse Electric Co., kicking off a string of other tie-ups with Japanese companies.

In 2009, Toshiba won an order for two reactors in Texas. In 2010, Vietnam effectively chose Japan for a roughly ¥1 trillion nuclear plant project, although the manufacturer hasn’t been selected yet. Hitachi Ltd. subsidiary Horizon Nuclear Power plans to build two or three reactors on Anglesey Island in Wales in the early 2020s.

In May, Abe visited Turkey and signed a deal to build a sprawling nuclear plant on the Black Sea coast. The deal will be given to a Japanese-French consortium that includes Mitsubishi Heavy Industries Ltd, which also builds reactors.

Who are Japan’s rivals?

Because nuclear power is complex and sensitive, there are not many competitors.

Japan has three major reactor makers — Toshiba, Hitachi and MHI, who are all looking to expand overseas. The three firms are partnering with overseas makers to get ahead of the competition.

Toshiba bought Westinghouse, Hitachi is allied with U.S. giant General Electric Co., and Mitsubishi Heavy is working with Areva SA, France’s biggest nuclear power company.

South Korea has Doosan Heavy Industries, while Russia runs the state-owned Rosatom Nuclear Energy State Corp.

Is nuclear power use expected to grow on a global scale?

Apparently, yes. There are about 400 reactors worldwide, and the Ministry of Economy, Trade and Industry projects that 90 to 370 new reactors will be built by 2030 to support rapid economic growth in emerging countries.

Given the expected increase, is exporting nuclear plants a promising business?

That’s actually debatable.

“I think it will be very challenging (for Japanese makers) to keep their nuclear power business strong,” said Hitoshi Ikuma, an executive and energy expert at Japan Research Institute.

Ikuma noted that the number of nuclear power plants is expected to grow worldwide, and if Japanese makers compete successfully, it will benefit the nation. But the situation for the domestic nuclear industry has changed drastically since the Fukushima crisis.

In the five decades before the Fukushima disaster, 54 reactors had been built to achieve the government’s goal of securing stable sources of affordable energy to ease its dependence on overseas energy imports. Things were going relatively well, Ikuma said.

Three meltdowns later, the nation now faces the prospect of having to cut its dependence on atomic power.

Since there is little likelihood of new reactors being built, reactor makers are looking to sell their technology abroad while maintaining state-of-the-art equipment, but this means engaging in more atomic diplomacy to forge cooperation pacts.

Then there’s the matter of competition, not only among themselves but from their Korean and Russian rivals as well.

“It’s hard for the manufacturers to predict for certain that they can land deals even if the government backs them,” said Ikuma.

A Toshiba spokesman said that his group now feels confident it can be a major global player with world-renowned Westinghouse under its wing.

In light of the Fukushima fiasco, some may question why anyone would want to import reactors from Japan, but Ikuma said Japan was exporting other electricity generating technology, including thermal power plants, long before the disaster, proving their quality and earning buyers’ trust.

The crisis at the poorly protected 40-year-old Fukushima plant was more a failure of governance than manufacturing, he said.

What are the risks involved in exporting plants and reactors?

Ikuma expressed concern that if more and more atomic plants are built in emerging economies, there is a greater risk of crises.

He noted that Chernobyl, Three Mile Island and Fukushima all happened in countries whose nuclear technology was considered top class.

“I think that exporting plants and reactors to countries that do not have their own technology to build such equipment increases the risk of accidents,” he said.

When signing contracts with overseas customers, the Japanese side will probably have to stipulate the extent to which it will bear liability in the event of a crisis, but this may not cover any notion of moral responsibility, Ikuma said.


The Weekly FYI appears Tuesdays. Readers are encouraged to send ideas, questions and opinions to


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