” The cost of cleaning up Tokyo Electric Power’s wrecked Fukushima Daiichi nuclear plant may rise to several billion dollars a year, the Japanese government said on Tuesday, adding that it would look into a possible separation of the nuclear business from the utility.
A possible move to spin off Tepco’s nuclear business into a subsidiary could make it easier to sell or merge it with other companies in the future.
Government officials said the possible move, discussed at a panel meeting on Tuesday, is in line with Tepco’s plan to look into all possibilities for its businesses.
The decommissioning costs for Fukushima plant may rise significantly from less $800 million per year now, as works to remove nuclear fuel debris push up costs, the industry ministry said in documents prepared for the panel tasked with devising a viable financial plan for Tepco.
Surging costs are being addressed by the panel but it is also looking into options including a break up of Tepco, which is under state control after an earthquake and tsunami sparked meltdowns at the Fukushima reactors in March 2011.
“A combination among nuclear operators is one possibility,” Yojiro Hatakeyama, a director at the industry ministry overseeing the electricity and gas industries, told reporters.
Experts say any move to merge atomic operations is likely to meet strong resistance from Japan’s other nuclear operators.
Tepco has been struggling with rising costs at its Fukushima plant nearly six years after the world’s worst nuclear disaster since Chernobyl.
Japan’s Minister of Economy, Trade and Industry, Hiroshige Seko, told reporters after the panel’s second meeting the government will provide a firmer estimate for decommissioning costs for the nuclear plant by the end of the year.
Japan has 10 nuclear operators and all have been hit by the political fallout from the disaster, which has undermined public faith in atomic energy. All but two of Japan’s 42 reactors are in shut-down mode.
Tepco shares ended up 0.7 percent, in line with the general market.
The briefing material for the panel said the clean-up may require several hundred billion yen per year, or several billion U.S. dollars, compared with 80 billion yen ($766 million) now.
Hatakeyama did not elaborate on the government’s estimate for total decommissioning costs.
The estimates are likely to surge when it is decided how to extract melted uranium fuel debris at the plant in 2018 or 2019, a person with direct knowledge of discussions on restructuring Tepco said earlier this month.
The meltdown of the three reactors released radiation over a wide area, contaminating water, food and air, and forcing more than 160,000 people to be evacuated.
Dismantling the reactors is expected to take about 40 years, but Tepco is still struggling to contain radioactive water from the plant and has said it cannot predict the eventual total costs of the clean-up and decommissioning.
Tepco wants the government to consider introducing rules to avoid having to book a single huge exceptional loss as soon as cost estimates for decommissioning become clearer, a person familiar with the situation said earlier. ”
by Kentaro Hamada and Osamu Tsukimori