Tepco mandated to create fund for scrapping Fukushima plant — The Japan Times

” The Diet passed a bill Wednesday requiring Tokyo Electric Power Company Holdings Inc. to put aside extra funds to decommission its crisis-hit Fukushima nuclear power plant, as the state seeks to gain more financial control over the utility.

Under the revised law, the state-backed Nuclear Damage Compensation and Decommissioning Facilitation Corp. will also be involved in the decommissioning process.

Currently, Tepco has been using profits to pay for scrapping the Fukushima No. 1 plant, which was destroyed after a 2011 earthquake and tsunami triggered a triple meltdown.

The revised law is expected to take effect later this year. With the estimated cost of the decommissioning work already surging to ¥8 trillion from the previously forecast ¥2 trillion, a government panel has called for setting up a funding system that is not dependent on the company’s financial health.

The government projects the total cost to deal with the Fukushima nuclear disaster will reach ¥21.5 trillion, including decommissioning costs, compensation and decontamination work.

Under the new program, the state-backed organization will decide on the amount Tepco should store away each business year and the industry minister must approve it.

The utility must also formulate a financial plan and obtain the minister’s approval when it uses the reserve fund for its decommissioning work.

The new law will strengthen the monitoring power of authorities as well, enabling the industry ministry and the organization to conduct on-site inspections to check whether Tepco is putting aside the money.

The government has a major say in the utility’s operations after acquiring 50.1 percent of the company’s voting rights. Tepco faces huge compensation payments and decommissioning costs among other problems due to the 2011 disaster.

The industry ministry has projected roughly ¥300 billion will be needed annually for the next 30 years to complete the scrapping of the power plant, which involves the difficult procedure of extracting nuclear debris.

The costs could grow further. A study by a Tokyo-based private think tank has shown the bill for the decommissioning could balloon to between ¥11 trillion and ¥32 trillion assuming materials from the No. 1 to 3 reactors, which suffered core meltdowns, need to be specially treated for radioactive waste.

The Japan Center for Economic Research estimated the total cost of managing the disaster could reach ¥70 trillion, more than three times the government calculation. ”

by Kyodo, The Japan Times

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Six years after Fukushima, much of Japan has lost faith in nuclear power — The Conversation

” Six years have passed since the Fukushima nuclear disaster on March 11, 2011, but Japan is still dealing with its impacts. Decommissioning the damaged Fukushima Daiichi nuclear plant poses unprecedented technical challenges. More than 100,000 people were evacuated but only about 13 percent have returned home, although the government has announced that it is safe to return to some evacuation zones.

In late 2016 the government estimated total costs from the nuclear accident at about 22 trillion yen, or about US$188 billion – approximately twice as high as its previous estimate. The government is developing a plan under which consumers and citizens will bear some of those costs through higher electric rates, taxes or both.

The Japanese public has lost faith in nuclear safety regulation, and a majority favors phasing out nuclear power. However, Japan’s current energy policy assumes nuclear power will play a role. To move forward, Japan needs to find a new way of making decisions about its energy future.

Uncertainty over nuclear power

When the earthquake and tsunami struck in 2011, Japan had 54 operating nuclear reactors which produced about one-third of its electricity supply. After the meltdowns at Fukushima, Japanese utilities shut down their 50 intact reactors one by one. In 2012 then-Prime Minister Yoshihiko Noda’s government announced that it would try to phase out all nuclear power by 2040, after existing plants reached the end of their 40-year licensed operating lives.

Now, however, Prime Minister Shinzo Abe, who took office at the end of 2012, says that Japan “cannot do without” nuclear power. Three reactors have started back up under new standards issued by Japan’s Nuclear Regulation Authority, which was created in 2012 to regulate nuclear safety. One was shut down again due to legal challenges by citizens groups. Another 21 restart applications are under review.

In April 2014 the government released its first post-Fukushima strategic energy plan, which called for keeping some nuclear plants as baseload power sources – stations that run consistently around the clock. The plan did not rule out building new nuclear plants. The Ministry of Economy, Trade and Industry (METI), which is responsible for national energy policy, published a long-term plan in 2015 which suggested that nuclear power should produce 20 to 22 percent of Japan’s electricity by 2030.

Meanwhile, thanks mainly to strong energy conservation efforts and increased energy efficiency, total electricity demand has been falling since 2011. There has been no power shortage even without nuclear power plants. The price of electricity rose by more than 20 percent in 2012 and 2013, but then stabilized and even declined slightly as consumers reduced fossil fuel use.

Japan’s Basic Energy Law requires the government to release a strategic energy plan every three years, so debate over the new plan is expected to start sometime this year.

Public mistrust

The most serious challenge that policymakers and the nuclear industry face in Japan is a loss of public trust, which remains low six years after the meltdowns. In a 2015 poll by the pro-nuclear Japan Atomic Energy Relations Organization, 47.9 percent of respondents said that nuclear energy should be abolished gradually and 14.8 percent said that it should be abolished immediately. Only 10.1 percent said that the use of nuclear energy should be maintained, and a mere 1.7 percent said that it should be increased.

Another survey by the newspaper Asahi Shimbun in 2016 was even more negative. Fifty-seven percent of the public opposed restarting existing nuclear power plants even if they satisfied new regulatory standards, and 73 percent supported a phaseout of nuclear power, with 14 percent advocating an immediate shutdown of all nuclear plants.

Who should pay to clean up Fukushima?

METI’s 22 trillion yen estimate for total damages from the Fukushima meltdowns is equivalent to about one-fifth of Japan’s annual general accounting budget. About 40 percent of this sum will cover decommissioning the crippled nuclear reactors. Compensation expenses account for another 40 percent, and the remainder will pay for decontaminating affected areas for residents.

Under a special financing scheme enacted after the Fukushima disaster, Tepco, the utility responsible for the accident, is expected to pay cleanup costs, aided by favorable government-backed financing. However, with cost estimates rising, the government has proposed to have Tepco bear roughly 70 percent of the cost, with other electricity companies contributing about 20 percent and the government – that is, taxpayers – paying about 10 percent.

This decision has generated criticism both from experts and consumers. In a December 2016 poll by the business newspaper Nihon Keizai Shimbun, one-third of respondents (the largest group) said that Tepco should bear all costs and no additional charges should be added to electricity rates. Without greater transparency and accountability, the government will have trouble convincing the public to share in cleanup costs.

Other nuclear burdens: Spent fuel and separated plutonium

Japanese nuclear operators and governments also must find safe and secure ways to manage growing stockpiles of irradiated nuclear fuel and weapon-usable separated plutonium.

At the end of 2016 Japan had 14,000 tons of spent nuclear fuel stored at nuclear power plants, filling about 70 percent of its onsite storage capacity. Government policy calls for reprocessing spent fuel to recover its plutonium and uranium content. But the fuel storage pool at Rokkasho, Japan’s only commercial reprocessing plant, is nearly full, and a planned interim storage facility at Mutsu has not started up yet.

The best option would be to move spent fuel to dry cask storage, which withstood the earthquake and tsunami at the Fukushima Daiichi nuclear plant. Dry cask storage is widely used in many countries, but Japan currently has it at only a few nuclear sites. In my view, increasing this capacity and finding a candidate site for final disposal of spent fuel are urgent priorities.

Japan also has nearly 48 tons of separated plutonium, of which 10.8 tons are stored in Japan and 37.1 tons are in France and the United Kingdom. Just one ton of separated plutonium is enough material to make more than 120 crude nuclear weapons.

Many countries have expressed concerns about Japan’s plans to store plutonium and use it in nuclear fuel. Some, such as China, worry that Japan could use the material to quickly produce nuclear weapons.

Now, when Japan has only two reactors operating and its future nuclear capacity is uncertain, there is less rationale than ever to continue separating plutonium. Maintaining this policy could increase security concerns and regional tensions, and might spur a “plutonium race” in the region.

As a close observer of Japanese nuclear policy decisions from both inside and outside of the government, I know that change in this sector does not happen quickly. But in my view, the Abe government should consider fundamental shifts in nuclear energy policy to recover public trust. Staying on the current path may undermine Japan’s economic and political security. The top priority should be to initiate a national debate and a comprehensive assessment of Japan’s nuclear policy. ”

by The Conversation

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Fukushima Bill — Asia Times

” Six years after Japan’s Fukushima nuclear accident three global nuclear corporations are fighting for their very survival.

The bankruptcy filing by Westinghouse Electric Co. and its parent company Toshiba Corp. preparing to post losses of ¥1 trillion (US$9 billion), is a defining moment in the global decline of the nuclear power industry.

However, whereas the final financial meltdown of Westinghouse and Toshiba will likely be measured in a few tens of billions of dollars, those losses are but a fraction of what Tokyo Electric Power Co. (Tepco) is looking at as a result of the Fukushima nuclear disaster.

If the latest estimates for the cost of cleaning up the Fukushima plant prove accurate, Tepco faces the equivalent of a Toshiba meltdown every year until 2087.

In November 2016, the Japanese Government announced a revised estimate for the Fukushima nuclear accident (decommissioning, decontamination, waste management and compensation) of ¥21.5 trillion (US$193 billion) – a doubling of their estimate in 2013.

But the credibility of the government’s numbers have been questioned all along, given that the actual ‘decommissioning’ of the Fukushima plant and its three melted reactors is entering into an engineering unknown.

This questioning was borne out by the November doubling of cost estimates after only several years into the accident, when there is every prospect Tepco will be cleaning up Fukushima well into next century.

And sure enough, a new assessment published in early March from the Japan Institute for Economic Research, estimates that total costs for decommissioning, decontamination and compensation as a result of the Fukushima atomic disaster could range between ¥50-70 trillion (US$449-628 billion).

Rather than admit that the Fukushima accident is effectively the end of Tepco as a nuclear generating company, the outline of a restructuring plan was announced last week.

Tepco Holdings, the entity established to manage the destroyed nuclear site, and the Nuclear Damage Compensation and Decommissioning Facilitation Corporation (NDF) are seeking ways to sustain the utility in the years ahead, confronted as they are with escalating Fukushima costs and electricity market reform.

The NDF, originally established by the Government in 2011 to oversee compensation payments and to secure electricity supply, had its scope broadened in 2014 to oversee decommissioning of the Fukushima Daiichi plant on the Pacific Ocean coast north of Tokyo.

The latest restructuring plan is intended to find a way forward for Tepco by securing a future for its nuclear, transmission and distribution businesses. If possible in combination with other energy companies in Japan.

But the plan, already received less than warmly by other utilities rightly concerned at being burdened with Tepco’s liabilities, is premised on Fukushima cost estimates of ¥21.5 trillion — not ¥50-70 trillion.

To date Tepco’s Fukushima costs have been covered by interest-free government loans, with ¥6 trillion (US$57 billion) already paid out. Since 2012 Tepco’s electricity ratepayers have paid ¥2.4 trillion to cover nuclear-related costs, including the Fukushima accident site.

That is nothing compared to the costs looming over future decades and beyond and it comes at a time when Tepco and other electric utilities are under commercial pressure as never before.

The commercial pressure comes from electricity market reform that since April 2016 allowed consumers to switch from the monopoly utilities to independent power providers.

Prior to the deregulation of the retail electricity market, Tepco had 22 million customers. As the Tepco president observed late last year “The number (of customers leaving Tepco) is changing every day as the liberalization continues … We will of course need to think of ways to counter that competition.”

Countering that competition shouldn’t mean rigging the market, yet Tepco and the other utilities intend to try and retain their decades long dominance of electricity by retaining control over access to the grid. This is a concerted push back against the growth of renewable energy.

Current plans to open the grid to competition in 2020, so called legal unbundling, are essential to wrest control from the big utilities.

The message of unbundling and independence, however, doesn’t seem to have reached the Ministry of Economy, Trade and Industry (METI) that oversees the electricity industry.

Current plans would allow Tepco to establish separate legal entities: Tepco Fuel & Power (thermal power generation), Tepco Energy Partner (power distribution) and Tepco Power Grid (power transmission).

Tepco Holdings will retain their stock and control their management, meaning the same monopoly will retain control of the grid. Where Tepco leads, the other nine electric utilities are aiming to follow.

Leaving the grid effectively still under the control of the traditional utilities will throw up a major obstacle to large scale expansion of renewable energy sources from new companies.

Such businesses will be ‘curtailed’ or stopped from supplying electricity to the grid when the large utilities decide it’s necessary, justified for example to maintain the stability of the grid.

The fact that ‘curtailment’ will be permitted in many regions without financial compensation piles further pain onto new entrants to the electricity market, and by extension consumers.

Further, METI plans to spread the escalating costs of Fukushima so that other utilities and new power companies pay a proportion of compensation costs. METI’s justification for charging customers of new energy companies is that they benefited from nuclear power before the market opened up.

The need to find someone else to pay for Tepco’s mess is underscored by the breakdown of the Fukushima disaster cost estimate in November.

When put at ¥22 trillion estimate, ¥16 trillion is supposed to be covered by Tepco. The Ministry of Finance is to offer ¥2 trillion for decontamination, and the remaining ¥4 trillion is to be provided by other power companies and new electricity providers.

The question is how does Tepco cover its share of the costs when it’s losing customers and its only remaining nuclear plant in Japan, Kashiwazaki Kariwa (the worlds largest), has no prospect of restarting operation due to local opposition?

What happens when Fukushima costs rise to the levels projected of ¥50-70 trillion?

The policy measures being put in place by Tepco, other utilities and the government suggests that they know what is coming and their solution for paying for the world’s most costly industrial accident will be sticking both hands into the public purse. ”

by Shaun Burnie, Asia Times

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Japan governor tells Tepco bosses nuclear plant to stay shut — Yahoo! News

” NIIGATA, Japan (Reuters) – The governor of Japan’s Niigata prefecture reiterated his opposition to the restart of Tokyo Electric Power’s (Tepco) Kashiwazaki-Kariwa nuclear plant, adding it may take a few years to review the pre-conditions for restart.

During a meeting on Thursday with Tepco Chairman Fumio Sudo and President Naomi Hirose, Governor Ryuichi Yoneyama, who was elected in October on his anti-nuclear platform, repeated his pledge to keep the plant shut unless a fuller explanation of the 2011 Fukushima nuclear disaster was provided.

He also said that evacuation plans for people in Niigata in case of a nuclear accident and the health impacts that the Fukushima accident have had would need to be reviewed before discussing the nuclear plant’s restart.

The restart of the Kashiwazaki-Kariwa plant, the world’s largest, is key to helping Tepco rebound from the aftermath of the 2011 disaster at its Fukushima-Daiichi plant.

The Japanese government last month nearly doubled its projections for costs related to the disaster to 21.5 trillion yen ($185 billion), increasing the pressure on Tepco to step up reform and improve its performance.

Many of Japan’s reactors are still going through a relicensing process by a new regulator set up after the Fukushima disaster, the world’s worst since Chernobyl in 1986.

Shutting the Kashiwazaki-Kariwa plant for additional years would mean that the company would have to continue relying heavily on fossil fuel-fired power generation such as natural gas.

Governors do not have the legal authority to prevent restarts but their agreement is usually required before a plant can resume operations.

Three reactors at Tepco’s Fukushima-Daiichi nuclear plant melted down after a magnitude 9 earthquake struck Japan in March 2011, triggering a tsunami that devastated a swathe of Japan’s northeastern coastline and killed more than 15,000 people. “

by Kentaro Hamada, Reuters

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Japan nearly doubles Fukushima disaster-related cost to $188 billion — Reuters

” Japan’s government on Friday nearly doubled its projections for costs related to the Fukushima nuclear disaster to 21.5 trillion yen ($188 billion), increasing pressure on Tokyo Electric Power (Tepco) (9501.T) to step up reform and improve its performance.

The new estimates could mean a heavier burden for Tepco and other utilities that are helping to pay the costs, and could result in higher power bills for consumers in the long run.

In 2013, the Ministry of Economy, Trade and Industry (METI) had calculated the costs of the Fukushima meltdowns at 11 trillion yen. METI boosted its estimate as industry experts now see decommissioning of the wrecked Fukushima reactors at 8 trillion yen, quadruple an earlier estimate of 2 trillion yen.

The new projection, part of a recommendation from a government panel considering the future of Tepco and Fukushima Daiichi, also calls for 7.9 trillion yen in reparations, up from 5.4 trillion yen, and 5.6 trillion yen for the treatment and storage of contaminated soil, up from 3.6 trillion yen.

“For now, we don’t expect the costs to increase further, but new developments and unforeseen factors mean there is a chance they could go higher,” METI Minister Hiroshige Seko told a press conference.

“Decommissioning technological innovation and a speedier clean up could help reduce costs and it is important that we put effort into that,” he said.

Tepco’s portion of the burden has more than doubled to 15.9 trillion yen from 7.2 trillion yen, while other major utilities will need to pay 3.7 trillion. New electric companies will have to shoulder 240 billion yen.

A METI official said the new projections of the decommissioning costs are an estimate based on certain assumptions and the costs of the Three Mile Island nuclear accident, and does not represent a loss Tepco needs to book. ”

by Yuka Obayashi and Kentaro Hamada

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Fukushima costs to soar to 20 trillion yen — Nikkei Asian Review

” TOKYO — The combined costs of paying compensation for the Fukushima nuclear disaster and the decommissioning of the plant’s reactors may be double the initial estimate, rising to more than 20 trillion yen ($176 billion), according to estimates by the country’s industry ministry.

At the end of 2013, the Ministry of Economy, Trade and Industry calculated the cost at 11 trillion yen, which has since become the government’s official estimate.

As electric companies other than Tokyo Electric Power Co., the operator of the crippled plant, will also pass part of the cost on to consumers through higher rates, an increase in the public burden is unavoidable.

According to multiple sources, the ministry has already conveyed its new estimates to members of its expert panel, which is in discussions on reforming the management structure at Tepco and measures to secure funds.

The ministry aims to reach an agreement with the Ministry of Finance during planned discussions over the expansion of an interest-free loan program from 9 trillion yen to support Tepco.

The 11-trillion estimates foresaw 5.4 trillion yen for compensation payments; 2.5 trillion yen for decontamination work; 1.1 trillion yen for the construction of interim radioactive waste storage facilities; and 2 trillion yen secured by Tepco to scrap the reactors.

The new estimates see compensation payments costing 8 trillion yen and 4-5 trillion yen for decontamination.

The cost of decommissioning reactors — a process which will span at least 30-40 years — are projected to swell to hundreds of billions of yen a year from the current 80 billion. That would add several trillion yen to the overall cost.

Combined with the cost of building interim storage facilities, the total cost is forecast to exceed 20 trillion yen.

The snowballing costs are due mainly to the expansion of the number of people eligible for damages and the difficulty of conducting decontamination work, neither of which was fully understood when the initial estimates were made.

As conditions inside the reactors gradually become clear ahead of the retrieval of fuel debris scheduled for early in the 2020s, it is becoming increasingly certain that decommissioning will cost more than 2 trillion yen. ”

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