TEPCO must regain public trust to ensure Fukushima’s steady recovery — The Yomiuri Shimbun

” To ensure the steady recovery of Fukushima, Tokyo Electric Power Company Holdings, Inc.’s revised business plan must not be allowed to end up as pie in the sky.

TEPCO has compiled a new business plan. The utility has strengthened its steps to improve profitability to raise funds for costs including decommissioning reactors and compensation related to the March 2011 accident at its Fukushima No. 1 nuclear power plant. This is the second time the plan has been revised.

The total cost of cleaning up the nuclear accident has ballooned from ¥11 trillion to ¥21.5 trillion. TEPCO will shoulder ¥16 trillion of this amount over about 30 years. The ¥300 billion TEPCO spent in fiscal 2016 on compensation and reactor decommissioning costs will be increased to ¥500 billion annually.

TEPCO must boost its “earning power” to secure sufficient capital to meet those costs. Restarting reactors at TEPCO’s Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture will be essential for this. Each reactor brought back online will raise TEPCO’s earnings by ¥40 billion to ¥90 billion per year.

TEPCO is working to gradually restart all seven reactors at the Kashiwazaki-Kariwa plant from fiscal 2019. However, as things stand, high hurdles remain in its way. This is because even if a reactor passes safety screenings conducted by the Nuclear Regulation Authority, local government authorities also must agree to the reactors’ restart.

The recent revelation that TEPCO did not disclose data about the insufficient earthquake-resistance of the main quake-resistant building at the plant has further heightened local distrust of the utility. Niigata Gov. Ryuichi Yoneyama is not budging from his cautious stance because he believes safety measures at the plant are insufficient. “At the moment, I can’t agree to the restart” of the reactors, Yoneyama said.

An expert panel of the Economy, Trade and Industry Ministry also had some stinging criticism for TEPCO, saying it “has not earned enough trust from the public.”

Transparency vital

On June 23, TEPCO will switch to a new leadership lineup when Hitachi, Ltd. Honorary Chairman Takashi Kawamura becomes TEPCO’s chairman. Kawamura will need to work hard to regain trust in TEPCO so restarting its reactors can become a reality.

Strengthening cooperation with other electric utilities and launching new operations, such as gas retailing, also will be effective in solidifying TEPCO’s revenue base. Another issue that needs to be addressed is the overseas development of its thermal power business, in which TEPCO is pursuing integration with Chubu Electric Power Co.

The new plan stipulates TEPCO will “prepare a basic framework for cooperation with other companies” by around fiscal 2020, keeping in mind the Higashidori nuclear plant TEPCO is constructing in Aomori Prefecture.

TEPCO is considering working with Tohoku Electric Power Co., which has a nuclear power plant in that region. If this tie-up comes to fruition, it will be useful for establishing a stable supply of electricity. TEPCO’s intentions on this issue are understandable.

Other utilities that could become partners with TEPCO during a realignment in the industry hold deep-rooted concerns that cooperating with TEPCO could result in the costs of dealing with the nuclear accident being shunted on to them. TEPCO must lay the groundwork to dispel such concerns.

TEPCO and the government will, as soon as this autumn, establish a forum at which they can listen to the opinions of other electric utilities on steps to reorganize nuclear power and electricity transmission businesses.

Profits will be distributed based on the capital contribution ratio in a joint venture. Other companies should not be forced to shoulder the costs of the Fukushima nuclear accident. Highly transparent rules such as these will need to be drawn up. ”

by The Yomiuri Shimbun

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Fukushima disaster sways former advocate of nuclear power — Bloomberg

” The man blocking the world’s largest nuclear plant says he grew opposed to atomic energy the same way some people fall in love.

Previously an advocate for nuclear power in Japan, Ryuichi Yoneyama campaigned against the restart of the facility as part of his successful gubernatorial race last year in Niigata. He attributes his political U-turn to the “unresolved” 2011 Fukushima Dai-Ichi disaster and the lack of preparedness at the larger facility in his own prefecture, both owned by Tokyo Electric Power Co. Holdings Inc.

“Changing my opinion wasn’t an instant realization,” Yoneyama said in an interview. “It was gradual. As people say, you don’t know the exact moment you’ve fallen in love.”

Yoneyama won’t support the restart of the Kashiwazaki-Kariwa plant in Niigata until an investigation is complete into the chain of events that resulted in the triple meltdown at Fukushima, which he plans to visit Wednesday. While utilities don’t need approval of local authorities to restart plants, Japanese power companies are tradition-bound not to move ahead until they get their consent.

Local Opposition

Yoneyama, a 49-year-old doctor and native of Niigata, is one of the highest-profile local opponents pitted against a political establishment led by Prime Minister Shinzo Abe, which sees nuclear power as crucial for the country’s long-term energy security and environmental goals. Regulations and public opinion are keeping nearly all of Japan’s atomic stations shut almost six years after the accident at Fukushima, where the search has barely begun for fuel that burned through to the bottom of the reactors.

“If the local governor remains firmly opposed to the restart, it will be very difficult for the reactors to come back online,” said James Taverner, an analyst at IHS Markit Ltd. “In addition to the local government, building the support and trust of local residents is key.”

A Kyodo News poll on the day of Yoneyama’s October election showed about 64 percent of Niigata voters opposed the restart of Kashiwazaki-Kariwa, known popularly as KK. The restart of the facility was one of the key issues in the race to replace Governor Hirohiko Izumida, who was famous for his tough stance on Tokyo Electric. He unexpectedly announced in August that he wouldn’t seek a fourth term.

To the residents of the prefecture, Yoneyama was the candidate who would make nuclear safety a priority, while his main opponent gave off the vibe that he was a member of the nuclear restarts camp, the former governor said by e-mail.

Switching Sides

In last year’s gubernatorial race for the southern prefecture of Kagoshima, where Kyushu Electric Power Co. operates the Sendai nuclear plant, a three-term incumbent was defeated by an opponent campaigning to temporarily close the reactors. A district court last year barred Kansai Electric Power Co. from running two reactors at its Takahama station in western Japan only weeks after they’d been turned back on.

Yoneyama supported bringing back online Japan’s reactors during his unsuccessful bid in 2012 for a seat in Japan’s lower house. The country was being forced to spend more on fossil fuel imports after the disaster, so restarting the plants was needed to help the economy recover, he said at the time.

Though Yoneyama’s position switch helped secure his first electoral victory after four failed campaigns for the country’s legislature, nuclear opponents see him driven by more than political opportunism.

“I had my reservations about Yoneyama,” said Takehiko Igarashi, an official at the Niigata division of the anti-nuclear group Nakusou Genpatsu. “But after he was vetted and endorsed by the Japanese Communist Party and other smaller parties that have an anti-nuclear slant, I knew that I could trust him.”

evTokyo Electric and Abe’s government see restarting KK as one way for Japan’s biggest utility to boost profits and help manage its nearly 16 trillion yen ($139 billion) share of the Fukushima cleanup. Resuming reactors No. 6 and No. 7 will boost annual profits by as much as 240 billion, the utility has said.

The economic argument, however, is beginning to hold less sway, with Yoneyama saying the benefits to the local economy are ‘overstated.’ While the prefecture risks missing out on 1.1 billion yen a year in government support without the restart, that represents a small slice of the prefecture’s budget, which tops 1 trillion yen, according to Yoneyama.

Abe, a strong backer of atomic power, leads a government aiming for nuclear to account for as much as 22 percent of Japan’s energy mix by 2030, compared with a little more than 1 percent now.

While restart opponents like Yoneyama demand the government guarantee the safety of the reactors, they’ve also criticized evacuation and emergency response plans as inadequate.

In his first meeting with Tokyo Electric executives since taking office, Yoneyama earlier this month told Chairman Fumio Sudo and President Naomi Hirose that he won’t support KK’s restart until a new evacuation plan is drawn up using the results of a Fukushima investigation. Tepco will fully cooperate with the probe and stay in communication with the governor, the company said in response to a request for comment.
“Once I realized that the Fukushima disaster couldn’t be easily resolved, of course my opinion changed,” Yoneyama said. “If another accident occurs, overseas tourism will become a distant dream. Even Japanese may flee the country.” ”

by Stephen Stapczynski and Emi Urabe

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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’s power industry at crossroads as Fukushima decommissioning costs rise – The Mainichi

” The Economy, Trade and Industry Ministry’s plan to add the increased costs of decommissioning the tsunami-hit Fukushima No. 1 Nuclear Power Plant was scrapped before the end of the year due to a public backlash.

It is estimated that the costs of decommissioning the crippled power station would snowball from 2 trillion yen to 8 trillion yen. An internal document that the ministry had compiled by September last year stated that the costs of compensation payments as well as the decommissioning expenses should be added to power transmission fees that new power companies pay for the use of major utilities’ power grids.

If the decommissioning costs that are expected to increase by trillions of yen were regarded as TEPCO’s debts, the utility would fall into a state of capital deficit — in which the company’s debts surpass its assets. It could force TEPCO to delist its stock on stock markets and make it difficult for banks to continue loaning to the firm.

To avoid such a situation, the Economy, Trade and Industry Ministry has decided to change the accounting rules to allow TEPCO to book the decommissioning costs in separate years. To do so, however, it is necessary to guarantee that the costs can be recovered from TEPCO every year. Two plans surfaced to enable this.

One is to accumulate money to be saved through TEPCO’s cost-cutting measures and management reform at the Nuclear Damage Compensation and Decommissioning Facilitation Corp. (NFD), which would control the decommissioning costs. The other is to add part of the decommissioning costs to transmission fees.

In October, a senior ministry official told LDP legislators behind closed doors, “It’s safer to add the costs to the transmission fees than relying on TEPCO’s management reform.”

However, experts as well as the general public intensified their criticism of the plan to add decommissioning expenses to the transmission fees despite the earlier plan to make sure that TEPCO fully secured funds for decommissioning the plant.

In response, the ministry changed its policy. In a Nov. 8 document that the ministry released when briefing LDP members, it stated the two plans as ways to certainly secure enough funds for decommissioning the plant. However, in its Dec. 1 document, the plan to add the costs to transmission fees was dropped.

“We considered the use of transmission fees but we can’t implement it because of mounting criticism of the plan,” said a ministry official in charge of the matter.

On the other hand, major power suppliers besides TEPCO have footed the costs of paying compensation to those affected by the Fukushima nuclear crisis. An expert committee dealing with the matter proposed at the end of the year that the increase in the amount of compensation payments should be raised by adding the amount to transmissions fees.

Saying that power companies that own nuclear plants should have saved money to respond to nuclear accidents, the panel recommended that new power companies should shoulder part of the costs because their customers had previously benefited from nuclear power run by major utilities.

The committee also proposed that major power suppliers be obligated to supply less expensive electricity, such as power generated at nuclear plants, to new power companies. In other words, the panel attempted to take the carrot-and-stick approach to convince new market entrants.

In response to the recommendations, the Economy, Trade and Industry Ministry will implement the proposals after soliciting public comments. As a result of the implementation of the plan, the monthly electric power bill for a standard household in Japan, excluding Okinawa Prefecture where there are no nuclear plants, would rise an average of 18 yen over a 40-year period from 2020.

The ministry patiently and carefully formed consensus among legislators over the plan. The committee’s conclusion was based on its explanatory document that the panel presented to the LDP shortly before.

House of Representatives member Taro Kono and a few other LDP legislators calling for an end to Japan’s reliance on atomic power voiced opposition, but they fell far short of a majority.

Minako Oishi, an adviser on consumer affairs who sits at the experts’ panel, repeatedly voiced opposition to adding compensation costs to transmission fees on the grounds that it would run counter to the purpose of liberalizing the power market. She also released a written statement to that effect. However, she was unable to overwhelm the firm alliance between politicians and bureaucrats.

“I have the impression that the conclusion had been drawn in advance. Such a serious matter as the additional financial burden of dealing with the Fukushima accident should’ve been discussed at the Diet,” Oishi said.

On Dec. 20, 2016, the ministry’s expert committee compiled its recommendations estimating that TEPCO needs to shoulder 16 trillion yen of the cost of dealing with the Fukushima nuclear crisis. The recommendations urged TEPCO to merge each of its divisions, including nuclear power and power transmission, with those of other companies — effectively leading to a split of the utility — and advance into the global market.

On the same day, a message by TEPCO President Naomi Hirose was released through the company’s in-house computer network. “If we steadily continue our work without hesitation, we can open up new opportunities. This is something that only TEPCO can do,” the message said.

However, the message reflects Hirose’s anxiety. Hirose told TEPCO executives the following day at the headquarters, “I’m worried whether employees can maintain their morale. Please try not to make them feel weak.”

TEPCO failed to achieve its goal of getting out of state control as early as fiscal 2017 by improving its business performance — because there are no prospects that its idled Kashiwazaki-Kariwa Nuclear Power Plant in Niigata Prefecture can be reactivated in the foreseeable future.

TEPCO Director Keita Nishiyama sat at the news conference on July 28 with Chairman Fumio Sudo and President Hirose, and read a statement saying that “the government needs to clarify its policy” on how to shoulder the costs of dealing with the nuclear crisis, which is expected to worsen. Nishiyama is a bureaucrat that the ministry loaned to TEPCO as a board member after placing the utility under state control.

His tough statement indirectly asks the government for assistance. A TEPCO executive said, “It’s not a type of statement written by a private company insider.”

At the news conference, the ministry suggested that it would take the opportunity of discussions on how to shoulder the costs of dealing with the Fukushima nuclear crisis to embark on its long-cherished goal of restructuring the electric power and atomic energy industries.

About two months later, the ministry set up two expert panels — one on TEPCO reform and the other on the reform of the electric power system.

“In Japan, the demand for power has stagnated. In particular, regulations on the atomic energy business are stiff. Therefore, the power industry is a declining industry. There’s no time to lose in promoting business tie-ups and overseas expansion. Discussions shouldn’t be limited to TEPCO reform,” said a ministry official.

However, some TEPCO officials have expressed displeasure at the move. “Infrastructure companies like us are different from manufacturers. It’s important to ensure stable power supply. It’s not true that we should just increase our profits,” one of them said.

At the same time, executives of other major power companies reacted coolly to TEPCO.

“We don’t know how much of the costs of dealing with the Fukushima accident we’ll be required to shoulder,” one of them said.

“TEPCO’s arrogance that stood out in the industry is still fresh in our memory,” another commented.

The ministry and the expert panel on TEPCO reform share the view that TEPCO needs to carry out the largest-scale reforms since Yasuzaemon Matsunaga, the “king of the power industry” who established major power companies’ regional monopolies in order to ensure stable power supply.

However, Japanese semiconductor and liquid crystal manufacturers and other companies that were integrated on the initiative of the Economy, Trade and Industry Ministry have not grown as the ministry had aimed.

As such, it remains to be seen whether TEPCO will join hands with other power companies and gain entry into the global market as the ministry envisages. “

by The Mainichi

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Editorial: Cost estimate needed first to decommission Fukushima plant — The Asahi Shimbun

” An industry ministry panel of experts is tackling two key questions concerning the decommissioning of the crippled Fukushima No. 1 nuclear power plant.

One is how much money will be needed to decommission the plant’s reactors, three of which melted down. The other is who should foot the bill and how.

However, there are some serious flaws in the way the expert panel is working on these knotty questions, which could lead to a huge financial burden on the public.

First of all, the panel’s meetings are not open to the public. The main points of the discussions are published later, but many details, including who made specific remarks, are omitted.

The fate of Tokyo Electric Power Co., which operates the Fukushima plant and is responsible for its decommissioning, will be largely determined by whether it can restart its Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture.

Panel members include many business leaders who have been promoting nuclear power generation.

The outcome of the recent Niigata gubernatorial election underscored the strong opposition of local residents against TEPCO’s plan to bring the plant back online.

The panel’s lineup raises concerns that its discussions may be based on the assumption that the Kashiwazaki-Kariwa nuclear plant will eventually be restarted, despite the situation in the prefecture.

Another troubling fact is that the government has yet to announce any estimate of the total decommissioning cost.

In the panel’s first meeting, some members urged the government to swiftly present an estimate of the cost. In the second meeting, however, the Ministry of Economy, Trade and Industry only said that annual spending could grow to several hundreds of billions of yen from about 80 billion yen ($703 million) spent now.

The ministry says a specific estimate of the total cost will be announced as early as the end of the year, along with a plan for management reforms at TEPCO and a package of related measures the government will take.

But this timetable doesn’t make sense. Pinning down the overall decommissioning cost should be the starting point for the panel’s discussions.

With the conditions of the melted nuclear fuel remaining unclear, it is certainly difficult to accurately estimate the cost.

Still, an estimate should first be shown to ensure substantive debate on whether the method used for the work is appropriate and whether there are ways to curb the cost.

As for financing, the panel has supported the proposal that TEPCO should secure the necessary funds on its own through management reform over other options, such as the utility’s liquidation involving debt forgiveness by its creditors, tax financing by the government and a continuation of the current state control of TEPCO.

In an apparent attempt to stress the importance of TEPCO’s own efforts to save itself, the panel has also recommended that the Kashiwazaki-Kariwa nuclear plant should be spun off from TEPCO and integrated with the nuclear power business of another utility.

There is no disputing that TEPCO should push through thorough management reforms to prevent the public from shouldering part of the cost through tax financing or hikes in electricity rates.

The question, however, is whether the embattled utility’s own efforts will be enough to cover the entire decommissioning cost, expected to reach several trillions of yen.

If a plan based on the company’s own efforts fails and disrupts the decommissioning process, the reconstruction of disaster-hit areas in Fukushima Prefecture could be seriously delayed.

It is vital for the panel to win broad public support for its proposals on the national challenge of decommissioning the Fukushima No. 1 nuclear power plant.

This requires careful, exhaustive and reasonable debate, open to the public, on the cost and the financing method. ”

by The Asahi Shimbun, Oct. 27

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Residents who fled Fukushima meltdown fear return to ghost town — Bloomberg

” Weed-engulfed buildings and shuttered businesses paint an eerie picture of a coastal Japanese town abandoned after a monstrous earthquake and tsunami triggered meltdowns in the Fukushima nuclear plant.

Namie, one of the communities hardest hit by the 2011 disaster, had 21,000 residents before they fled radiation spewing from the reactors eight kilometers (five miles) away. Prime Minister Shinzo Abe is now looking to repopulate the town as early as next year, a symbolic step toward recovery that might also help soften opposition to his government’s plan to restart Japan’s mostly mothballed nuclear industry.

“The national and local governments are trying to send us back,” said Yasuo Fujita, 64, a sushi chef who lives alongside hundreds of other Fukushima evacuees in a modern high rise in Tokyo more than 200 kilometers away. “We do want to return — we were born and raised there. But can we make a living? Can we live next to the radioactive waste?”

So far few evacuees are making plans to go back even as clean-up costs top $30 billion and Abe’s government restores infrastructure. That reluctance mirrors a national skepticism toward nuclear power that threatens to erode the prime minister’s positive approval ratings, particularly in areas with atomic reactors.

Mothballed Reactors

Officials in his government are calling for nuclear power to account for as much as 22 percent of Japan’s electricity supply by 2030, nearly the same percentage as before the Fukushima meltdown, in part to help meet climate goals. Only two of the nation’s 42 operable nuclear plants are currently running, leaving the country even more heavily reliant on imports of oil and gas.

A poll published by the Asahi newspaper this week found 57 percent of respondents were opposed to restarting nuclear reactors, compared with 29 percent in favor. One of Abe’s ministers lost his seat in Fukushima in an upper house election in July, and the government suffered another setback when an anti-nuclear candidate won Sunday’s election for governor of Niigata prefecture, home to the world’s largest nuclear plant.

Some 726 square kilometers — roughly the size of New York City — of Fukushima prefecture remain under evacuation orders, divided by level of radioactivity. While the government is looking to reopen part of Namie next year, most of the town is designated as “difficult to return to” and won’t be ready for people to move back until at least 2022.

“We must make the area attractive, so that people want to return there,” Reconstruction Minister Masahiro Imamura said this week. “I want to do everything I can to make it easy to go back.”

Workers are cleaning by scraping up soil, moss and leaves from contaminated surfaces and sealing them in containers. Still, the operation has skipped most of the prefecture’s hilly areas, leading to fears that rain will simply wash more contamination down into residential zones. Decommissioning of the stricken plant itself is set to take as many as 40 years.

The bill for cleaning up the environment is ballooning, with the government estimating the cost through March 2018 at $3.3 trillion yen ($32 billion). That’s weighing on Tokyo Electric Power Co. Holdings Inc., which is already struggling to avoid default over decommissioning costs.

“They are spending money in the name of returning things to how they were” without having had a proper debate on whether this is actually possible, said Yutaka Okada, senior researcher at Mizuho Research Institute in Tokyo. “Was it really right to spend this enormous amount of money?”

Namie officials, operating from temporary premises 100 kilometers away in the city of Nihonmatsu, are plowing ahead with preparations. A middle school in the town is scheduled for remodeling to add facilities for elementary pupils — even though they expect only about 20 children to attend. Similar efforts in nearby communities have had limited success.

Only 18 percent of former Namie residents surveyed by the government last year said they wanted to return, compared with 48 percent who did not. The remainder were undecided.

Staying Put

Fujita, the sushi chef, has joined the ranks of those starting afresh elsewhere. He opened a seafood restaurant near his temporary home last year, and is buying an apartment in the area. In a sign the move will be permanent, he even plans to squeeze the Buddhist altar commemorating his Fukushima ancestors into his Tokyo home.

For those that do return, finding work will be a headache in a town that was heavily dependent on the plant for jobs and money.

Haruka Hoshi, 27, was working inside the nuclear facility when the earthquake struck, and she fled with just her handbag. Months later she married another former employee at the plant, and they built a house down the coast in the city of Iwaki, where they live with their three-year-old son. They have no plans to return.

“It would be difficult to recreate the life we had before,” she said. “The government wants to show it’s achieved something, to say: ‘Fukushima’s all right, there was a terrible incident, but people are able to return after five years.’ That goal doesn’t correspond with the reality.” ”

by Isabel Reynolds and Emi Nobuhiro

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