Fukushima’s ¥8 trillion cleanup leaves foreign firms in the cold — The Japan Times

” Cleaning up the Fukushima nuclear plant — a task predicted to cost 86 times the amount earmarked for decommissioning Japan’s first commercial reactor — is the mother of all salvage jobs. Still, foreign firms with decades of experience are seeing little of the spoils.

Safely dismantling the Japanese power plant, wrecked by the 2011 earthquake and tsunami, will cost about ¥8 trillion ($70 billion), the Ministry of Economy, Trade and Industry said on Dec. 9, quadrupling the previous estimate. While a contract to help clean up the facility would be a windfall for any firm with specialized technology, the lion’s share of the work has gone to local companies that designed and built most of Japan’s atomic infrastructure.

The bidding process for Fukushima contracts should be more open to foreigners, as Japan has never finished decommissioning a commercial nuclear plant, let alone one that experienced a triple meltdown, according to Lake Barrett, an independent adviser at Japan’s International Research Institute for Nuclear Decommissioning. While the Fukushima cleanup is unlike any nuclear disaster in history, foreign firms that have experience decommissioning regular facilities could provide much-needed support, according to Barrett, and even the plant’s operator, Tokyo Electric Power Co. Holdings Inc.

‘Cultural Resistance’

“Internationally, there is a lot more decontamination and decommissioning knowledge than you have in Japan,” Barrett, a former official at the U.S. Nuclear Regulatory Commission, said in an interview in Tokyo. “I hope the Japanese contracting system improves to get this job done safely. There is this cultural resistance — it is almost like there is an isolated nuclear village still.”

An opaque bidding process plays to the heart of criticisms put forward by independent investigators, who said in a 2012 report that collusion between the government, regulators and the plant’s operator contributed to the scale of the disaster.

Of 44 subsidized projects publicly awarded by the trade and economy ministry since 2014, about 80 percent went to the International Research Institute for Nuclear Decommissioning. The group, known as IRID, was established in the wake of the Fukushima disaster and is comprised entirely of Japanese corporations, according to the ministry’s website.

Japan’s trade and industry ministry awarded funds directly to only two foreign firms during the same period. Many of the contracts had only one or two bidders.

Of about 70 contracts awarded since the March 2011 disaster, nine have gone to foreign companies, according to an official in the ministry’s Agency of Natural Resources and Energy who asked not be named, citing internal policy.

To provide opportunities for foreign companies, the ministry has created an English website for bids and also provides English information sessions to explain the contracts, the official said.

Toshiba, Hitachi

IRID’s contracts are given to its members, including Toshiba Corp., Hitachi Ltd. and Mitsubishi Heavy Industries Ltd., which have partnerships and joint ventures with foreign firms, spokesman Yoshio Haruyama said by phone. While it doesn’t directly contract work to companies overseas, IRID taps foreign experts as advisers and participates in international collaborative projects, he said.

Mitsubishi Heavy has about five or six contracts through IRID, but can’t share how many partnerships it has with foreign firms, spokesman Shimon Ikeya said by phone. Hitachi has sub-contracts with foreign suppliers related to the Fukushima cleanup, but can’t provide details about these agreements because they aren’t public, a spokesperson said by email.

As of March, IRID had about ¥30 billion worth of ongoing contracts primarily related to research and development of fuel removal and waste treatment. IRID, which aims to “gather knowledge and ideas from around the world” for the purpose of nuclear decommissioning, doesn’t disclose how much of their money ultimately goes to foreign businesses, according to its spokesman. Barrett, its adviser, said he thinks it’s “very low,” but should ideally be 5 percent to 10 percent.

‘Nuclear Village’

Japan’s biggest nuclear disaster isn’t void of foreign technology. Toshiba, which owns Pennsylvania-based Westinghouse Electric Co., and Hitachi, which has a joint venture with General Electric Co., are tapping American expertise. A giant crane and pulley system supplied by Toshiba to remove spent fuel from the wrecked reactors employs technology developed by Westinghouse.

“We bring in knowledge from foreign companies, organizations and specialists in order to safely decommission the reactors,” Tatsuhiro Yamagishi, spokesman for Tepco, said by email. While the company can’t say the exact number of foreign firms involved in the Fukushima cleanup, companies including Paris-based Areva SA, California-based Kurion Inc. and Massachusetts-based Endeavor Robotics are engaged in work at the site, according to Yamagishi.

For foreign firms, however, independently securing contracts is still a tall order.

“When it comes to Japan’s nuclear industry, the bidding system is completely unclear,” Hiroaki Koide, a former assistant professor at Kyoto University Research Reactor Institute, said in an email. “The system is designed to strengthen the profits of Japan’s nuclear village,” he added, referring to the alliance of pro-nuclear politicians, bureaucrats and power companies that promote reactors.

Tepco’s annual cost to decommission its Fukushima plant may blow out to several hundred billion yen a year, up from the current estimate of ¥80 billion, the trade and industry ministry said in October. As of June, almost ¥1 trillion has been allocated for decommissioning and treating water at Fukushima, according to Tepco’s Yamagishi.

‘Ripe for Corruption’

With that much money at stake, Japan has become ground zero for a plethora of companies looking to benefit from the cleanup work. The structure of Japan’s nuclear industry and the closed procurement preferred by the utilities that operate atomic plants means that the most lucrative opportunities for foreign companies are in the area of subcontracting, according to a report by the EU-Japan Centre for Industrial Cooperation released in March.

“Foreign firms have long argued that the Japanese bidding process is one that is ripe for corruption due to a lack of openness and transparency,” Daniel Aldrich, professor and director of the security and resilience studies program at Northeastern University in Boston, said in an email. For nuclear decommissioning “there is even less clarity and transparency due to security and proliferation concerns,” he said.

Rigging Bids

The Japan Fair Trade Commission raided the offices of five companies last year in relation to rigged bids for maintenance contracts from Tepco, according to Jiji Press. Eleven road-paving companies were fined in September on projects to repair roads following the March 2011 earthquake and tsunami, Jiji reported.

Andrew DeWit, a political economy professor at Rikkyo University in Tokyo, agrees that the contract-awarding process isn’t transparent. A lot of foreign companies seek Japanese partners to better their chances, he said.

Purolite Corp., a closely held water purifying company, spent millions of dollars developing and testing a system that could be used to treat radioactive water at Fukushima. Pennsylvania-based Purolite partnered with Hitachi to help win a contract to use its technology at the wrecked facility.

Those plans didn’t pan out. Purolite is suing Hitachi in New York and Tokyo, alleging that Hitachi is using its technology at Fukushima in breach of agreements made in 2011, shutting it out of more than $1 billion in contracts, according to court documents filed in September.

Hitachi doesn’t comment on ongoing legal matters, a spokesperson said by email.

“With a smaller pool of competitors, firms can expand their profit margins,” said Northeastern University’s Aldrich. “There are French and Russian firms that have the technical expertise to participate in nuclear decommissioning processes, but it is unclear if they will be able to compete on a level playing field with Japanese firms, which have far more experience with Japanese regulations and expectations.” ”

by Stephen Stapczynski, Bloomberg

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Tepco falls after president highlights Fukushima cost risk — Bloomberg

Treated Fukushima water safe for release, Tepco adviser says — Bloomberg

” Treated water from Tokyo Electric Power Co. Holdings Inc.’s wrecked Fukushima nuclear plant north of Tokyo is safe to be released under controlled circumstances into the nearby Pacific Ocean, an independent adviser to the utility said.

“It is much better to do a controlled release in my view than to have an accidental release,” Dale Klein, the adviser and a former chairman of the U.S. Nuclear Regulatory Commission, said in an interview in Tokyo. “I get nervous about just storing all that water when you have about a thousand tanks. You have all the piping, all the valves, everything that can break. ”

More than five years after the meltdowns at Fukushima, Tokyo-based Tepco continues to struggle to contain the radiation-contaminated water that inundates the plant.

About 300 metric tons of water — partly from the nearby hills — flow into Fukushima’s reactor building daily, mixing with melted fuel and becoming tainted, according to the company’s website. For perspective, that’s roughly the amount of water contained in one lane of an Olympic-sized swimming pool.

The water is currently pumped out of the buildings and purified, lowering its radioactive content with a system called Advanced Liquid Processing System, or ALPS. The treated water, which still contains a radioactive element known as tritium, is then stored in one of roughly 1,000 tanks at the site.

Water Challenges

What to do with the treated water remains a headache for Tepco. The utility was urged by the International Atomic Energy Agency in May 2015 to consider discharging the water into the ocean. In early 2014, Klein, the Tepco adviser, criticized the company’s progress in managing the water situation, saying at the time that the task distracted Tepco from other important challenges associated with the cleanup.

Tepco will cooperate with the government, local authorities, and fishermen regarding what to do with the tritium water, spokesman Tatsuhiro Yamagishi said by phone. As of July 28, Tepco stored 668,352 tons of treated water at the Fukushima plant, while 188,462 tons of untreated water was waiting in a second set of tanks to be processed by ALPS, according to Tepco’s Yamagishi.

The government agency overseeing handling of the treated water hasn’t decided whether to go ahead with an ocean release because it needs to “weigh any potential impact on society,” according to an official who asked to not be named, citing internal policy.

“I hope the government will help move towards a decision,” Klein said.

Nuclear power plants routinely and safely release dilute concentrations of tritiated water, according to the the U.S. Nuclear Regulatory Commission.

Release of the “water will not be a safety issue, but it will be an emotional issue,” Klein said. “A lot of people are not going to know what tritium is and they’re just going to perceive that the water is glowing in the dark.” ”

by Stephen Stapczynski

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Tepco’s index-topping gains fueled by electricity shake-up — The Japan Times

” Japan’s reform of its energy market is proving a boon to investors in the company at the center of the Fukushima No. 1 nuclear plant disaster.

Tokyo Electric Power Co.’s shares have surged 59 percent in the six months through Tuesday’s close, making it the best performer on the Nikkei 225 Stock Average and the 174-member Bloomberg World Utilities Index.

Tepco, owner of the wrecked plant, is seen as an early beneficiary of government-backed power reform. By April, residential power customers will be able to choose their provider for the first time. And by 2020, utilities will be required to separate their transmission, distribution and retail businesses.

“Looking towards the electricity market reform to be completed by 2020, a company the size of Tepco is an attractive investment,” Mana Nakazora, an analyst at BNP Paribas Securities (Japan) Ltd., said by email.

While the company’s stock price has surged this year, it is still less than half of where it was before the Fukushima disaster. The shares fell 3.1 percent to ¥751 at the close of Tokyo trading on Tuesday. They closed at ¥2,153 the day before Fukushima, but have increased 55 percent since Tepco announced on May 1 that it will transition to a holding company beginning in April.

Tepco was rated new overweight on Tuesday with a target price of ¥1,000 a share by Yuji Nishiyama, an analyst at JPMorgan Securities Japan Co.

Spokesman Tatsuhiro Yamagishi declined to comment on the performance of the company’s stock.

For Tepco, a more open energy market in Japan offers the opportunity for growth at a company whose survival was in question just a few years ago. The Fukushima disaster put it on the verge of default, with the head of Japan’s biggest stock market telling the company to file for bankruptcy protection. Tepco was saved by a ¥1 trillion infusion from the government in 2012, the nation’s largest bailout since the 1990s.

The power company received ¥5.61 trillion from the state-backed Nuclear Damage Compensation and Decommissioning Facilitation Corp. to deal with payouts to victims of the Fukushima meltdown, Tepco reported last month.

Under the April reorganization, Tepco’s nuclear operations will be placed into a holding company, while debt investors will be repaid from the funds of a spun-off power grid company.

Tepco’s probability of debt nonpayment has dropped to 0.309 percent from about 1.121 percent on Oct. 16, according to the Bloomberg default-risk model, which considers factors such as share prices and debt. The probability of debt nonpayment was as high as 6.156 percent in 2012.

“The company’s default risk has disappeared,” said BNP Paribas’s Nakazora.

The government’s power reform began this year with the creation of an organization to manage the nation’s supply and demand balance. Next year’s full retail liberalization, the second stage of the reform, will allow utilities to more freely expand outside their traditional regions. The government aims to remove rate regulations by 2020.

A drop in fuel costs saw Tepco increase operating profit threefold in the quarter ended June 30. The price of liquefied natural gas imported into Japan fell to a six-year low in June, while crude oil prices are near a record low.

“Investors expected first-quarter profits to have a big increase due to the drop in oil then liquefied natural gas,” Syusaku Nishikawa, a Tokyo-based analyst at Daiwa Securities Co., said by email.

Yet challenges remain. Liabilities related to the Fukushima disaster and Tepco’s responsibilities will continue to pressure the company’s credit quality in the long term, according to Mariko Semetko, a vice president at Moody’s Japan K.K., which rates the company’s outlook as negative.

Tepco, which operates the world’s biggest nuclear plant by capacity at its Kashiwazaki-Kariwa facility in Niigata Prefecture, has yet to restart any of its nuclear reactors. Resuming operations at the facility would boost profit by as much as ¥32 billion a month, the company has said.

“The recent improvements in profitability are definitely a plus,” Semetko said by phone. “But the company hasn’t yet started its Kashiwazaki-Kariwa plant and there are a lot of uncertainties around costs related to Fukushima. With all of that in mind, we haven’t been able to stabilize the outlook yet.” ”

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Tepco seeks foreign seal of approval to restart nuclear plant — The Japan Times

” Tokyo Electric Power Co.’s invitation to the world’s top nuclear agency to review the safety of its Kashiwazaki-Kariwa facility signals the utility’s desire to win international backing to resume operations at the world’s largest atomic power plant.

Kashiwazaki is Tepco’s best bet of returning to nuclear power generation, after the plant was shuttered along with the rest of Japan’s nuclear capacity following the unprecedented meltdowns at the company’s Fukushima No. 1 plant in 2011.

Firing up its reactors would boost Tepco’s profit by as much as ¥32 billion a month, according to Tepco spokesman Tatsuhiro Yamagishi.

“They want a foreign seal of approval,” said Robert Dujarric, a director at the Institute of Contemporary Asian Studies of Temple University in Tokyo. “No one trusts what Tepco says. The only way they can convince Japanese residents that this is not risky is to get a foreign institution to certify them being acceptable.”

The International Atomic Energy Agency began its 11-day evaluation on Tuesday and will report its findings to Japan’s watchdog, the Nuclear Regulation Authority, which has the final say on a plant’s safety. A restart would still need local government approval, which presents difficulties as the region’s governor remains a vociferous critic of Tepco.

Tepco expects to spend at least ¥270 billion to bring Kashiwazaki back online, although it says the cost is a secondary consideration. What is needed and what the IAEA brings is the “knowledge, ingenuity, and engineering capabilities to get there,” Takafumi Anegawa, Tepco’s chief nuclear officer, told a news conference at the plant on Tuesday. “Randomly spending money doesn’t assure safety.”

The NRA has visited Kashiwazaki three times since agreeing to check its reactors in 2013, although it has not given a timeline for approval, according to Tepco’s Yamagishi. NRA spokesman Taro Komine declined to comment on Kashiwazaki and the IAEA’s safety study there.

The IAEA was created in 1957 and one of its goals is to promote the safe use of nuclear energy. Tepco, meanwhile, is struggling to convince the Japanese public of improvements in its attitudes to safety amid worker deaths and irradiated water leaks at the ruined Fukushima plant.

“Of course Tepco would like them to come online,” Tom O’Sullivan, founder of Tokyo-based energy consultant Mathyos, said by email. However, “I have normally categorized it as a plant that is extremely unlikely to come online. There is huge local opposition.”

Hirohiko Izumida, three-term governor of Niigata Prefecture where the plant is located, has said restarting Kashiwazaki shouldn’t even be considered until Tepco’s safety record and handling of Fukushima are properly reviewed.

Niigata Prefecture spokesman Kenji Kiuchi declined to comment on the governor’s opinion of the IAEA review.

Restarting Kashiwazaki would boost Prime Minister Shinzo Abe’s plan for nuclear energy to account for as much as 22 percent of the country’s total electricity supply by 2030.

Thus far, Kyushu Electric Power Co.’s Sendai reactors are the only ones to pass the NRA’s safety requirements and clear local courts. Kyushu is aiming to restart the two units this year. While the NRA judged two reactors at Kansai Electric Power Co.’s Takahama station as safe, legal hurdles have since obstructed any restart.

Tepco is seeking to restore two of the seven reactors at Kashiwazaki, which is located about 220 km northwest of Tokyo on coast of the Sea of Japan. Its only other nuclear plants are Fukushima No. 1, which is being decommissioned, and the nearby Fukushima No. 2 facility, which may be too tainted by its association with the 2011 disaster to ever restart.

In order to ensure Kashizawaki’s safety, Tepco says it has bolstered staff levels, built a 15 meter flood-prevention wall, and built a reservoir to store 20,000 tons of water to cool reactors in case of pump failures.

The IAEA said its primary focus will be assessing the plant’s internal operations. Three months after its review, the agency will send its report to Tepco, the NRA and the Ministry of Economy, Trade and Industry.

The review will not replace Japan’s regulatory process, said Peter Tarren, the IAEA’s team leader at Kashiwazaki. “Decisions about restarts of the plant are not the authority of the IAEA,” he said. ”

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Forced to flee radiation, fearful Japanese villagers are reluctant to return — The New York Times

” MIYAKOJI, Japan — Ever since they were forced to evacuate during the accident at the Fukushima Daiichi nuclear plant three years ago, Kim Eunja and her husband have refused to return to their hilltop home amid the majestic mountains of this rural village for fear of radiation.

But now they say they may have no choice. After a nearly $250 million radiation cleanup here, the central government this month declared Miyakoji the first community within a 12-mile evacuation zone around the plant to be reopened to residents. The decision will bring an end to the monthly stipends from the plant’s operator that have allowed Ms. Kim to relocate to an apartment in a city an hour away.

“The government and the media say the radiation has been cleaned up, but it’s all lies,” said Ms. Kim, 55, who is from South Korea, and who with her Japanese husband runs a small Korean restaurant outside Miyakoji. “I want to run away, but I cannot. We have no more money.”

She is not the only one. While the central government and national news media have trumpeted the reopening of Miyakoji as a happy milestone in Japan’s recovery from the devastating March 2011 accident, many residents tell a darker story. They insist their homes remain too dangerous or too damaged to inhabit and that they have not received enough financial compensation to allow them to start anew somewhere else.

They criticize the plant’s operator, Tokyo Electric Power Co., or Tepco, for failing to reimburse them for the value of their homes, usually their family’s largest financial asset. Depending on where they lived, they say they have received amounts from half the preaccident value to just $3,000, a tiny fraction of the original value of their homes.

Many villagers complain that these amounts are not enough to move farther away from the plant, which is still leaking radiation, or to repair their traditional wooden farmhouses, which have started to rot and collapse since they were damaged by the earthquake and then abandoned.

As a result, many evacuees have been forced to live in a state of limbo since the accident, unable to leave barracks-like temporary housing, or end their dependency on Tepco for monthly stipends to live in apartments outside the village. Tepco pays the stipends under orders from the government.

Now they feel growing pressure to return whether they want to or not. The government has declared that the stipends, which range from a few hundred dollars to more than $1,000, will end next March, when temporary housing will also begin to be closed. Villagers who move back before then will receive a $9,000 bonus from Tepco, adding to the pressure to return.

“Tepco is being so stupidly unfair with the compensation,” said Yukei Tomitsuka, the mayor of Tamura, the city that administers Miyakoji. “We are the victims. Should we have to go hat in hand to Tepco to ask for more money?”

Experts call Miyakoji a forerunner of the problems that will be faced by the 150,000 people displaced by the accident over all, as additional communities are reopened as a result of a $36 billion government-financed cleanup. They say the evacuees will feel increasing pressure to go back from a government that wants to restore the preaccident status quo as much as possible to limit criticism of the powerful nuclear industry.

“This is inhumane and irresponsible,” said Teruhisa Maruyama, a lawyer who leads the Support Group for Victims of the Nuclear Accident, a Tokyo-based legal organization that helps residents seek increased compensation.

“The national government knows that full compensation could add up to big money, enough to raise public doubts about the wisdom of using nuclear power in Japan.”

Tepco refused to comment, beyond saying that it had so far paid out $36 billion for all types of compensation. “Our company is sincerely listening to the details of each claim,” said Tatsuhiro Yamagishi, a Tepco spokesman. A spokesman for the Education Ministry, which is setting compensation standards, said that the ministry was trying to respond to evacuees’ needs, but that it was hard to meet all the requests. A government committee set up to resolve compensation-related disputes says it has received more than 10,000 requests from disgruntled evacuees.

When Prime Minister Shinzo Abe visited Tamura last month, Mayor Tomitsuka handed him a letter asking that residents be given more compensation for their homes. The prime minister has yet to reply.

Almost 500 residents of Miyakoji have recently joined one of two separate group lawsuits demanding that Tepco pay more compensation, a rare show of rising frustrations in a close-knit Japanese rural community, which usually abhors conflict-causing litigation.

While many evacuees, particularly families with children, say they do not want to go back because of radiation, the government says that Miyakoji is safe. Radiation levels were relatively low there to begin with, since most of the plant’s radiation plume missed the area. The massive cleanup, which involved some 1,300 workers scraping up contaminated dirt and resurfacing areas around homes with clean gravel, lowered radiation levels even further.

On a recent trip here, radiation measured up to 0.23 microsieverts per hour, about three times preaccident levels but below those of some communities outside the evacuation zone. Whether or not that level is safe is a contentious question: Experts admit that they know little about the health effects of long-term exposure to low-dose radiation.

Authorities had hoped that Miyakoji could serve as a model for repopulating the evacuated communities. So far, only about a third of residents have returned, and most of them are older villagers who feel they have less to worry about from the long-term cancer risks of radiation.

All of the village’s 3,000 residents were evacuated the day after the March 11, 2011, earthquake and tsunami knocked out cooling systems at the plant. The majority of villagers, who lived farther than 12 miles from the plant, were paid $3,000 to cover damage to their homes and were allowed to return six months later. Most have yet to move back even now, mainly for fear of radiation, though some complain that stores and other services have not reopened.

The 357 villagers with homes inside the 12-mile zone were not allowed to return until April 1, more than three years after the accident. They received the highest compensation, about half the preaccident value of their homes.

One was Yoshikuni Munakata, 63, who on a recent afternoon was repairing a collapsed shed at his farm about nine miles southwest of the destroyed plant.

Mr. Munakata said the $50,000 that he had received in compensation was not nearly enough to fix the old farmhouse built by his grandfather, where the wooden floors warped so badly that the sliding doors no longer close. But while he could not move back, he also cannot leave. He said he tried to do so right after the accident, going to the northern island of Hokkaido to start a new life as a van driver. However, he said he gave up after 18 months for lack of money, and came back to collect his monthly living stipends.

He said he is unsure of what will happen to him once those stipends end in March.

“My home is a total loss,” said Mr. Munakata. He said he was not afraid of radiation because he used to work at the Fukushima Daiichi plant before retiring. “The compensation payments force us to come back, but they are not enough to let us live here again.”

Among those who have not come back are Ms. Kim and her husband, Satoshi Mizuochi. They sank their life savings of about $300,000 into their home, where they had planned to spend their remaining years.

With few buyers likely to step forward, they say their home is now essentially worthless. But with only a tiny income from their restaurant, they say they will probably have to go back once their rent stipends end in March. “They want to say that everything is back to normal so they can keep their nuclear plants,” said Mr. Mizuochi, 57, who helps his wife at the restaurant. “Failing to compensate us for our losses is a way of pressuring us to go back.” ”

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