nuclear-news

Before the disaster, Tepco was a pillar of Japan’s business establishment, with a virtual monopoly over generating and distributing the electricity used by the world’s biggest urban conglomeration. Its position brought it annual revenues exceeding Y5,000bn ($65bn) and net profit of Y133.8bn and matchless political power.

Today, Tepco is a ward of the state – effectively bankrupted by liability claims but kept in business by a rescue scheme that shifts to taxpayers the up-front costs of cleaning up Fukushima prefecture and compensating victims of the catastrophe, including more than 100,000 people who have been forced from their homes.

With net assets of Y2,516bn at the end of 2009/10 financial year, Tepco has to repay these costs – estimated at Y4,700bn but likely to rise – over a still unspecified number of years, using profits that would otherwise have gone to shareholders, who themselves have been stripped of further dividend payments and hit by an 85 per cent fall in the value of their holdings since the disaster.

Tepco is also saddled with Y9,000bn of gross debt and while the banks have agreed to roll over loans at pre-disaster interest rates, so far they have resisted pressure to write off any debts entirely….

the Fukushima disaster has unleashed forces that could make restoring the status quo impossible, as Japan reconsiders its past embrace of nuclear power and the anti-competitive privileges bestowed on its nine regional electric utilities.

“Going back to business as usual is out of the question,” says a government official involved in administering the Tepco bail-out.

Unsurprisingly, the disaster has turned a majority of Japanese against nuclear power that, before the tsunami, generated about 30 per cent of the country’s electricity.

Tokyo’s policy response has reflected the anti-nuclear mood, but plenty of ambiguity remains. A pre-disaster target of increasing the proportion of Japan’s electricity generated by nuclear power to 50 per cent by 2030 has been scrapped; more support for solar, wind and other renewable-energy technologies has been promised; and an atomic plant near multiple earthquake faults in central Japan has been forced to close for safety upgrades.

Meanwhile, a debate about restructuring the electric power industry has begun….

In the short term, the biggest policy threat to the nuclear industry is local. Since the disaster, Japanese mayors and governors have been blocking utilities from restarting reactors that have shut down for routine safety inspections, and presently only a handful of reactors are producing power. Unless Mr Noda can change local leaders’ minds, the rest will be offline by next May.

At Tepco, only two of the 17 atomic reactors it operated before the tsunami are working, a situation that pushed its costs up by Y210bn in the six months to September 30. This month the utility projected a Y600bn net loss for the year to March 2012, which would bring its losses since the disaster to Y1,847bn. “Normal” looks a long way off.