Federation estimates Fukushima nuke plant cleanup costs, redress may rise to ¥8 trillion ($77.10 billion)
An industry group has estimated costs for decontamination work at the disaster-struck Fukushima nuclear plant and compensation for nuclear damage to be around ¥8 trillion ($77.10 billion) more than the current official projection, a source said Thursday.
The Federation of Electric Power Companies of Japan, which consists of the country’s 10 electric power companies, has informally asked Prime Minister Shinzo Abe’s government to use state funds to cover the extra costs, the source also said.
The costs are supposed to be covered by the utilities, including Tokyo Electric Power Company Holdings Inc., operator of the crippled Fukushima No. 1 nuclear power plant, where three reactors melted down in the aftermath of the March 2011 quake-tsunami disaster. The government is cautious about using taxpayer money to deal with the issue, the source said.
Under the current estimate, compensation payments are projected to total ¥5.4 trillion, while decontamination costs are forecast to reach ¥2.5 trillion.
Tepco and other nuclear power plant operators have paid contributions for compensation payments to a state-backed fund. As for decontamination costs, the fund will seek to retrieve that money by selling Tepco shares that it owns.
Govt. Mulls Ways to Promote Fukushima Produce
The Japanese government plans to create ways to encourage consumers to buy food from Fukushima Prefecture. The area still suffers from the perception that its foodstuffs are unsafe due to the 2011 Fukushima Daiichi nuclear power plant accident.
Reconstruction Minister Masahide Imamura and senior government officials held a meeting on Friday.
The officials reported that a lot produce and processed foods from Fukushima are forced to be sold at prices lower than their pre-accident levels.
They explained farmers and food producers from the region face numerous challenges, such as fewer sales routes and reluctance to buy their products.
They decided to offer benefits to consumers who purchase the food.
Imamura stressed simply advertising won’t be enough and he wants the officials to create a framework that will entice consumers. He noted giving them rewards in a point system is one idea.
Promoting Fukushima Rice and Sake
On the Issue of Japan, Fukushima and Rice
In Japan, rice is life. The word for “life” is also the word for “meal” or “food.” The importance of rice to the Japanese people cannot be overstated. The word for rice has been called “emotive.” Damage to Japan’s rice crops goes beyond simple damage to the diet. To be confronted with a shortage of rice calls forth powerful feelings of deprivation in the Japanese. Japanese rice, irradiated by the events of “3/11,” is in danger.
“3/11” is what the Japanese call the series of deadly disasters which struck northern Japan in March of 2011; the earthquake, tsunami, and the Fukushima Daiichi nuclear power plant meltdown. Northern Japan was devastated and recovery will take many decades.
When the Fukushima Daiichi nuclear power facility was badly damaged by irradiation, local crops, including batches of rice grown in Fukushima, found to be badly affected by radiation, were swiftly removed from the market.
Five years after the quake, Fukushima rice producers still have difficulty marketing their produce. But the Japanese government, working in tandem with nonprofits and private organizations, has developed a positive and creative response to the Fukushima food crisis.
The Rice Peace Project Seminar, held on September 19, 2016 in New York, was inspired by the initiatives of a Japanese government supported campaign working together with non-profits, corporate projects, and organizations, including the NPO Project 88.
The NPO Project 88, which takes name from the 88 processes of rice production, mobilizes Japanese high-quality rice as an emergency relief food. Developing tasty, nutritious, non-GMO, low pesticide, and allergen-free, organic and gluten-free rice products is also central to NPO Project 88’s mission, helping to spread peace and disaster-relief in the world through rice.
The Rice Peace Project Seminar, held to publicize the efforts of the NPO Project 88, featured three speakers from Japan. Mrs. Akie Abe, spouse of Prime Minister Shinzo Abe, Mr. Hiroshi Sakurai, President of the sake brewery Asahi Shuzo, and Ms. Nari Takahashi, President of NPO Project 88. The speeches were followed by a sushi tasting prepared by Sushi Chef Yoichi Akashi of Kappo Akashi using Eco-rice as well as a tasting of “Dassai” sake, the sake Prime Minister Abe offered President Obama during the U.S. President’s 2014 visit to Japan.
Jeff Santos, CEO of the Santos Media Group who hosted the seminar, introduced Mrs. Akia Abe. Santos described Mrs. Abe as an activist. Abe is actively engaged in supporting the NPO Project 88 and in promoting Fukushima’s agricultural industry by creating Yamato No Kokoro sake from rice produced in Fukushima.
Mrs. Akie Abe said that in 2011, in the wake of the Tohoku earthquake, she realized the importance of supporting Japanese food production, especially rice. With the encouragement of US Ambassador to Japan, Caroline Kennedy, Abe began to support the production of Fukushima rice and sake,
Abe described the production of rice in Japan as highly political. She said that 150 years ago, after extensive warring between the Chochu and Aizu clans. the two prefectures began to cultivate rice for sake and to brew sake, jointly. The joint effort was successful and the two prefectures now live in harmony.
Abe said that for Japanese, now as always, rice and sake are spiritual foods. “In Japan, we like to get our hands dirty [working the land.] We are a part of nature. We owe our gratitude to nature. It is my pleasure to work with rice producers and sake producers.”
She closed with a warm invitation: “Please enjoy the sushi and sake tasting today and please also come to Japan to enjoy them!”
Hiroshi Sakurai, President of Sake Brewery Asahi Shuzo, opened with praise for Japanese sake in general and Asahi Shuzo’s sake in particular. “Sake has to be ‘oishii’ (delicious) If it is not delicious what is the point of creating it? And our sake is especially ‘oishii!’”
Sakurai said that he wanted to show two world leaders enjoying Japanese sake, Prime Minister Abe and US President Barack Obama. Sakurai’s photo array displayed pictures from the U.S. President’s 2014 visit to Japan.
Sakurai said that his company, Asahi Shuzo, had partnered with the king of rice producers, Yamada Nishiki, accounting for 6.5 percent of total rice production in Japan. He has a staff of 100 and his employees are the best. Production is entirely by hand- they do not use machines. Production is around the clock, 24/7, to produce “oishii” sake.
Sakurai said that rice production in Japan is very eco- friendly. They recycle all that remains from rice production, such as rice husks, used to make sembei, or rice milk.
In closing, he said: “We are eager to promote our sake and we hope you enjoy the tasting.”
Nari Takashashi, President of NPO Project 88. Ms. Takahashi said that rice was the first food served to Fukushima quake victims. It was sometimes all that aged survivors could eat. And for those who could not eat plain rice she and her company developed soft rice cakes. They were very popular, as were their cream puffs.
Takahashi said that some kids with allergies couldn’t eat even the rice cookies or cream puffs. So she developed allergy-free cookies made with rice powder and delivered to the schools. Kids loved them.
Takahashi said that the application for allergy free products goes well beyond Fukushima. Survivors of the Kumamoto quake this past April are their next potential customers. She believes there is a huge market for these products world wide, especially to disaster survivors and to millennials.
After this spirited set of speeches, it was no surprise that the sushi and sake tastings were extraordinary.
http://intpolicydigest.org/2016/10/06/on-the-issue-of-japan-fukushima-and-rice/
Fukushima Cleanup Talks Put Tepco Survival Risk in Focus
Tokyo Electric Power Co. is still struggling to put the Fukushima nuclear disaster behind it, admitting this week that paying for decommissioning the plant in one go risks leaving it insolvent.
The cost to insure debt in Japan’s biggest utility climbed to a seven-month high of 89 basis points on Oct. 5 after President Naomi Hirose said after a meeting in Tokyo with a government commission that the company is asking for help in avoiding financial ruin. Tepco has already received state aid for compensation and decontamination.
The March 2011 nuclear accident and its fallout will ultimately cost more than 11 trillion yen ($106 billion), according to a study by academics including Kenichi Oshima, a professor of economics at Ritsumeikan University. Tepco has estimated that decommissioning alone will cost about 2 trillion yen. Investors should hold off buying bonds of other utilities until there is more clarity on how the government will close the Fukushima plant, according to BNP Paribas SA.
“Now is not the best time to be investing in electricity utility bonds, with discussions going on about nuclear plant decommissioning, and the potential for spreads to widen,” said Mana Nakazora, chief credit analyst at BNP Paribas in Tokyo. Even so, she added, “the government has little choice but to take measures to avoid a default by Tokyo Electric.”
While Prime Minister Shinzo Abe’s government has committed to provide up to 9 trillion yen for compensation to individuals and business hurt by the Fukushima disaster and for decontaminating areas affected, that figure doesn’t include decommissioning of the nuclear plant itself, according to a report by Moody’s Investors Service last month.
Scrapping the Fukushima reactors may take 30 years to 40 years, and Tokyo Electric will only start removing debris from the plant from in 2021, a decade after the incident, according to the utility’s road map for dealing with the remnants of the disaster.
In speaking to reporters, Tepco President Hirose was probably making a public case for more government support, according to Yutaka Ban, the chief credit analyst at SMBC Nikko Securities Inc. in Tokyo. Ban said he saw little probability that support will be withheld.
“Things will likely settle down” after the government adopts the new measures, said Ban. “Without government support, the costs would be extremely high.”
For a Bloomberg Intelligence report on Asia-Pacific utilities, click here.
Tepco’s credit-default swaps have come down from as high as 1,762 basis points in October 2011, according to data provider CMA. The utility has said it plans to return to the bond market by the end of the fiscal year to March 2017. Jun Oshima, a spokesman for Tokyo Electric, said that plan is still in place. It stopped issuing notes after the Fukushima disaster.
The extra yield on Tepco’s 1.155 percent bonds due in 2020 was 64 basis points more than sovereign debt, the lowest since before the Fukushima disaster, according to Bloomberg-compiled prices. The spread on Osaka-based Kansai Electric Power Co.’s 0.976 percent notes due in 2020 was 39 basis points.
Tokyo Electric has a Ba3 rating from Moody’s and BB- score from S&P Global Ratings, both three levels below investment grade.
“Decommissioning is currently the biggest unknown, and clarity matters in terms of credit,” said Mariko Semetko, a Moody’s analyst in Tokyo. “The lack of clarity there has been holding back the credit quality.”
Radiation Brain Moms and Citizen Scientists: The Gender Politics of Food Contamination after Fukushima
by Aya Hirata Kimura (Author)
Following the Fukushima Daiichi Nuclear Power Plant disaster in 2011 many concerned citizens—particularly mothers—were unconvinced by the Japanese government’s assurances that the country’s food supply was safe. They took matters into their own hands, collecting their own scientific data that revealed radiation-contaminated food. In Radiation Brain Moms and Citizen Scientists Aya Hirata Kimura shows how, instead of being praised for their concern about their communities’ health and safety, they faced stiff social sanctions, which dismissed their results by attributing them to the work of irrational and rumor-spreading women who lacked scientific knowledge. These citizen scientists were unsuccessful at gaining political traction, as they were constrained by neoliberal and traditional gender ideologies that dictated how private citizens—especially women—should act. By highlighting the challenges these citizen scientists faced, Kimura provides insights into the complicated relationship between science, foodways, gender, and politics in post-Fukushima Japan and beyond.
Editorial Reviews
Review
“Riveting and smart, Radiation Brain Moms and Citizen Scientists tracks the efforts made by citizens in post-Fukushima Japan to ensure the safety of their food from radioactive contamination. In the face of state neglect and criticism from fellow Japanese, these initiatives display a ‘soft’ boldness (versus activist politics). Interweaving stories of citizen scientists and ‘radiation brain moms’ with sharp theoretics that deconstruct the entanglements of science, neoliberalism, and postfeminism at work, this book is at once powerful and timely.”
(Anne Allison, author of Precarious Japan)
“Based on careful research, extensive fieldwork, and a judicious use of political and feminist theory, this book’s relevance to political and social developments extends beyond Japan’s borders. It is a reminder of the ongoing effects of the Fukushima disaster in Japan at a time when these effects are being increasingly ignored by the global media. A timely and important book, Radiation Brain Moms and Citizen Scientists will appeal to scholars of contemporary Japanese society as well as science and technology studies scholars, especially those interested in the gender dimensions of science and technology.”
(Tessa Morris-Suzuki, author of Borderline Japan: Foreigners and Frontier Controls in the Postwar Era)
About the Author
Aya Hirata Kimura is Associate Professor of Women’s Studies at the University of Hawai’i at Manoa and the author of Hidden Hunger: Gender and Politics of Smarter Foods.
Radioactive water leaks from storage tank at Fukushima plant
The latest contaminated water leak at the Fukushima No. 1 nuclear power plant occurred at a flange-type storage tank, whose seams are connected by bolts.
Up to 32 liters of radioactive water leaked from a storage tank at the crippled Fukushima No. 1 nuclear plant, but the contaminated liquid has been contained, Tokyo Electric Power Co. said Oct. 6.
The leaked water is currently within barriers surrounding the tank that are designed to block the flow of fluids, TEPCO, the plant’s operator, said.
The liquid contained water that had been treated to remove radioactive strontium and other substances, as well as highly contaminated water from the bottom of the tank that was stored shortly after the nuclear accident started in 2011.
A radioactivity level of 590,000 becquerels of beta ray-emitting materials was detected per liter of the leaked water.
The water seeped out of a tank with bolted seams on its sides, which are more prone to leaks than those with welded walls.
TEPCO continues to use the bolted containers despite the risk because production of welded tanks cannot keep pace with the buildup of contaminated water, mainly from groundwater entering the damaged reactor buildings, at the nuclear plant.
Storage tank leaks at Fukushima Daiichi plant
Workers at the crippled Fukushima Daiichi nuclear plant have found a leak of highly radioactive water from a waste water tank.
Its operator, Tokyo Electric Power Company, says the water likely leaked from a seam of the tank.
The leaked water was spotted on Wednesday on the side of one of an array of steel tanks holding contaminated water that is continuously generated at the site.
TEPCO’s analysis found 590,000 becquerel per liter of beta-emitting radioactive materials in the water.
Tokyo Electric estimates that 32 liters of such highly radioactive water had trickled out, mixed with rainwater, and remained within a barrier around the tank.
Workers moved water in the tank to another one to lower the water level enough to halt the leak.
The leaking cylindrical tank is made by splicing steel plates with bolts. But they have had waste water leaks in the past from seams.
The operator has been replacing these leak-prone tanks with new seamless ones. But the increasing volume of waste water makes it difficult for the utility to completely do away with the old ones.
Fire destroys Fukushima nuclear disaster evacuee housing
Fueled by strong winds, fire engulfs temporary housing at the Yoshima industrial park in Iwaki, Fukushima Prefecture, on Oct. 6, 2016.
IWAKI, Fukushima — A fire on Oct. 6 destroyed temporary housing for residents of Okuma, Fukushima Prefecture, who evacuated here due to the Fukushima No. 1 Nuclear Power Plant disaster, police said.
The fire broke out at around 4:25 p.m. and destroyed 19 homes in four single-story, prefabricated wooden buildings at the Yoshima industrial park in Iwaki. According to prefectural police, a 16-year-old boy was treated for smoke inhalation. The Okuma Municipal Government will supply the five households that lost their residences with housing elsewhere.
There were 72 households living in 86 of the 31-building complex’s 122 residences. Some 90 percent of Okuma residents’ original homes are within a nuclear disaster no-go zone around the Fukushima plant, and it is unknown when those living in the Yoshima industrial park might be able to return to the town.
Sho Tsukamoto, 29, an employee of a construction company who lost his residence and his possessions in the fire, said, “I even lost the picture of my dead father and other photos of my family that I brought from Okuma.”
http://mainichi.jp/english/articles/20161007/p2a/00m/0na/006000c
Ban on food from Japan’s radiation-affected areas remains: Taiwan FDA
Taipei, Oct. 6 (CNA) The food and Drug Administration (FDA) reaffirmed Thursday that there is no timetable for any lifting of a ban on food imports from five Japanese prefectures that were affected by radiation fallout from a nuclear power plant meltdown following the 2011 earthquake and tsunami.
“There is no timetable for any such opening,” FDA Director-General Chiang Yu-mei (姜郁美) told CNA.
She declined to comment on reports that Taiwan and Japan have reached an initial consensus on Taiwan’s opening to food imports from the five prefectures.
Taiwan banned food imports from Fukushima, Ibaraki, Tochigi, Gunma and Chiba prefectures in the wake of the meltdown of the Fukushima Daiichi Nuclear Power Plant on March 11, 2011.
FDA Deputy Director-General Lin King-fu (林金富) said that food safety remains the primary concern, adding that the FDA will take stock of the management measures of other countries and continue to assess the situation.
Japanese media reported in May that Taiwan was planning to reopen to food imports from the five prefectures, but the reports were denied by the FDA. Reports resurfaced Thursday again about a lifting of the ban, and that formal opening could come early next year.
However, Pan Chih-kuan (潘志寬), an FDA food section chief, said that no related instructions have been received and that the assessment on Japanese food is still underway.
He stressed the three premises for opening — results of border inspection, monitoring results in Japan and the public’s attitude toward opening.
He said that since 2011, border inspections on 92,000 Japanese food items have been carried out, with 215 items found to contain a tiny amount of cesium. One item was found to contain the radioactive material in the past year.
http://focustaiwan.tw/news/asoc/201610060009.aspx#.V_b8QyR8f38.facebook
Fukushima FAQ: Are Fukushima Radionuclides Causing Super Storms in the Pacific and Atlantic?
Hurricane Matthew spins in the Caribbean. Storms are fueled by energy which ultimately comes from the sun.
Short answer is absolutely not.
This post is part of an ongoing series dedicated to science education and to relate scientific findings about the impact of the Fukushima nuclear disaster on environmental and public health. I am frequently (more than you might think) asked if or told that the decay energy from radionuclides released from Fukushima Daiichi are fueling some of the massive cyclones in the Pacific in Atlantic Oceans. This is nonsense of course but highlights some of the logic used and how misinformation can fuel incorrect conclusions with respect to Fukushima and its environmental and public health impacts.
The thought process that brings one to link Fukushima contamination to hurricanes and typhoons goes something like this:
- Fukushima released radionuclides to the environment with much of the contamination ending up in the Pacific Ocean
- Radioisotopes generate heat when they decay
- Tropical cyclones feed off of ocean heat
- Fukushima is causing or causing more intense tropical cyclones
It is likely that increasing sea surface temperatures have the potential to influence the number and intensity of tropical cyclones. However, when we examine the reasoning linking Fukushima to cyclones and add a bit of numeracy we see how this reasoning is flawed.
One of the highest activity isotopes from Fukushima remaining in open ocean surface water is Cesium-137 (half-life = ~30 years, 137Cs). Much of this contamination remains in the North Pacific rather than in the tropics where typhoons form and far away from the tropical Atlantic where hurricanes form but lets ignore this fact for the purpose of our calculation. Maximum 137Cs activities measured by the Fukushima InFORM project in the northeast Pacific are ~ 10 Bq m-3 (cubic meter = 1000 L or ~1000 kg) of seawater.
By knowing this activity and the half-life of the isotope we can calculate the mass of 137Cs in one ton of seawater to be equal to be 0.0000000000031 grams or 3.1 x 10-12 g or 3.1 picograms. This highlights why detecting such low levels of contamination in the ocean is such an analytical challenge.
Now that we know how much 137Cs we have we can look up the decay energy of this isotope as well. This energy corresponds to the difference in mass between the parent and daughter isotope and for 137Cs is equal to 0.6 Watts per gram or 0.6 W g-1 (where a Watt is equal to 1 Joule per second).
So to a first order the power added to one ton (1000 kg) of seawater from Fukushima contamination is about:
(3.1 x 10-12 g) x (0.6 W g-1) = 0.000000000002 Watts or 2 picoW
This is a very small amount of power indeed. We can compare this to the Watts added to a square meter of the ocean surface. Erring on the low side in order to be conservative lets say that the Sun adds about 100 W per square meter (W m-2) at the ocean surface (but see this link from NASA for actual data).
The ratio of the power contributed by the Sun at the ocean surface to Fukushima decay energy is 50,000,000,000,000.
Suggesting that Fukushima energy is fueling cyclone activity is, scientifically speaking, silly. Friends don’t let friends do it.
Please see the NASA website for a useful summary of how tropical cyclones are formed.
Contaminated Water Tanks Without Fondation Bolts at Fukushima Daiichi
More than 1000 contaminated water tanks at Fukushima Daiichi, some do not have fondation bolts.
Even with a moderate earthquake of seismic intensity 4 there is a risk that those contaminated water tanks collapse.
The Nuclear Regulatory Commission of Japan has published on their website the seismic statement submitted by TEPCO about those tanks without fondation bolts. Their quake-resistance standard is 0.3G lower.
http://www.nsr.go.jp/data/000107385.pdf
The photograph below clearly shows the tank without fondation bolts.
Seismic intensity 4 and typhoons could cause the collapse of those contaminated water tanks. In case of tanks collapsing, a large amount of contaminated water would of course flow into the Pacific Ocean.
Japan Grapples with Cost of Scrapping Fukushima Plant
Tepco’s Fukushima Daiichi nuclear plant, site of the 2011 meltdowns.
TOKYO — Tokyo Electric Power Co. Holdings promises to shoulder as much of the burden as possible in dealing with the aftermath of the nuclear meltdown in Fukushima, but additional outside assistance is deemed inevitable to cover the gargantuan cost of dismantling the facility.
An expert panel under the Ministry of Economy, Trade and Industry began deliberations over the additional costs of the 2011 disaster on Wednesday. Attendees included Yoshimitsu Kobayashi, chairman of the Japan Association of Corporate Executives, and Akio Mimura, chairman of the Japan Chamber of Commerce and Industry.
“We want to fully meet our responsibility for the Fukushima disaster without receiving government assistance,” said Tepco President Naomi Hirose, who attended as an observer.
Tepco has allocated 2 trillion yen ($19.3 billion) so far in preparation for the decades-long process to decommission its Fukushima Daiichi nuclear plant. But it is expected to need trillions more once it starts to remove melted nuclear nuclear fuel from the site.
The bulk of the cost will not hit until the 2020s, so the government has made little progress in creating a framework to provide assistance, unlike efforts in compensating victims and decontaminating the surrounding area.
Hirose explained that once Tepco can give a realistic estimate, it will be required to recognize the entire cost at once and could turn insolvent. “We’d like the government to come up with a framework to eliminate such risks,” he said.
The panel will project decommissioning costs in its future meetings, and will make recommendations to Tepco regarding necessary reforms and restructuring by the end of the year. The utility will aim to create a new management plan in January based on the panel’s proposals. The economy ministry will iron out details on how to assist Tepco based on the expense estimate, such as by creating a reserve fund where Tepco can put aside the necessary money.
The discussion will focus on how much of the cost Tepco can assume through internal reforms. In addition to dismantling the plant, total compensation to victims is already expected to top 6.4 trillion yen, while decontamination could cost about 4 trillion yen — both above projections from January 2014. It will take Tepco and other major utilities decades to pay that off under the current framework. An update is in order.
“I am not in favor of any rescue plan that involves the government shouldering what Tepco should be paying,” said Hitotsubashi University professor Kunio Ito, who heads the expert panel. But he said something like that could happen “as a last resort.” A ministry official also suggested there may be a debate on raising electricity prices to help fund the decommissioning.
If the plan is to hike rates on customers not served by Tepco, the utility needs to put forth a strategy for reform that can satisfy the entire Japanese public. The government’s program will depend on how far Tepco is willing to go.
Tepco Threatens To Declare Bankruptcy; Dismantling Unit 1
Calls grow to curb further govt. support to TEPCO
Members of a panel looking at how to cover costs from the 2011 Fukushima Daiichi accident say government support to the operator should be limited.
Economic leaders and academic experts attended the first meeting on Wednesday of a committee set up by the industry ministry to discuss decommissioning and compensation costs.
Officials said the government has earmarked about 87 billion dollars for compensation and decontamination work, and that operator Tokyo Electric Power Company has set aside about 19 billion dollars to scrap the crippled reactors.
But they said these funds could fall well short of the amount that will be needed.
Many participants said the utility must bear the increased financial burden through business restructuring and management reforms to curb additional government support.
TEPCO President Naomi Hirose, who took part in the meeting as an observer, warned that his company could become insolvent if it is forced to post the ballooning decommissioning costs as a debt.
He argued that a special accounting rule should be created to avoid a possible insolvency.
Before the next meeting is held, the government plans to show how much the cost of decommissioning the reactors is projected to grow.
Hirose told reporters after the meeting that his company should be the first to foot the bill, and that the firm will consider what should be done to absorb the cost.
Tepco Falls After President Highlights Fukushima Cost Risk
Japan utility declines 3.3% to settle at lowest in two weeks
Company seeks government help to eliminate insolvency risk
Tokyo Electric Power Co. Holdings Inc. closed at the lowest in more than two weeks after its president said it may face insolvency if it recognized at one time the cost of decommissioning the wrecked Fukushima nuclear plant and that it’s asked the government to help eliminate the risk.
Tepco, as the company is better known, fell as much as 7.9 percent during intraday trading and closed 3.3 percent lower at 414 yen a share in Tokyo, the lowest since Sept. 16. The benchmark Topix index rose 0.6 percent.
“As it becomes possible to estimate the Fukushima decommissioning cost, we will have the problem of recognizing the liability at once. That means there is a possibility Tepco becomes insolvent,” President Naomi Hirose told reporters in Tokyo Wednesday after meeting with a Ministry of Economy, Trade and Industry commission charged with reforming the company. “We are requesting institutional measures to remove such risk.”
As of June, nearly 1 trillion yen ($9.7 billion) has been allocated to decommissioning and water treatment at Fukushima, Tepco spokesman Tatsuhiro Yamagishi said last month.
The March 2011 nuclear accident and its fallout will ultimately cost more than 11 trillion yen, according to a study by Japanese college professors including Kenichi Oshima, a professor of economics at Ritsumeikan University.
Tepco calls for government help to curb impact of rising Fukushima costs
A worker puts up new logo of TEPCO Holdings and Tokyo Electric Power Company (TEPCO) Group on the wall ahead of the transition to a holding company system through a company split at the TEPCO headquarters in Tokyo, Japan, March 31, 2016.
The operator of the nuclear power plant destroyed in the Fukushima disaster five years ago has asked Japan’s government for help in avoiding the risk of the utility going bankrupt should there be a sharp rise in the full estimated clean-up costs.
Tokyo Electric Power Co Holdings Inc didn’t specify what kind of help it was seeking, but people familiar with the matter said Japan’s biggest utility is looking for new rules to avoid having to book a huge loss in its accounts if it is estimated that there will be big cost overruns for decommissioning the power station.
“We don’t want to receive national rescue measures but want to bear the Fukushima responsibility ourselves,” Tepco president Naomi Hirose told a government panel, according the panel chief, Kunio Ito, a professor at Hitotsubashi University.
“For that reason, we would like to undertake steps for a further overhaul than we have had so far,” Hirose was quoted as saying.
In March 2011, one of the worst earthquakes in history triggered a 10-metre high tsunami that crashed into the Fukushima Daiichi nuclear power station, causing the world’s worst nuclear accident since Chernobyl 30 years ago. Meltdowns in three reactors released radiation over a wide area, contaminating water, food and air, and forcing more than 160,000 people to evacuate.
Dismantling the reactors is expected to take about 40 years, but even five and a half years on, Tepco still struggles to contain radioactive water from the plant and has said it can’t predict the eventual total costs of the clean-up and decommissioning.
After the panel meeting on Tepco reform and the Fukushima Daiichi plant, Hirose told reporters that it was difficult to accurately predict the costs of even a gradual decommissioning of the crippled reactors, said a spokeswoman for the utility, which generates about a third of the country’s electricity.
“If the issue of recognising all the estimated losses at once were to emerge, our company would fail, so we would like some structural assistance from the government to be able to avoid that risk,” Hirose said.
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, said a person familiar with the situation.
Cost estimates could shoot up when the company and the government, which owns 50.1 percent of Tepco, decide on how to extract fuel debris at the plant in 2018 or 2019, said a person with direct knowledge of discussions on restructuring Tepco.
A government official familiar with the deliberations said, “In the event that Tepco can’t shoulder the burden, it will mean changing the fiscal-support system.” As it’s hard to imagine the government letting the company go bust, “in the end it will have to be a matter of either shouldering the burden with public funds or responding by raising electricity prices.”
The Mainichi newspaper said on Wednesday that Japan’s utilities lobby expects clean-up and compensation costs from the Fukushima disaster to overshoot previous estimates by 8.1 trillion yen (£62 billion).
The Federation of Electric Power Companies of Japan has informally asked the government to shoulder the extra cost, the newspaper said.
However, a federation spokesman said the group has not asked the government to shoulder any extra costs and the Mainichi estimates were not correct.
The new government panel also agreed that management reform at Tepco was necessary at its first meeting earlier in the day, panel chief Ito said.
Shares in Tepco ended down 3.3 percent after falling as much as 7.9 percent on Hirose’s remarks, which were initially interpreted as a plea for additional financial aid.
“The stock market seems to have reacted to the headline that it could become insolvent,” said a credit analyst at a Japanese brokerage. “But in reality, the president has just said what’s been known, that they need an accounting system that allows them to write off the cost of decommissioning gradually because posting the cost all at once could make it insolvent.”
http://uk.reuters.com/article/uk-tepco-outlook-idUKKCN1250JT
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