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Study: Interest on TEPCO loans to cost taxpayers 218 billion yen

“An estimated 218.2 billion yen ($2.06 billion) of taxpayers’ money will be needed to cover the interest on loans extended to Tokyo Electric Power Co. to deal with the Fukushima nuclear disaster.”
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April 10, 2018
An estimated 218.2 billion yen ($2.06 billion) of taxpayers’ money will be needed to cover the interest on loans extended to Tokyo Electric Power Co. to deal with the Fukushima nuclear disaster.
The Board of Audit said TEPCO will require a maximum of 34 years to pay off loans totaling 13.5 trillion yen that were provided by financial institutions through the government.
The prediction was made based on an interest rate of 0.1 percent, but the rate could rise.
“The financial burden might increase,” a Board of Audit official said.
The government borrows funds from financial institutions and provides them to TEPCO effectively as interest-free loans via the Nuclear Damage Compensation and Decommissioning Facilitation Corp. Through the arrangement, the utility can pay compensation to evacuees of the accident at the Fukushima No. 1 nuclear plant and cover costs for decontamination and other procedures.
The ceiling for those funds was 9 trillion yen in 2013, but the limit was raised to 13.5 trillion yen by 2016.
Profits from TEPCO’s sales of its shares, as well as electricity fees collected by power companies across Japan, will be used to pay back the huge debt. But all interest payments will be covered with taxpayers’ money when the government repays the loans.
The Board of Audit estimates the TEPCO shares will be sold over a period from 19 to 34 years.
If the stock price rises, the loans will be repaid earlier, but a lower share price could lead to a delay in repayment.
During the repayment period, the government will have to pay 143.9 billion yen to 218.2 billion yen in interest, according to the forecast.
Another prediction put the amount of interest between 131.8 billion yen and 202.0 billion yen.
The Board of Audit in 2015 estimated the interest would total 126.4 billion yen.
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April 15, 2018 Posted by | Fukushima 2018 | , , | Leave a comment

Real cost of Fukushima disaster to reach $626 billion. Think tank estimate triple that of government

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A Tokyo-based think tank estimates that the complete cost of dealing with the Fukushima disaster could reach ¥70 trillion.

 

Fukushima nuclear disaster aftermath cost estimated at Y70 trillion

TOKYO —The total cost to deal with the Fukushima Daiichi nuclear plant disaster has been estimated at 70 trillion yen ($626 billion), over three times more than the government calculation, a study by a private think tank showed Saturday.

The Japan Center for Economic Research said total costs at the Fukushima nuclear complex operated by Tokyo Electric Power Company Holdings Inc could rise to between 50 trillion and 70 trillion yen. It compares with the roughly 22 trillion yen a government panel estimated in December.

If costs rise, the public burden could greatly increase. The country’s nuclear policy needs to be reviewed,” the JCER said.

Initially in the wake of the Fukushima disaster, the government expected the costs to total 11 trillion.

But a study by the Ministry of Economy, Trade and Industry showed the figure could be double the sum estimated in 2013.

Following that, the government decided to raise electricity rates to secure the money necessary to cover compensation payments, increasing the national burden.

Among the costs, the bill for compensation has been estimated at 8 trillion yen by the ministry. The JCER also adopted the figure.

The JCER, however, estimated costs for decontamination work at 30 trillion yen, compared with the government’s figure of 6 trillion yen, after the think tank made a calculation under a presumption that radioactive substances are disposed of at a facility in Rokkasho village in Aomori Prefecture.

The government is seeking a way to treat waste in Fukushima Prefecture, including radioactive soil, of which the amount could add up to roughly 22 million cubic meters, but where and how it will be disposed of has yet to be decided. Costs related to the procedure are not included in the government’s calculation.

Costs for decommissioning crippled reactors, which is expected to take 30 to 40 years, were estimated by the center at 11 trillion yen, compared with the government’s 8 trillion yen.

Expenses to treat contaminated water that remains in tanks at the plant were estimated by the center at 20 trillion yen unless the toxic water is released in the ocean after being diluted as nuclear regulation authorities recommend.

https://www.japantoday.com/category/national/view/fukushima-nuclear-disaster-aftermath-cost-estimated-at-y70-tril

 

Real cost of Fukushima disaster will reach ¥70 trillion, or triple government’s estimate: think tank

A private think tank says the total cost of the Fukushima disaster could reach ¥70 trillion ($626 billion), or more than three times the government’s latest estimate.

In a study Saturday, the Japan Center for Economic Research said costs of dealing with the heavily damaged Fukushima No. 1 nuclear plant run by Tokyo Electric Power Company Holdings Inc. could rise to between ¥50 trillion and ¥70 trillion.

In December, the government estimated the costs would reach roughly ¥22 trillion.

If costs rise, the public burden could greatly increase. The country’s nuclear policy needs to be reviewed,” JCER said.

The government’s initial expectations pegged the costs at ¥11 trillion.

But a study by the Ministry of Economy, Trade and Industry said that the final figure could turn out to be double the sum estimated in 2013.

Following that, the government decided to raise electricity rates to secure the money needed to cover compensation payments to the evacuees.

According to METI’s estimates, the bill for compensation payments will be ¥8 trillion, a figure the JCER decided to adopt.

The JCER, however, estimates the cost of the decontamination work will hit ¥30 trillion, or five times more than the government’s estimate of ¥6 trillion. The think tank based this calculation on a presumption that radioactive substances will be disposed of at a nuclear facility in the village of Rokkasho in Aomori Prefecture.

The government is seeking a way to treat radioactive soil and other waste in Fukushima Prefecture that could grow to roughly 22 million cu. meters, but where and how to dispose of it has yet to be decided.

Costs related to this procedure are not included in the government’s calculations.

In the meantime, JCER estimates that the cost of decommissioning the crippled reactors, which is expected to take 30 to 40 years, will reach ¥11 trillion. The government’s estimate is ¥8 trillion.

JCER also estimates that treating the contaminated water stored in hundreds of tanks at the plant will cost ¥20 trillion unless it is dumped into the ocean after being diluted as recommended by regulators.

http://www.japantimes.co.jp/news/2017/04/01/national/real-cost-fukushima-disaster-will-reach-%C2%A570-trillion-triple-governments-estimate-think-tank/#.WN_DfVBtn64

April 3, 2017 Posted by | Fukushima 2017 | , , | Leave a comment

Fukushima Bill

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Six years after Japan’s Fukushima nuclear disaster, Westinghouse and Toshiba join Tokyo Electric Power in a fight for survival.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

http://www.atimes.com/article/tepcos-fukushima-expensive-industrial-accident-history/

April 3, 2017 Posted by | Fukushima 2017 | , , | Leave a comment

Public Cost of Fukushima Cleanup Tops $628 Billion and Is Expected to Climb

Meanwhile, problems still persist at the nuclear plant, most notably with the ‘highly contaminated’ water being stored in tanks at the site

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That includes costs for radioactive decontamination and compensation payments, the Japan Times reported.

The public cost of cleaning up the 2011 Fukushima Daiichi nuclear plant disaster topped ¥4.2 trillion (roughly $628 billion) as of March, and is expected to keep climbing, the Japan Times reported on Sunday.

That includes costs for radioactive decontamination and compensation payments. Tokyo Electric Power Company (TEPCO) will sell off its shares to eventually pay back the cost of decontamination and waste disposal, but the Environment Ministry expects that the overall price of those activities could exceed what TEPCO would get for its shares.

Meanwhile, the taxpayer burden is expected to increase and TEPCO is asking for additional help from the government.

The Times reports:

The government estimates the proceeds from TEPCO share sale at ¥2.5 trillion, but to generate the estimated gain, the TEPCO stock price needs to trade at around ¥1,050, up sharply from current market levels of some ¥360.

In addition, the Environment Ministry expects that the cumulative total of decontamination and related costs could surpass the estimated share proceeds by the March 2017 end of the current fiscal year.

[….] TEPCO and six other power utilities charged their customers at least ¥327 billion in electricity rate hikes after Japan’s worst-ever nuclear accident. Moreover, consumers paid ¥219.3 billion or more for TEPCO, chiefly to finance the maintenance of equipment to clean up radioactive water at the plant and the operation of call centers to deal with inquiries about compensation payments.

Moreover, as Deutsche Welle noted on Monday, problems still persist at the nuclear plant, most notably with the “highly contaminated” water being stored in tanks at the site.

“There are numerous problems that are all interconnected, but one of the biggest that we are facing at the moment is the highly contaminated water that is being stored in huge steel tanks at the site,” Aileen Mioko-Smith, an anti-nuclear activist with the group Green Action Japan, told DW. “They are running out of space at the site to put these tanks, the water that is being generated on a daily basis means they have to keep constructing more, and the ones that are not welded have a history of leaking.”

“The situation with contaminated water at the site is a ticking time bomb and they don’t seem to know what they can do—other than to construct more tanks,” she said.

http://www.commondreams.org/news/2016/08/29/public-cost-fukushima-cleanup-tops-628-billion-and-expected-climb

 

August 30, 2016 Posted by | Fukushima 2016 | , , , , , | Leave a comment

Public cost of Fukushima nuclear accident cleanup topped ¥4.2 trillion as of end of March

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Electric Power Company Holdings Inc.’s stricken Fukushima No. 1 plant topped ¥4.2 trillion by the end of fiscal 2015, it was learned Sunday.

The cumulative total at the end of last March, including costs for radioactive decontamination, reactor decommissioning and compensation payments to affected people and organizations, translate into about ¥33,000 per capita.

The public financial burden is expected to increase, with Tepco seeking further government assistance.

Jiji Press scrutinized the government’s special-account budgets through fiscal 2015 for the reconstruction of areas affected by the March 2011 earthquake and tsunami. It summed up the amounts of executed budgets related to the nuclear disaster and additional electricity rates consumers and businesses were charged by Tepco and seven other regional power utilities to help finance compensation payments, among other costs.

According to the study, a total of ¥2.34 trillion was disbursed for decontamination of affected areas, disposal of contaminated waste and an interim storage facility for tainted soil. The expense was shouldered by the government, mainly through affiliated Nuclear Damage Compensation and Decommissioning Facilitation Corp.

The costs for decontamination and tainted waste disposal will eventually be financed by the proceeds from the sale of Tepco shares held by the government-backed organization. The government guaranteed the loans provided by banks for the acquisition of Tepco shares, and if the lending becomes irrecoverable due to weakness of the Tepco stock price, tax revenue will be used to repay the loans.

The government estimates the proceeds from Tepco share sale at ¥2.5 trillion, but to generate the estimated gain, the Tepco stock price needs to trade at around ¥1,050, up sharply from current market levels of some ¥360.

In addition, the Environment Ministry expects that the cumulative total of decontamination and related costs could surpass the estimated share proceeds by the March 2017 end of the current fiscal year.

A total of ¥1.1 trillion will be used from the energy special account to finance the costs related to the interim storage facility for contaminated soil. The account mostly consists of revenue of the tax for the promotion of power resources development, which is included in electricity bills.

Elsewhere, the government spent ¥1.38 trillion on projects including the decommissioning of reactors at the disaster-crippled Fukushima No. 1 plant, checks on food for radioactive contamination and building a research and development facility.

Tepco and six other power utilities charged their customers at least ¥327 billion in electricity rate hikes after Japan’s worst-ever nuclear accident. Moreover, consumers paid ¥219.3 billion or more for Tepco, chiefly to finance the maintenance of equipment to clean up radioactive water at the plant and the operation of call centers to deal with inquiries about compensation payments.

http://www.japantimes.co.jp/news/2016/08/28/national/public-cost-fukushima-nuclear-accident-cleanup-topped-%C2%A54-2-trillion-end-march/#.V8MWHTXKO-c

August 28, 2016 Posted by | Fukushima 2016 | , , , | 1 Comment