For Japan, there’s no escaping Fukushima Daiichi’s shadow
Six years on, nation gropes for viable energy policy as cleanup costs soar
This Feb. 3 photo shows the No. 3 reactor unit at the stricken Fukushima Daiichi nuclear power plant.
TOKYO — Nearly six years after a massive earthquake and tsunami crippled the Fukushima Daiichi nuclear power station, the catastrophe still looms large over Japan’s energy policy.
Most of the country’s nuclear plants remain offline due to safety concerns. The finances of Tokyo Electric Power Co. Holdings — the operator of the ill-fated Fukushima facility — are in a shambles. Cleanup costs continue to mount, with no ceiling in sight.
On the night of Feb. 16, footage from inside Fukushima Daiichi’s No. 2 reactor containment vessel was beamed to Tepco’s head office in Tokyo. It was captured by a robot nicknamed “scorpion,” due to the camera on the tip of its tail, which can be pointed forward a la the arachnid.
After moving forward about 2 meters, however, the robot became stuck in material deposits several centimeters thick. It was unable to approach its intended target: a spot just under the pressure vessel, where some melted nuclear fuel is suspected to have leaked through.
Tepco hopes to decide this summer how to remove melted fuel from the plant, but as things stand, simply determining the location and quantity of the debris is a challenge.
The Ministry of Economy, Trade and Industry, which supervises the electric power industry, estimated at the end of last year that dealing with the aftermath of the Fukushima disaster would cost 21.5 trillion yen ($190 billion). That figure, which covers decommissioning the reactors and compensating victims, is roughly double the 11 trillion yen METI estimated three years ago.
The financially strapped utility will never be able to cover the costs on its own, and its straits may well grow more dire. Many experts say the costs will rise further.
Decommissioning work alone — including the disposal of contaminated water — is now estimated at 8 trillion yen, up from an earlier projection of 2 trillion yen. If the costs continue to swell, Japan’s consumers could pay a heavy price.
Forget “cheap” energy
Meanwhile, the central government is still urging the heads of local governments to approve reactor restarts in their communities, but it has stopped using the word “cheap” to describe atomic energy.
New gov’t bill would make TEPCO reserve funds for Fukushima plant decommissioning
The government on Feb. 7 submitted a legal revision bill to the Diet to stabilize funding for the decommissioning of the Fukushima No. 1 nuclear plant.
The subject of the revisions is the law establishing the Nuclear Damage Compensation and Decommissioning Facilitation Corp. (NDF), which manages the flow of funds to nuclear accident victims and the long process of dismantling the disaster-stricken Fukushima No. 1 plant.
The revisions will require plant operator Tokyo Electric Power Co. (TEPCO) to set aside funds secured through corporate restructuring with the NDF. The revisions will also give the Ministry of Economy, Trade and Industry the right to perform spot inspections of TEPCO offices to make sure the utility is making appropriate deposits.
Furthermore, the revision bill states that TEPCO must submit a reactor decommissioning plan and a financing scheme to fund that plan to the industry ministry every fiscal year. The NDF and the industry ministry will examine the utility’s decommissioning project structure, and judge if it is being properly implemented.
The government is looking to have the revisions enter force within the year, with TEPCO capital transfers to the NDF to commence as early as next fiscal year, which starts on April 1, 2017.
Last year, the industry ministry increased the total estimated cost for Fukushima No. 1 plant decommissioning from 2 trillion yen to 8 trillion yen, in preparation for the difficult work of removing the melted fuel from three of the power station’s reactors.
TEPCO’s annual revenues currently stand at about 400 billion yen, while reactor decommissioning alone is expected to cost some 300 billion yen per year. Nevertheless, the industry ministry believes the utility should be able to cover its obligations if it can improve its earning power through management restructuring and the restart of the Kashiwazaki-Kariwa Nuclear Power Plant in Niigata Prefecture.
However, the governor of Niigata Prefecture has been reluctant to green-light the restart of the Kashiwazaki-Kariwa reactors, and there is no projected schedule to bring the plant back on line. In addition, it is possible that the cost of decommissioning the Fukushima No. 1 plant reactors will continue to swell.
http://mainichi.jp/english/articles/20170208/p2a/00m/0na/007000c
Law to make Tepco retain money for decommissioning costs
Workers check a transport container and a crane in preparation for the removal of spent nuclear fuel from a pool at No. 4 reactor building of Tepco’s Fukushima No. 1 nuclear power plant in Okuma, Fukushima Prefecture, in November 2013.
The government plans to legally oblige Tokyo Electric Power Company Holdings Inc. to retain money to cover costs for decommissioning its crippled Fukushima No. 1 nuclear power plant, Jiji Press has learned.
A draft of a bill to revise the law on the Nuclear Damage Compensation and Decommissioning Facilitation Corp. states that business operators that caused nuclear accidents are obliged to deposit funds to cover related costs at the organization every fiscal year, informed sources said Friday.
By clarifying Tepco’s duty to build up funds by law, the government aims to steadily implement work to decommission the Tepco plant in Fukushima Prefecture.
The Ministry of Economy, Trade and Industry plans to submit the amendment to this year’s ordinary session of the Diet, slated to start next Friday.
The draft says the amount of money to be put aside will be decided by the organization and should be approved by the industry minister each fiscal year.
The deposited funds can be withdrawn based on a plan compiled jointly by the organization and the business operators that caused nuclear accidents and will be approved by the minister.
The revised law would allow the industry ministry and the organization to conduct on-site inspections if needed.
Tepco is set to decommission all six reactors at the Fukushima No. 1 plant, which was heavily damaged in the March 2011 earthquake and tsunami. Unprecedentedly, nuclear fuel melted at three of the six reactors.
If work to remove the melted fuel is fully launched, annual decommissioning costs are expected to balloon to several hundreds of billions of yen from the current ¥80 billion ($700 million), with the total costs seen amounting to ¥8 trillion.
The ministry is planning to have Tepco bear all the decommissioning costs.
Fukushima’s ¥8 trillion cleanup leaves foreign firms in the cold
Damaged building housing the No. 4 reactor
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.”
Fukushima costs to soar to $176 billion
Fukushima costs to soar to 20 trillion yen
TOKYO — The combined costs of paying compensation for the Fukushima nuclear disaster and the decommissioning of the plant’s reactors may be double the initial estimate, rising to more than 20 trillion yen ($176 billion), according to estimates by the country’s industry ministry.
At the end of 2013, the Ministry of Economy, Trade and Industry calculated the cost at 11 trillion yen, which has since become the government’s official estimate.
As electric companies other than Tokyo Electric Power Co., the operator of the crippled plant, will also pass part of the cost on to consumers through higher rates, an increase in the public burden is unavoidable.
According to multiple sources, the ministry has already conveyed its new estimates to members of its expert panel, which is in discussions on reforming the management structure at Tepco and measures to secure funds.
The ministry aims to reach an agreement with the Ministry of Finance during planned discussions over the expansion of an interest-free loan program from 9 trillion yen to support Tepco.
The 11-trillion estimates foresaw 5.4 trillion yen for compensation payments; 2.5 trillion yen for decontamination work; 1.1 trillion yen for the construction of interim radioactive waste storage facilities; and 2 trillion yen secured by Tepco to scrap the reactors.
The new estimates see compensation payments costing 8 trillion yen and 4-5 trillion yen for decontamination.
The cost of decommissioning reactors — a process which will span at least 30-40 years — are projected to swell to hundreds of billions of yen a year from the current 80 billion. That would add several trillion yen to the overall cost.
Combined with the cost of building interim storage facilities, the total cost is forecast to exceed 20 trillion yen.
The snowballing costs are due mainly to the expansion of the number of people eligible for damages and the difficulty of conducting decontamination work, neither of which was fully understood when the initial estimates were made.
http://asia.nikkei.com/Politics-Economy/Economy/Fukushima-costs-to-soar-to-20-trillion-yen*
Cost of Fukushima disaster expected to soar to ¥20 trillion
The overall cost of wrapping up the Fukushima nuclear disaster is now estimated at more than ¥20 trillion, nearly double the previous estimate, sources familiar with the matter said Monday.
The Ministry of Economy, Trade and Industry, which previously put the overall cost at ¥11 trillion, is considering passing on a portion of the costs, including for compensation and the decommissioning of the Fukushima No. 1 nuclear plant, to consumers via higher electricity prices, the sources said.
The aged, six-reactor plant, operated by Tokyo Electric Power Co. Holdings Inc., was plunged into a blackout by the March 2011 earthquake and subsequent tsunami, leading to three core meltdowns and the worst nuclear disaster since Chernobyl in 1986.
According to the new estimate, Tepco’s compensation payments will rise to ¥8 trillion from ¥5.4 trillion and decontamination costs will double to around ¥5 trillion.
Trillions more will be needed to decommission the reactors and deal with radioactive water at the plant, on top of the ¥2 trillion earlier estimated, the sources said.
The ministry has been discussing reforming crisis-hit Tepco and is about to draft a plan for the utility based on the new estimate within this year.
Combined with the cost of building interim waste storage facilities, foreseen to remain at ¥1.1 trillion, the total cost is forecast to surpass ¥20 trillion, the sources said.
The government is studying the possibility of expanding a ¥9 trillion interest-free loan program for Tepco that was set up by issuing government bonds to cover compensation payments and decontamination costs in areas hit by the disaster.
It is expected to take up to 30 years to recover the ¥9 trillion through payments from Tepco and other big utilities.
The government also plans to recover the expected increase in compensation payments and decontamination expenses by raising charges for transmission line usage for new electricity retailers.
In principle, Tepco needs to secure funds on its own for decommissioning the plant. The government will manage the funds, which will be established using profits generated by the utility. But it is not clear if Tepco alone can shoulder the cost.
Fukushima nuclear decommission, compensation costs to almost double: media
Japan’s trade ministry has almost doubled the estimated cost of compensation for the 2011 Fukushima nuclear disaster and decommissioning of the damaged Fukushima-Daiichi nuclear plant to more than 20 trillion yen ($177.51 billion), the Nikkei business daily reported on Sunday.
The trade ministry at the end of 2013 calculated the cost at 11 trillion yen, which was comprised of 5.4 trillion yen for compensation, 2.5 trillion yen for decontamination, 1.1 trillion yen for an interim storage facility for contaminated soil, and 2 trillion yen for decommissioning, the report said.
The new estimate raised the cost of compensation to 8 trillion yen and decontamination to 4-5 trillion yen, the cost for an interim storage facility remained steady, and decommissioning will rise by several trillion yen, it added.
The part of the cost increase will be passed on in electricity fees, it added, citing multiple unnamed sources familiar with the matter.
The ministry could not provide immediate comment.
On March 11, 2011, a massive 9 magnitude earthquake, the strongest quake ever recorded in Japan, created three tsunamis that knocked out the Fukushima-Daiichi plant, causing the worst nuclear crisis since Chernobyl a quarter of a century earlier.
The Ministry of Economy, Trade and Industry will discuss with the Ministry of Finance a possible expansion of the interest-free loan program from 9 trillion yen, to help support the finances of the Fukushima plant operator Tokyo Electric Power Co’s, the report said.
The cost of cleaning up Tokyo Electric Power’s wrecked Fukushima-Daiichi nuclear plant may rise to several billion dollars a year, from less than $800 million per year now, the Japanese government said last month.
The Mainichi newspaper reported in October that Japan’s utilities lobby expects clean-up and compensation costs from the Fukushima disaster to overshoot previous estimates by 8.1 trillion yen.
http://www.reuters.com/article/us-tepco-outlook-idUSKBN13N03G
TEPCO may struggle to find partners due to Fukushima decommissioning costs
Economy, Trade and Industry Minister Hiroshige Seko, right front, speaks at a meeting of the ministry’s expert panel on reform of TEPCO and issues related to the crippled Fukushima No. 1 nuclear power plant on Nov. 15, 2016.
Naomi Hirose, president of Tokyo Electric Power Company Holdings Inc. (TEPCO), presented a proposal to reform the operator of the crippled Fukushima No. 1 Nuclear Power Plant to the Economy, Trade and Industry Ministry’s expert panel on Nov. 15.
Under the proposal submitted by Hirose on the reform of TEPCO and issues related to the crippled Fukushima nuclear power plant, TEPCO is to collaborate with other power companies in the areas of nuclear power generation and energy transmission and distribution in an effort to boost its earning power. But if other major utilities were to work with TEPCO on a nuclear power project, questions would be raised about how to split risks such as decommissioning costs for the crippled Fukushima plant among companies concerned. Such being the case, TEPCO will likely have difficulty finding partners.
Hirose attended the closed-door expert committee meeting as an observer. Committee chairman Kunio Ito (specially-appointed professor at Hitotsubashi University) and a senior industry ministry official revealed the details of Hirose’s reform proposal at a news conference after the panel meeting.
According to details revealed at the news conference, Hirose proposed to step up TEPCO’s cooperation with other power companies on its nuclear power business including the areas of safety measures, joint technological development and overseas business operations. The industry ministry had already proposed at an expert panel meeting that TEPCO spin off its nuclear business into a subsidiary and collaborate with other utilities, among other moves. TEPCO is expected to incorporate these plans into the “New Comprehensive Special Business Plan” that is set to be revised early next year in line with discussions at expert panel meetings.
Under the current New Comprehensive Special Business Plan, TEPCO assumes reactivation of its Kashiwazaki-Kariwa Nuclear Power Plant as a source of earnings to be used to rebuild itself. But there are no prospects of the power plant being reactivated as the governor of Niigata Prefecture, which hosts the nuclear facility, is taking a cautious stance toward reactivation. The industry ministry wants to secure understanding of a plan to reactivate the nuclear power plant by improving the creditworthiness of TEPCO’s nuclear business through collaboration with other utilities. But because there is a possibility of other power companies being forced to shoulder the costs of decommissioning the crippled Fukushima plant, it remains unclear whether TEPCO will be able to cooperate with those utilities as envisioned.
A member of the expert panel was quoted as saying at the meeting, “A proper alliance cannot be formed unless ways of shutting off the risks (for possible alliance partners) are considered. Hirose also proposed that TEPCO work with other firms in the area of power generation and transmission, as well as jointly procure materials with other firms.
As for the costs of decommissioning the Fukushima No. 1 nuclear plant, which are expected to exceed the initial estimate by several trillion yen, and expenses for paying compensation to nuclear disaster victims, the expert panel confirmed plans for TEPCO to minimize financial burdens on the public through management efforts. An expert panel member was quoted as saying at the Nov. 15 meeting, “If TEPCO’s liability is defined as limited, the general public will see the move as relief measures for TEPCO. We should carefully consider public opinion.”
http://mainichi.jp/english/articles/20161116/p2a/00m/0na/008000c
Swelling Decommissioning Costs, Who’s Gonna Pay
The 2016 road report points to inflated decommissioning costs.
Three reactor meltdowns to be decommissioned, an unprecedented task in the world.
It’s a long journey, to continue to record the series “The road to decommissioning”.
Five years and half years have passed since the disaster at the Tepco’s Fukushima Daiichi nuclear power plant, among the many technical difficulties, the removal of nuclear fuel remains a challenge.
As the disaster costs keep on rising more than expected, it is becoming extremely difficult to to finance them under the current system.
Not just the increase in labor costs and technology development costs, and the cost of decontamination to enable the residents return, but also the compensation costs, all are significant. Therefore the current « system » to finance those costs has hit a wall.
TEPCO recently complained of the severity of the burden, it seeked from the country a policy to provide additional support. Who is to pay.
God only knows how much those costs will swell, and whose burden will they be.
The overall picture of the disaster costs is already hard to visualize, the sustainable “road to decommissioning” even more.
Japan’s New Utilities Object to Footing Part of Fukushima Bill
TOKYO — Japanese independent power providers are up in arms over a government proposal to have them shoulder some costs related to the fallout of the 2011 Fukushima Daiichi nuclear disaster, including compensating victims and decommissioning old reactors.
“Why should we have to pick up compensation costs for Tepco’s accident?” fumed a top official at a company selling electricity in the Tokyo area, referring to Fukushima Daiichi operator Tokyo Electric Power Co. Holdings.
Given the narrow profit margins involved in power retailing, new suppliers will likely pass these costs on to customers. More than half a year on from the full liberalization of Japan’s electricity retail market, just 3% or so of households have switched to independent power providers from big regional utilities that had monopolized the market. Some observers worry that forcing newcomers to take on some of the nuclear costs could further slow the glacial pace of the market expansion by taking away their price advantage.
The charges will likely be collected by adding them onto fees for using the regional utilities’ transmission infrastructure. “We won’t have any choice but to raise rates,” sighed an executive at a major independent power supplier.
Many people chose to make the jump from regional utilities as a protest against nuclear power. “It’d be tough to get customers to accept” covering nuclear-related costs, Tokyo Gas President Michiaki Hirose told reporters in October. Tokyo Gas is the largest of the new players with more than 500,000 service contracts.
Sure enough, Tokyo-area suppliers have heard complaints from such customers arguing that having independent providers cover decommissioning expenses would render their decision to switch pointless. “We’ve gotten questions from customers about whether we’re going to pay” these costs, said the head of an independent power company that focuses on renewable energy.
The government aims to scrap aging nuclear reactors while bringing newer facilities back online. One of the major new power providers acknowledges that it would be impossible to maintain nuclear power generation without support from the whole country.
But the new suppliers are demanding to know the details of Tepco’s compensation costs before they pay up. Many also argue that regional utilities should be forced to provide some cheap nuclear power to the electricity wholesale market so they will also feel pain if newcomers are forced to contribute funds.
Tokyo to Burden New Utilities, Public With Paying Soaring Costs of Fukushima
Struggling to curb the ever-growing cost of the fallout from the 2011 Fukushima nuclear disaster, Tokyo has come up with an idea of obliging future utility companies to pay a share of the compensation to victims, and for potential future meltdowns.
Today, Japan’s top ten conventional energy companies, including Tokyo Electric Power Company, Inc. (Tepco), which owned the Fukushima plant, are providing regular contributions to the Nuclear Damage Compensation and Decommissioning Facilitation Corp., established following the March 2011 disaster.
The Ministry of Economy, Trade and Industry (METI) proposed Wednesday that electricity companies that enter the retail electricity market after the regulatory loosening up in April 2016 will pay a share of Fukushima compensation as well, the Japa Times reported.
The agency has also designed a new system that would force Tepco, Japan’s largest electric utility, to allocate its excess profits to a fund dealing with the decommissioning of the Fukushima facilities’ reactors. Under current legislation, Tepco’s extra profits are returned to customers in the form of lowered electricity bills. METI noted that customers should have to share responsibility for the liquidation of the disaster aftermath, as they have long benefited from nuclear power. In the meantime, the costs for relieving the disaster’s consequences continue to surge. Expenditures on cleanup of the meltdown site have already exceeded the two trillion yen that the government had hoped to spend on it. By the end of the 2015 fiscal year, some 4.2 trillion yen had been spent to decommission the reactor, compensate victims and carry out radioactive decontamination at the meltdown spot.
Some 2.34 trillion yen have also been allocated to a special account for creating an interim storage facility for contaminated soil, disposal of contaminated water and for the decontamination of affected areas.
Tepco’s efforts to prevent the contamination of underground water with frozen soil barriers have not been fruitful so far, however, suggesting that new solutions and new transactions are required. METI has estimated that cleanup and decommissioning efforts will likely take more than 30 years to complete. The Fukushima Daichii plant’s reactors melted down after the Great East Japan Earthquake, followed by a disastrous tsunami. It was the most significant nuclear disaster since the Chernobyl catastrophe in 1986.
https://sputniknews.com/asia/201611031047015858-new-utilities-public-pay-fukushima/
Industry ministry to create new fund to decommission Fukushima No. 1 plant reactors
The Ministry of Economy, Trade and Industry is poised to set up a system under which Tokyo Electric Power Co. (TEPCO) will accumulate the funds necessary to decommission reactors at its crippled Fukushima No. 1 nuclear plant with the help of a government-backed organization, sources close to the ministry said.
Under the system, money that TEPCO accumulates through cost-cutting and other measures will be provided to the Nuclear Damage Compensation and Decommissioning Facilitation Corp. (NDF), which will use the funds when necessary.
The move is aimed at strengthening the central government’s involvement in decommissioning the reactors at the tsunami-ravaged power station and securing as much money as possible to cover the costs.
TEPCO has so far raised a total of 2 trillion yen to decommission reactors at the Fukushima No. 1 complex. However, several trillion yen more is highly likely to be needed to decommission the reactors.
The planned scheme will allow the NDF to manage the decommissioning plan and funds to reduce the financial burden on consumers as much as possible, and stably secure funds for decommissioning the reactors at the plant. TEPCO and its subsidiaries will be required to raise as much money as possible to decommission the reactors.
The ministry is considering a plan to add the costs of dismantling reactors at the crippled Fukushima plant to the fees that new, smaller-scale power companies pay for using TEPCO’s power cables. However, consumers are critical of the plan, which would force them to shoulder an extra burden for the decommissioning of the reactors. As such, the ministry intends to secure as much money as possible for reactor decommissioning by strengthening the national government’s involvement and reforming TEPCO’s management.
Once the estimated costs of scrapping the Fukushima No. 1 plant reactors are finalized, TEPCO will be required to set aside a massive amount of funds for such work, possibly falling in a state of capital deficit in which its liabilities exceed its assets. The ministry will therefore take legal measures to allow TEPCO to post its liabilities in installments.
http://mainichi.jp/english/articles/20161101/p2a/00m/0na/018000c
Japan mulls having new utilities help pay Fukushima victims
“Japan is considering having new electricity suppliers shoulder some of the cost of compensating those affected by the 2011 Fukushima Daiichi meltdown — a first since the market was opened up to companies besides the big regional utilities.”
The cost of scrapping Fukushima Daiichi will remain squarely on Tepco’s shoulders.
TOKYO — Japan is considering having new electricity suppliers shoulder some of the cost of compensating those affected by the 2011 Fukushima Daiichi meltdown — a first since the market was opened up to companies besides the big regional utilities.
The expense has been covered by interest-free government loans to Tokyo Electric Power Co. Holdings, which operated the disaster-stricken nuclear plant. This debt is being repaid not only by Tepco, but also other major power companies such as Kansai Electric Power and Chubu Electric Power. Some 6 trillion yen ($57 billion) has already been paid out, more than the 5.4 trillion yen estimated in fiscal 2013, and the total is expected to rise by trillions of yen.
With consumers gradually switching from regional utilities to independent power providers, the Ministry of Economy, Trade and Industry plans to ask these new players to pay a share of the compensation. Details such as how to split the burden between established and new power providers will be worked out going forward. New suppliers’ customers will be asked to contribute as well, on the grounds that they used nuclear power before the market opened up, though this could meet with a backlash from some of the companies affected.
But the cost of scrapping Fukushima Daiichi will remain squarely on Tepco’s shoulders, and the ministry will not approve rate hikes to recoup these expenses. Annual outlays are expected to soar to hundreds of billions of yen, from 80 billion yen now, once Tepco starts extracting melted fuel from the reactors in the 2020s.
The ministry plans to set up a fund to cover decommissioning costs, with the money to come from Tepco’s yearly profits. The utility will be permitted to draw from the fund to cover approved decommissioning plans. Funding gaps will be covered by government loans to be repaid by Tepco.
The company will be exempted for the time being from a requirement to cut electricity transmission charges levied on electricity retailers if profits from power transmission and distribution rise too high. The aim is to avoid placing a further burden on taxpayers while ensuring that decommissioning goes smoothly.
EDITORIAL: Cost estimate needed first to decommission Fukushima plant
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.
http://www.asahi.com/ajw/articles/AJ201610270028.html
Costs are ballooning for dismantling Japan’s Fukushima nuclear plant
“The government has estimated that decontaminating the areas around the Fukushima plant, including removing radiated topsoil, buildings and trees, will cost at least 2.5 trillion yen ($24 billion).
But experts have been warning that such estimates may be too optimistic.”
Workers check storage tanks of radiation-contaminated water at tsunami-crippled Tokyo Electric Power Co.’s Fukushima Daiichi Nuclear Power Plant in Okuma, Fukushima Prefecture, northern Japan, on March 24, 2015.
Japan’s estimate of dismantling the Fukushima nuclear plant is ballooning far beyond the utility’s estimate of 2 trillion yen ($19 billion).
A government study released Tuesday found decommissioning the Fukushima Dai-ichi plant already has cost 80 billion yen ($770 million) over the last three years.
The plant suffered multiple reactor meltdowns due to damage from the March 2011 earthquake and tsunami.
The ministry overseeing nuclear power said the decommissioning costs will continue at several hundreds of billions of yen (billions of dollars) a year.
Tokyo Electric Power Co., the utility that operated and is now decommissioning Fukushima Dai-ichi, has said decommissioning will take several decades.
Even if it were to take 30 years at an estimated annual cost at 300 billion yen ($3 billion), both conservative projections, the cost would be nearly 1 billion yen or $100 billion.
TEPCO spokesman Shinichi Nakakuki declined comment on the government projection, but he acknowledged TEPCO was still trying to determine what exactly the decommissioning effort might involve.
“It is difficult to calculate the entire cost for the decommissioning,” he said, adding that the 2 trillion yen figure had so far taken into account the effort to remove the nuclear debris, taking the example of Three Mile Island in the U.S., as well as costs and equipment needed to keep the reactors stable.
A security guard stands guard on one of the totally empty main streets in Namie, a town north of Tokyo Electric Power Company’s Fukushima Daiichi Nuclear Power Plant, Fukushima Prefecture, northern Japan, 09 March 2016.
The study did not distinguish between costs borne by the government and borne by TEPCO, which received a government bailout.
Japan has been struggling to clean up parts of the no-go zone to put the worst nuclear catastrophe since Chernobyl behind it.
The government has estimated that decontaminating the areas around the Fukushima plant, including removing radiated topsoil, buildings and trees, will cost at least 2.5 trillion yen ($24 billion).
But experts have been warning that such estimates may be too optimistic. The nuclear disaster in Fukushima displaced about 150,000 people.
http://www.chicagotribune.com/news/nationworld/ct-fukushima-nuclear-plant-20161025-story.html
Cost to scrap Fukushima nuclear plant massively underestimated, Japanese officials admit
The cost of cleaning up Tokyo Electric Power’s wrecked Fukushima Daiichi nuclear plant may rise to several billion dollars a year, from less than US$800 million now, Japan’s industry ministry said on Tuesday.
The increased cost projections appeared in ministry documents prepared for a panel tasked with devising a viable financial plan for the utility company known as Tepco, which is struggling to cope with rising costs at its Fukushima plant nearly six years after the world’s worst nuclear disaster since Chernobyl.
Japan’s Minister of the Economy, Trade and Industry, Hiroshige Seko, told reporters after the panel meeting, its second, that the government will provide a firmer estimate for annual decommissioning costs for the nuclear plant by the end of the year,
Surging decommissioning costs are being addressed by the panel but it is also looking into options including a break up of Tepco, which is under state control after an earthquake and tsunami sparked meltdowns at the Fukushima reactors in March 2011.
“A combination among nuclear operators is one possibility,” Yojiro Hatakeyama, a director at the industry ministry overseeing the electricity and gas industries, told reporters.
He did not elaborate on the government’s estimate for annual decommissioning costs after repeated questioning from reporters.
Experts say any move to merge atomic operations is likely to meet strong resistance from Japan’s other nuclear operators.
Japan has 10 nuclear operators and all have been hit by the political fallout from the disaster, which has undermined public faith in atomic energy. All but two of Japan’s 42 reactors are in shutdown mode.
Tepco shares were up 1 per cent by 0509 GMT, while the general market and other operators also gained.
The briefing material for the panel said the clean-up may require several hundred billion yen, or several billion US dollars, of funds every year, compared with 80 billion yen (US$766 million) now.
And these estimates are likely to surge when the company and the government decide how to extract melted uranium fuel debris at the plant in 2018 or 2019, a person with direct knowledge of discussions on restructuring Tepco said earlier this month.
The meltdowns of 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 Tepco is still struggling to contain radioactive water from the plant and has said it can’t predict the eventual total costs of the clean-up and decommissioning.
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, a person familiar with the situation said earlier.
Prospect of Niigata nuke plant delay threatens Tepco’s Fukushima plans
TOKYO — The election of an anti-nuclear candidate as governor of Japan’s Niigata Prefecture could hit the finances of not only Tokyo Electric Power Co. Holdings but the public as well, as the utility is relying on a reactor restart in Niigata to cover Fukushima cleanup costs.
The central government reached an arrangement in 2014 to extend up to 9 trillion yen ($86.6 billion currently) in interest-free loans to pay for dealing with the fallout of the 2011 Fukushima Daiichi nuclear plant disaster. Of this, 5.4 trillion yen is to go toward compensating those affected, with Tepco and other power companies, including Kansai Electric Power and Chubu Electric Power, to repay the loans. Another 2.5 trillion yen is earmarked for decontamination work, with the costs to be recouped through the sale of Tepco shares held by the government.
But more than 6 trillion yen in compensation has been paid out so far, and cost overruns on decontamination are seen as all but certain. Decommissioning work at Tepco’s Fukushima plant, such as extracting fuel, falls outside the 9 trillion yen framework.
The 2 trillion yen Tepco had aimed to secure on its own to pay for scrapping the plant will be nowhere near enough. The utility and Japan’s industry ministry had counted on bringing the Kashiwazaki-Kariwa nuclear plant in Niigata Prefecture back online, which would improve Tepco’s earnings by 240 billion yen a year. But Gov.-elect Ryuichi Yoneyama has indicated that he is not amenable to a quick restart.
An expert panel set up by the ministry started discussing how to handle the additional costs this month. It laid out a scenario in which improved profit margins at Tepco via restructuring, along with profits from the Kashiwazaki-Kariwa facility, would be used to minimize the amount shouldered by taxpayers.
The longer it takes to restart the plant in Niigata, the larger the hit will be to Tepco’s available funding for Fukushima costs. Though the utility will squeeze out some money via internal reforms, Tepco may use rate hikes to pass on to the public what it cannot cover itself. Tepco and other utilities already have raised rates to recoup part of the compensation costs. A top industry ministry official indicated that rate increases will also be on the table to pay for decommissioning.
Power companies besides Tepco could be affected as well. Since many nuclear plants in eastern Japan use boiling-water reactors like those at the Kashiwazaki-Kariwa plant, further delays could hold up other reactor restarts in the region.
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