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Sun setting on Japan’s nuclear export sector

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December 16, 2018
Post-Fukushima cost overruns may kill a giant power project in Turkey, and there are few other deals to replace it
Japan’s nuclear export industry could be dealt a fatal blow if Mitsubishi Heavy Industries pulls out of a massive project to build four large power plants on Turkey’s Black Sea coast, as reports have suggested.
The Sinop plant project in Turkey was seen as Japan’s best chance for an industry – battered and bruised after the 2011 tsunami and triple meltdown at Fukushima – to put together a workable export strategy that did not break the bank of potential international customers.
Aside from Sinop, the Japanese industry has only one viable export project still upcoming: Hitachi’s bid to build two reactors on the island of Anglesey in Britain. And even that deal is looking shaky.
Mitsubishi Heavy Industries (MHI) has not pulled the plug yet on its stake in the four-reactor project on Turkey’s Black Sea coast, but a slew of domestic media reports and talk in Tokyo, suggests that, in the face of seemingly ever-rising construction costs to meet new safety standards that have been put in place since the 2011 Fukushima disaster, the company will bail.
Fukushima legacy
When the deal was signed with Ankara in 2013, the ownership profile was: 65% awarded to a consortium made up of MHI, Itochu, France’s Areva, and GDF Suez. The other 35% was covered by Turkey’s electric power utility, Elektrik Uretim.
However, in April, Itochu pulled out of the consortium, citing cost overruns. That left the consortium with 51%, and the remaining 49% owned by the Turkish utility.
Without Mitsubishi the viability of the project is in question, sources say, unless Turkey can find a new partner or is willing to take on the project without its largest foreign partner. The Russians, who are building a nuclear complex on Turkey’s southern Mediterranean coast, might be interested.
According to Kyodo, a thorough cost evaluation was to be completed by the end of this year. Itochu waited for the report to be released before bailing out of the deal. MHI is apparently waiting for the study to be completed before deciding its next move.
When the deal with Mitsubishi was signed in 2013, the estimated cost was $18 billion for four 1,100-megawatt nuclear power plants. But overall costs have soared, passing $42 billion in April – when Itochu withdrew, and is now put at about $44 billion.
Cost increases are nothing new in the nuclear power industry, but have been exacerbated in recent years by expensive adjustments phased in to meet more stringent safety concerns following the earthquake and tsunami that destroyed four units of the Fukushima Daiichi plant. The Sinop cost rises, however, also encompass other problems encountered in construction.
Fukushima, one of the most serious nuclear accidents in history, turned most of Japan against nuclear power. Before March 11, 2011, Japan had 54 nuclear plants. All were shut down after the accident and some are slowly returning to service having passed scrutiny by the regulator. Five are expected to restart within the next five years, and eight will likely be decommissioned. But prospects for the remaining plants are unclear.
Aware that no new nuclear plant may ever be built at home amid the anti-atomic public mood, Japan’s nuclear vendors have turned to overseas exports as the Fukushima accident does not appear to have destroyed the Japanese industry brand in other countries.
Endgame for nuclear exports?
If Mitsubishi does pull out of the huge project in Turkey it will be a blow to Prime Minister Shinzo Abe, who sees international exports of nuclear technology as an important way to boost the economy. On his many trips abroad, he often acts as a salesman for nuclear exports. For example, it was a topic of discussion with Turkish President Recep Erdogan on the sidelines of the G-20 meeting in Argentina.
Details of the conversation were not revealed, but it would be a good bet that they discussed the Sinop project with the threat of Mitsubishi hanging over them, and that Abe sought ways to keep the project viable.
Meanwhile, it is not just MHI that may have doubts about the sector. Japan’s nuclear export industry has suffered plenty of setbacks in the seven years since Fukushima. Questions about the future of the sector hang over all three main players in the sector.
Toshiba, one of Japan’s big-three nuclear constructors, recently pulled out of the nuclear power business overseas after incurring huge losses in the United States.
Toshiba has also suffered something of an administrative meltdown in its quest to win construction contracts in the US. In February it finally unloaded it money-losing American subsidiary, Westinghouse, for $1 billion less than it paid to acquire the company 10 years ago.
If the export program is to remain viable, it may be in Wales, where the British government is seeking to build a two-reactor nuclear power plant on the island of Anglesey. Among those bidding for the project is Japan’s third nuclear constructor, Hitachi, through a subsidiary called Horizon Nuclear.
In the nuclear world, there are constructors – like MHI, Toshiba and Hitachi – and operators, who run the plant after it is completed, and they are not always the same. Japan learned from Korea’s successful bid to build six nuclear plants in the United Arab Emirates that offering to build and also run them – a one-stop service – is key to making sales.
Hitachi is teaming up with the Japan Atomic Power Company, which operates two plants in Japan (although both are currently shut down pending the review by regulators). The plan is to present the British with a package deal.
Now, there are worries that Hitachi might pull out of the British project. Chairman Hiroaka Nakanishi was quoted in the Times of London saying his company was “facing an extreme situation,” and that a final decision on whether to stay with the project or leave it will be made next year.
If Mitsubishi does, as is widely expected, pull out of the huge project in Turkey, the only egg left in Japan’s overseas nuclear export basket will be Wales.
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December 20, 2018 Posted by | Japan | , , , | Leave a comment

Japan’s Kansai Electric used possibly falsified Mitsubishi Materials products at reactors

TOKYO (Reuters) – Japan’s Kansai Electric Power Co said on Wednesday it has used parts in important safety equipment at two of its nuclear plants that were supplied by a unit of Mitsubishi Materials Corp with possibly falsified data.
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TOKYO (Reuters) – Japan’s Kansai Electric Power Co said on Wednesday it has used parts in important safety equipment at two of its nuclear plants that were supplied by a unit of Mitsubishi Materials Corp with possibly falsified data.
Mitsubishi Materials Corp. President Akira Takeuchi (2nd R) bows with Executive Vice President Naoki Ono (2nd L), Mitsubishi Shindoh Co. President Kazumasa Hori (L) and Mitsubishi Cable Industries Ltd. President Hiroaki Murata during a news conference in Tokyo, Japan November 24, 2017.
The utility has found it is using rubber seals from Mitsubishi Cable Industries with possible falsified specifications in dozens of locations at its Takahama and Ohi nuclear plants, a spokesman said, confirming Japanese media reports.
The discovery comes after Kansai Electric delayed the restart of one of the nuclear power stations because it needs to make checks on parts supplied by Japan’s Kobe Steel Ltd, which, like Mitsubishi Materials, is embroiled in a scandal over product specifications.
The utility has told Japan’s nuclear regulator that it has not found any immediate safety issues, the spokesman said.
Kansai Electric receives rubber seals from multiple suppliers and is having difficulties identifying which ones come from Mitsubishi Materials, he said. The company does not plan to switch suppliers, the spokesman said.
Rubber seals are used in large numbers in the extensive piping found in nuclear reactors and their cooling systems and can be subject to high temperatures and pressure.
Mitubishi Materials and Mitsubishi Cable both declined to comment on Wednesday.
Mitsubishi Materials previously said it had discovered that products with falsified specifications had been sent to more than 300 of its customers.
That was the latest in a slew of scandals to rock Japan’s manufacturing industry. Apart from Kobe Steel, similar lapses on specifications have been found at Toray Industries Inc and incorrect final inspection procedures were discovered by automakers Nissan Motor Co and Subaru Corp.
Kansai Electric’s delays and checks on Ohi reactors are further hitches to the protracted reboot of Japan’s nuclear sector, shut down in the wake of the Fukushima disaster in 2011.
Kansai Electric does not plan to close down the Takahama station for checks, or expect any additional delays on the restart of Ohi, the spokesman said.

December 21, 2017 Posted by | Japan | , , , , | Leave a comment

Mitsubishi Heavy, Japan Nuclear Fuel to invest in France’s Areva

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Mitsubishi Heavy Industries Ltd. is reportedly making final arrangements to invest tens of billions of yen in French atomic energy company Areva jointly with Japan Nuclear Fuel Ltd.

Mitsubishi Heavy Industries Ltd. and Japan Nuclear Fuel Ltd. are making final arrangements to invest tens of billions of yen in atomic energy company Areva, which is being bailed out by the French government, sources close to the matter said Thursday.

Through the investment, the heavy machinery manufacturer and the spent-fuel reprocessing firm hope to improve technical cooperation with Areva on decommissioning reactors and reprocessing nuclear fuel.

Areva has been reeling from weak global demand since the 2011 Fukushima disaster triggered a slump in the nuclear power industry.

Areva is being bailed out by the French government, which has been asking Mitsubishi Heavy to invest since last year.

MHI President Shunichi Miyanaga had said that investing in Areva, which has expertise in decommissioning procedures and fuel reprocessing, would benefit Japan as it faces the prospect of decommissioning more aging nuclear reactors amid high public concern over nuclear safety.

A major Chinese nuclear power company is also considering investing in the state-owned group.

Mitsubishi Heavy is also planning to invest in Areva’s plant-building arm in hopes of winning orders to build nuclear power plants in emerging economies where demand is growing.

The heavy machinery maker and Areva are already involved in a joint venture to develop nuclear plants with advanced reactors.

http://www.japantimes.co.jp/news/2016/12/08/business/corporate-business/mitsubishi-heavy-japan-nuclear-fuel-invest-frances-areva/#.WEtA0Vzia-d

December 9, 2016 Posted by | Japan | , , , | Leave a comment

Japan Nuclear Industry on the Defensive

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METI proposed that TEPCO would start a subsidiary to manage all its nuclear plants. Saying it would facilitate restarting the reactors at the Kashiwazaki Kariwa NPP, as since the beginning of the Tepco-owned Fukushima Daiichi nuclear plant disaster the government planned to use profits from the Tepco-owned Kashiwazaki-Kariwa NPP to finance the Fukushima Daiichi disaster costs;  and that it would also encourage collaboration among other utilities nuclear power plants, and make merger or sale easier. METI thinks such change would also encourage the public to support nuclear reactors restarting.

As the total decommissionning costs could double, Tepco would also like the rules to be changed so as not take an added large loss on their books.

One day later Hitachi announced that they consider merging their nuclear business with Toshiba and Mistubishi.

These recent new developments show Japan nuclear industry on the defensive, former PM Koizumi warned the Liberal Democratic Party could lose the next election if it focuses on the nuclear power issue.

https://dunrenard.wordpress.com/2016/10/29/industry-ministry-unveils-plan-to-split-nuclear-power-division-from-tepco/

October 30, 2016 Posted by | Japan | , , , , , , , | Leave a comment