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Japanese gov’t plan to export nuclear power technology to Turkey floundering

Japanese gov’t plan to export nuclear power technology floundering
A planned nuclear plant construction site is seen in Sinop, northern Turkey, in this 2012 file photo.
TOKYO — The Japanese government’s strategy to export nuclear power technology has run aground amid rising safety costs and deteriorating prospects for project profitability. While the government has aimed to maintain the country’s nuclear technology and expert resources through construction of atomic reactors abroad amid stalled nuclear plant development at home, its projects with Turkey and Britain have both hit snags.
“The Turkish government is in the midst of evaluating the project. I believe it will respond to us in some way or other,” said Shunichi Miyanaga, president of Mitsubishi Heavy Industries Ltd., in mid-December about a plan to build a nuclear power plant in Sinop, northern Turkey. Miyanaga’s comment suggested that the fate of the project had been left up to the Turkish government.
At the end of July last year, Mitsubishi Heavy told the Turkish government that the cost of the project would total somewhere around 5 trillion yen, more than doubling from the original estimate of roughly 2.1 trillion yen. As the plan envisages recovering the costs through profits from power generation at the nuclear facility, it would not become profitable unless Turkey purchases the generated electricity at a higher price than originally expected. If Turkey does not comply with the increased burden, Japan would withdraw from the plan.
The nuclear plant project was pitched by Prime Minister Shinzo Abe to then Turkish Prime Minister Recep Tayyip Erdogan in 2013. At the time, Abe vowed at a press conference in Ankara, “We will share our experiences and lessons from the (2011) disaster at the nuclear plant (run by the Tokyo Electric Power Co. in Fukushima) with the rest of the world, and will strive to contribute to enhancing the safety of nuclear power generation.”
However, the catastrophe prompted the international community to turn a wary eye toward nuclear power, leaving the costs for safety measures at nuclear plants to swell. The steep fall in the Turkish lira over the past year by more than 30 percent also added to the project’s deteriorating profitability.
Under these circumstances, Tokyo plans to propose to Ankara that it would provide comprehensive energy cooperation in such spheres as coal-fired thermal power generation and liquefied natural gas, in place of the atomic plant project. Because the nuclear power project is based on an agreement struck by both leaders, such a proposal by Tokyo could face a backlash from Ankara, but Japan’s focus is already shifting to how to withdraw from the project without undermining bilateral diplomatic ties with Turkey.
Meanwhile, a nuclear plant construction project undertaken by Hitachi Ltd. on the Isle of Anglesey in central Britain has also run into rough waters, after the project’s costs soared to approximately 3 trillion yen, about 1.5 times the initial estimate.
In May last year, Hitachi Chairman Hiroaki Nakanishi held talks with British Prime Minister Theresa May, where the latter agreed to expand her government’s support for the project. However, British citizens have been wary of the scheme out of concern that it could lead to rising electricity bills should Japan’s request to raise the sale price of electricity be accepted.
As the May administration is suffering from sagging approval ratings amid turmoil over Britain’s exit from the European Union, it is becoming increasingly difficult for London to comply with an increased burden. At home, Japanese companies are also becoming more reluctant to invest in the project out of fears of poor profitability and accident risks. Given the circumstances, Tokyo is also likely to exit the project.
The Abe administration has made the export of nuclear power technology a pillar of its growth strategy, but to little avail thus far. While the government intends to pursue measures to counter China and Russia’s aggressive drive to export nuclear plants by stepping up financial support for partner countries and through other measures, such a strategy may end up bringing more harm than good.
“The empirical values of China and Russia, where nuclear power plants are still being built, are considerably high (compared with other countries including Japan),” said Tomoko Murakami of the Institute of Energy Economics, Japan. In China, where 100 nuclear reactors are planned to be operational by 2030, state-owned companies are securing a spate of orders for nuclear power projects mainly in emerging countries, with the financial backing from the Chinese government. Russia also is said to undertake the whole process from leasing nuclear fuel to other countries to reprocessing their spent fuel, with the possible aim of boosting its diplomatic and security influence as well.
Officials in the Japanese nuclear power industry are finding a ray of hope in the Czech Republic’s plan to build a nuclear power plant, which has also attracted attention from China, Russia, South Korea and a joint venture of Mitsubishi Heavy and France’s Framatome. However, financial issues are again casting a shadow over the plan.
Tadashi Narabayashi, a specially appointed professor at the Tokyo Institute of Technology, warns that at this rate, “Japan would lose its own atomic power industry, and would have to import Chinese-made nuclear plants 20 years from now. It’s a critical situation.”
Meanwhile, a senior official of an economy-related government body said, “It is difficult for Japanese manufacturers, which can’t even build nuclear plants in their own country, to win confidence (abroad),” suggesting that the government’s strategy to export nuclear power technology in itself is unreasonable.
Gov’t to give up plan to export nuclear power reactors to Turkey
In this Nov. 6, 2018 file photo, Japan’s Prime Minister Abe, right, shakes hands with Turkish Foreign Minister Mevlut Cavusoglu at the prime minister’s office in Tokyo.
TOKYO — Japan is expected to effectively withdraw its plans to build a nuclear power plant in Turkey by asking Ankara to inject a significantly larger amount of funds amid ballooning safety costs — a demand Turkey is likely to reject — according to people familiar with the decision.
The Japanese government decided to ask for the increased coverage by Turkey as a final condition for constructing the plant. Under the current proposal, the plant is to be built by ATMEA, a joint venture of Japan’s Mitsubishi Heavy Industries Ltd. (MHI) and French nuclear plant maker Framatome, near the Black Sea coastal town of Sinop in northern Turkey.
Besides the Turkish project, another plan to export nuclear power reactors to Britain by Hitachi Ltd. also faces difficulties. If both plans fail, a growth drive strategy of the administration of Prime Minister Shinzo Abe will collapse.
The Turkish project has its roots in a 2013 joint declaration for cooperation over the construction of nuclear power plants signed by Prime Minister Abe and then Turkish Prime Minister Recep Tayyip Erdogan. Under the original plan, four medium-sized ATMEA1 reactors would be built for the start of operation in 2023.
However, the total cost estimate conducted in July 2018 by MHI for the project more than doubled from the original projection of some 2.1 trillion yen to around 5 trillion yen. The price hike occurred amid rising safety costs following the 2011 triple core meltdowns that hit the Tokyo Electric Power Co.’s Fukushima Daiichi Nuclear Power Station, as well as the finding of an active fault near the Sinop site. In addition, the Turkish lira has gone down since the summer of 2018, eroding the project’s profitability further. Tokyo therefore decided to increase the sale price of electricity to be generated by the new nuclear power station in a bid to recover project costs.
It is expected to be difficult for Ankara to accept the new condition, because it would mean the Turkish people would have to shoulder a greater financial burden. Japan and Turkey will effectively discuss how to arrange Japan’s departure from the project. In a bid to sustain their bilateral relationship, the Japanese government and MHI plan to propose to Turkey provision of high efficiency coal-fired power production technologies and other offers.
Meanwhile, Hitachi, which also manufactures nuclear reactors, has acknowledged that it faces difficulties in completing a project to build two nuclear reactors in Britain. Chairman Hiroaki Nakanishi of the company told reporters in December that he informed the British government that the plan was “at a limit” due to a surge in project costs.
Both the Turkish and British projects have been pitched directly by Prime Minister Abe, but those once promising plans now appear to be falling apart.

January 7, 2019 Posted by | Japan | , , | Leave a comment