Update: Recent Developments in Nuclear Energy Policy Issues in Japan

JFS Newsletter No.130 (June 2013)

In JFS Newsletter No. 126 (February 2013), we reported on the state of energy policy trends since the Great East Japan Earthquake, with the discussion covering the following five phases:

First phase: After March 11, 2011, all nuclear power plants eventually shut down
Second phase: Launch of a review of Japan's national strategic energy plan, and all nuclear power plants stop operation
Third phase: Protests against restarting Oi Nuclear Power Plant, and a national debate on energy policy
Fourth phase: Future of energy policy and nuclear power plants gets complicated due to political chaos
Fifth phase: Government reverts back to Liberal Democratic Party (LDP), which then announces plans to review the ousted administration's intention to eliminate nuclear power

Japan's Energy Situation after the Great East Japan Earthquake

After the LDP were returned to power in December 2012, overseas interviewers often asked me about Japan's energy policy and trends. In this article, I cover important developments on the energy front since our last report.

Pro-Nuclear Energy Policy of the Newly-Elected Abe Administration

The 46th general election of the Lower House, on December 16, 2012, resulted in the victory of the LDP, which gained many more seats than it needed for a majority. How was it possible for the LDP, which advocated maintaining or increasing the mix of nuclear power, to win such a victory even though polls showed increased public support the elimination of nuclear power? Exit surveys by the Asahi Shimbun, a leading Japanese newspaper, asked voters their stance on nuclear power and found that proportional-representation votes of respondents who answered "eliminate immediately" (14 percent of respondents) and "eliminate gradually" (64 percent) were split among non-LDP parties that supported an end to nuclear power, such as the Japan Restoration Party, the Democratic Party of Japan (DPJ), the Your Party, and the Future Party.

Post-election, LDP President Shinzo Abe stated on December 22 that the new government would "review" (with a strong connotation of "reverse") the ousted DPJ's prior intentions to halt the operation of nuclear power plants by the 2030s. The LDP formed a coalition government with the New Komeito party on December 26, despite differences between the two parties' nuclear policies.

In the lead-up to the last general election, the LDP had pledged (a) to establish the best energy mix for Japan within 10 years, and (b) to decide one-by-one whether or not off-line nuclear reactors should be re-started, with the aim of deciding the fate of all reactors within three years. Meanwhile, New Komeito clearly stated in its manifest the aim of completely ending Japan's reliance on nuclear power as soon as possible.

In his policy speech to the Diet on February 28, 2013, Prime Minister Abe said that the government would permit the restart of nuclear reactors after confirming they were safe. Abe also stated on March 6 at the plenary session of the Upper House of parliament that the government would review the previous government's decision to completely phase out nuclear energy by the 2030s.

On March 15, discussions resumed on Japan's Basic Energy Plan. Under the previous DPJ administration, eight out of 25 members on the Fundamental Issues Subcommittee supported breaking with nuclear power generation, but now only two of the total 15 members are anti-nuclear (I am no longer a member).

In preparation for the upcoming Upper House election in July 2013, some LDP lawmakers inaugurated a league on May 14 to promote the restarting of the nation's idled nuclear reactors. Reportedly, the LDP plans include resuming operations at now-idle reactors that are deemed safe, as it pledged before the election. Abe's economic growth strategies, a core of his economic strategies nick-named "Abenomics," which were endorsed by the Cabinet on June 14, listed the use of nuclear power as a front-burner issue, and said the government will promote the restart of nuclear reactors while still paying serious attention to the judgments of experts at the Nuclear Regulation Authority (NRA).

Meanwhile, a poll conducted by Asahi Shimbun on June 8 and 9 showed that 58 percent of respondents opposed the restarting of idled reactors, and 59 percent were against the Abe administration's justification of actively using nuclear power with the rationale that it was needed to spur economic growth.

At the same time, other lawmakers still oppose the use of nuclear power. Last year, a multi-partisan group to eliminate nuclear power released a list that ranked the risk levels of 50 nuclear reactors in Japan and prepared to introduce a bill to completely eliminate nuclear power. Although the number of group members was cut in half following the dramatic victory of the LDP in the general election, the group has recently resumed its activities.

The citizens group that has been organizing anti-nuclear power protests in front of the prime minister's office and the Diet (every Friday night since shortly after the Fukushima accident) sent a call out for people to gather for a rally and demonstration on June 2. Though the demonstrations have lost their former enthusiasm, the organizers said that roughly 85,000 citizens unhappy with the direction of the government's present moves showed up for the protest.

Activities of Japan's Nuclear Regulation Authority (NRA)

The NRA now has a major role in deciding the future Japan's nuclear power and the restart of the power plants. In response to the accident at the Fukushima Daiichi nuclear power plant, the government established the NRA and its secretariat on September 19, 2012 (by passing the Act for Establishment of the NRA) with the aim of securing the independence of the NRA and integrating the activities of nuclear regulation authorities.

Its first major role was to establish new safety standards for nuclear power plants, of which there are two streams: standards for severe accident measures to prepare for natural disasters above design scenarios, and terrorist attacks, and standards for earthquakes and tsunamis. The authority proposed the new safety standards after discussions among its expert panel and after conducting procedures to collect public comments.

Its severe accident measures to prevent core damage and failure of containment vessels in the event of an emergency have been legally mandated, for the first time, and require the installation of a second control room to cool the nuclear reactors remotely. Boiling water-type reactors, the same type as the Fukushima Daiichi reactors, cannot be restarted without equipping them with filtered venting systems. It is predicted, therefore, that of the 50 reactors in Japan, 26 cannot be restarted for a while, because it will take a few years to install the new systems.

As for tsunami measures, although the previous guidelines only included a two-line description, the new standards are set for the highest possible tsunami event for individual nuclear reactors (called the "reference tsunami"), which requires extensive new measures such as the building of seawalls and waterproofing of buildings that house important machinery. The Asahi Shimbun reported that the ten major electric power companies were predicting that the cost of meeting the new safety standards, including the building of seawalls to divert a tsunami and the deployment of mobile power-supplies, was at least roughly 1 trillion yen (about U.S.$10 billion).

As is well known, Japan is prone to earthquakes. The NRA plans to elaborate in the new standards the definition of an active fault from "one that moved during the past 120,000 to 130,000 years" to "one that moved during the last 400,000 years," and it does not allow nuclear reactor buildings and other key safety facilities to be built on sites just above active faults that may slip horizontally.

This regulation could possibly affect Tokyo Electric Power Co.'s Kashiwazaki-Kariwa Nuclear Power Station and Hokkaido Electric Power Co.'s Tomari Nuclear Power Station, because they are sited on faults that have not been active for 120,000 to 130,000 years, but they were active during the past 400,000 years.

The NRA also concluded that Japan Atomic Power Co.'s Tsuruga Reactor 2 is sitting on an active fault, increasing the likelihood that the unit may be indefinitely halted or decommissioned. It also pointed out that an active fault runs just underneath Hokuriku Electric Power Co.'s Shiga Reactor 1 in Ishikawa Prefecture, and active faults are suspected to exist on the premises of Kansai Electric Power Co.'s Oi and Mihama power plants, Japan Atomic Energy Agency's Monju experimental fast-breeder reactor, and Tohoku Electric Power Co.'s Higashidori plant in Aomori Prefecture. Electric power companies and the NRA's expert panel are now conducting investigations and reviews.

A fault exists in the area of Kansai Electric Power Co.'s Oi power plant, the only one in Japan currently operating. It is still a controversy among members of the NRA's evaluation panel whether the fault is active or not, and more time will be needed for further investigation. (The plant will continue operation until a decision is made.) Likewise, investigations and reports on faults close to the Shiga and Mihama plants are behind schedule.

Under the system established by the NRA, the operating life of nuclear plants in Japan is limited to 40 years, in principle, and can be extended up to 60 years if requirements are met. In Japan, 17 nuclear reactors are over 30 years old. To apply for an extension of service life, power companies are required to conduct special inspections, more rigorous than regular inspections, as well as to take necessary measures against serious accidents based on the new safety standards.

The new safety standards go into force in July 2013. At the time of writing, the following utilities are expected to apply for the restart of their nuclear reactors: Hokkaido Electric Power Co. (Reactors 1 to 3 at the Tomari Nuclear Power Station), Kansai Electric Power Co. (Reactors 3 and 4 at the Takahama Power Station), Shikoku Electric Power Co. (Reactor 3 at the Ikata Power Station), and Kyushu Electric Power Co. (Reactors 1 and 2 at the Sendai Nuclear Power Station). The examination by the NRA is estimated to take at least six months. Even if approved by the NRA, the power companies must still get consent from the municipalities where the nuclear power stations are located before they can resume operations.

With their nuclear reactors out of operation, electric power companies are struggling with the burden of increased fuel costs for thermal power generation. These companies, as well as the industry sector calling for a stable electricity supply for economic growth, are likely to increase pressure on the NRA. Under these circumstances, Shunichi Tanaka, NRA chairman, clarifies the NRA stance, saying, "We do not pay any attention to the management issues of electric power companies. We thoroughly examine the safety of nuclear power plants so that our findings can be trusted." Will the NRA be able to continue functioning with independence? Will the power companies be able to win the consent of relevant local governments after the completion of the NRA's examination? These types of questions will be in the public spotlight.

Related Developments

Some nuclear reactors may have to be decommissioned because of the presence of active faults under the plant sites. This would mean someone will have to pay decommissioning costs. And asset values of these nuclear plants would have to be reduced to zero. Thus, the Ministry of Economy, Trade and Industry has begun considering special accounting rules that would allow utilities to avoid enormous one-time losses by spreading them out over an extended period. If all 50 nuclear reactors in Japan were decommissioned right now, the estimated total losses would be 4.4664 trillion yen (about $47.5 billion), meaning some utilities could fall into a situation where their debts exceed their assets. These impacts on the viability of power companies are said to be a major obstacle to decommissioning.

Finally, let us talk about efforts to export Japan's nuclear plant technology. Although investigations into the Fukushima nuclear power plant accident have not yet finished, and although deep-seated concerns remain about nuclear power, the Abe administration included 1.2 billion yen (about $12.8 million) in its initial budget for fiscal 2013 to facilitate research and human-resource development aimed at helping Japanese companies construct nuclear plants in foreign countries. Meanwhile, Prime Minister Shinzo Abe himself was actively involved in the sales of Japanese nuclear technology during his visits to several countries in Southeast Asia and the Middle East.

Japan has signed a nuclear cooperation pact, a precursor to the export of nuclear plant technology, with the United Arab Emirates and Turkey, and is now negotiating with Saudi Arabia and Brazil to conclude a pact. With Vietnam and Kazakhstan, which have already signed such pacts, Japan has exchanged memorandums on the construction of nuclear plants and nuclear technology cooperation. Japan has also won an order for a nuclear power plant in Turkey.

In May 2013, Prime Minister Abe agreed with Indian Prime Minister Manmohan Singh to accelerate talks to conclude a nuclear cooperation pact, with an eye to exporting nuclear plant technology to India. Opponents, however, say that it is problematic for Japan, a victim of nuclear bombs, to enter into a pact with India, a nuclear nation that is not a party to the Nuclear Non-Proliferation Treaty, no matter how attractive the country's nuclear market may be.

In this article, we have informed you of the latest developments in the Japanese energy field, with a focus on some of the major topics, and we will continue providing updates as things evolve. We hope that, in the end, Japan's energy policy will go in the direction of supporting a truly happy and sustainable society, although we may be facing a headwind at present. Please keep an eye out for future developments.

Written by Junko Edahiro