Aging Reactors Mean Japan Faces $13B in Costs

More than a third of Japan’s nuclear reactors will need to apply for license extensions within five years or face decommissioning at a time when the industry’s safety record is in tatters after the Fukushima disaster.

The country’s 54 reactors were licensed for 30 years and operators can apply for 10-year extensions to a maximum life of six decades. Twenty-one are nearing renewal, according to data from utilities and the World Nuclear Association. Of those seven will enter their fifth decade if extensions are granted, which should be avoided, according to a professor of metallurgy.

“Nuclear reactors shouldn’t be in operation for more than 40 years,” said Hiromitsu Ino at the University of Tokyo. “You can renew electrical wiring and other parts but you can’t do anything with their pressure vessels. They just get old and deteriorate, increasing the risk of accidents.”

Closing down about 17,000 megawatts of capacity, enough to power nearly 14 million average U.S. homes, would add to the electricity supply crunch that this summer resulted in Japan’s first mandatory power savings measures since the 1970s. It would also trigger 1 trillion yen ($13 billion) in decommissioning costs, according to estimates by Kazuya Idemitsu, a professor of materials engineering at Kyushu University.

Opinions polls show about 70 percent of the Japanese public wants to reduce reliance on nuclear power after the March earthquake and tsunami caused three meltdowns at the Fukushima Dai-Ichi station. One of the damaged reactors was certified to run for a fifth decade only a month earlier.

Defraying Costs

Japanese utilities set aside part of their profits to cover costs for decommissioning, which include packaging radioactive waste for storage and dismantling the station. Kansai Electric Power Co., the most nuclear-reliant of Japan’s utilities, in 2008 had 299 billion yen in reserve for decommissioning, according to its website.

Fourteen 30-year-old units in Japan need permits to run 10 more years, according to the World Nuclear Association data. Two 40-year old reactors also received decade-long extensions last year. No reactor in the world has yet lasted 50 years.

“What we witnessed at Dai-Ichi was damage to an installation that was built 40 years ago and designed 50 years ago,” said Gennady Pshakin, a physicist based in Obninsk, the site of Russia’s first nuclear power plant. More recent models use better alloys and improved safety systems, he said.

Waning Support

Winning public support for extending reactor lives or building new ones won’t be easy Prime Minister Naoto Kan said on July 22. Kan said in July Japan needs to reduce its reliance on nuclear power after the Fukushima crisis, the second time in four years an atomic plant has been damaged in a natural disaster in the country.

The world experienced a boom in nuclear power before the 1979 Three Mile Island accident in the U.S. and the 1986 Chernobyl disaster in modern-day Ukraine halted the industry’s expansion outside a few countries including China and India.

Since Fukushima, Germany, Italy and Switzerland have decided to abandon nuclear power.

The U.K. has the world’s oldest operating nuclear power plant, according to the London-based World Nuclear Association. India, Japan, Russia, Switzerland and the U.S. have the next oldest stations, with 21 operating reactors in the world aged 40 years or more, according to WNA data.

Aging Units

“If we have confidence in the engineering and believe that it’s OK to run plants for more than 40 years, then we will apply for renewal,” Kansai Electric Power Co. President Makoto Yagi said earlier this month.

Still, he said that after 30 years of operation, reactors are “pretty old.” Yagi was speaking at a briefing at the company’s Mihama nuclear station to mark the anniversary of the death of five workers in an accident in 2004.

Of Japan’s nine operating reactors that will be 39 years or older in 2016, five are owned by Kansai Electric. The No. 1 unit at Mihama received an extension in November and will work at most for 50 years, Yagi said. Kansai Electric applied to extend the life of Mihama’s No. 2 unit last month, he said.

Extensions are based on the assumption that plants will run for 60 years, Tomohiro Sawada, assistant director of the nuclear power division at Japan’s Nuclear and Industrial Safety Agency, said. Assessments usually take between six months and a year, Sawada said.

Other companies that need to apply for license extensions by the middle of 2016 are Tokyo Electric Power Co., the operator of Fukushima Dai-Ichi, Chugoku Electric Power Co., Kyushu Electric Power Co., Shikoku Electric Power Co. and Tohoku Electric Power Co., which shut all its reactors after the disaster.

Extending Permits

So-called stress tests being carried out on reactors will also consider “aging problems,” Trade and Industry Minister Banri Kaieda said on Aug. 5. Units that fail the tests must be decommissioned, he said.

The U.S., which has the most nuclear reactors, licensed its plants to run for 40 years and has extended the lifespan of the majority for a further 20 years.

The original license period was based on economics and “not on limitations of nuclear technology,” according to the NRC website. Today, 70 of the 104 U.S. reactors have 60-year permits and 13 more applications are under review, the NRC said.

Upgrades come at a cost that make no sense when new nuclear plants are more efficient and have greater safety features, said Kyushu University’s Idemitsu. Opposition to building new nuclear reactors may leave the utilities with no choice, he said.

“As public opposition to new reactors grows utilities will favor keeping old units,” Idemitsu said. “That’s not good.”

To contact the reporters on this story: Yuriy Humber in Tokyo at yhumber@bloomberg.net; Masatsugu Horie in Osaka at mhorie3@bloomberg.net

To contact the editor responsible for this story: Teo Chian Wei at cwteo@bloomberg.net

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