March 11 (Bloomberg) -- The cost to restart Japan’s nuclear power plants: $12.3 billion and counting.
That’s the amount power companies have committed so far on thousands of tons of reinforced concrete and steel, armies of workers, tsunami walls and seismic tests.
All to meet tougher safety standards for the remaining 48 reactors on coastlines throughout earthquake-prone Japan. And to convince regulators the defenses will withstand a quake and tsunami on a scale of what struck the Fukushima area three years ago today, causing one of history’s worst civil nuclear disasters and shutting down the nation’s atomic fleet.
As Prime Minister Shinzo Abe backs plans to restart nuclear plants, the country has to weigh the economic damage as fossil fuel imports drive record trade deficits, against risks to safety and the environment. At stake is Japan’s nuclear infrastructure, which is designed to produce a further 5 trillion kilowatts of energy worth 40 trillion yen ($389 billion), according to Penn Bowers, an energy analyst with CLSA Asia-Pacific Markets in Tokyo.
“In the short-term, economically it’s a no-brainer to restart” the idled fleet, Bowers said in an interview this month.
Shikoku Electric Power Co.’s plant on Shikoku island and Kyushu Electric Power Co.’s Sendai station in the south among the top contenders to win first approval to restart, he said.
The economic pressures to restart reactors mask bigger issues Japan has yet to tackle, the nation’s Atomic Energy Commission vice-chairman Tatsujiro Suzuki said. These include: How much of Japan’s energy, if any, should nuclear provide in the future? What liabilities do utilities carry in case of accidents and what part should be paid for by the government? Will the nation build more atomic stations and how will they fit with a new law to split generation from transmission?
Policy makers “need to let the regulator do their reviews and determine whether or not these plants meet their safety standards,” Gregory Jaczko, former chairman of the U.S. Nuclear Regulatory Commission, said in an interview in Tokyo today.
Incoming Tokyo Electric Power Co. Chairman Fumio Sudo, who was formerly president of steelmaker JFE Holdings Inc., said in January that the power company’s whole management and business model needs a shake-up to make them competitive.
“At the moment, no one wants to link all these things together,” Atomic Energy Commission’s Suzuki said.
As the companies pour concrete, public confidence in restarting reactors remains low following flurries of secondary accidents at Tokyo Electric Power Co.’s Fukushima plant, including leaks of hundreds of tons of radioactive water.
The economy needs nuclear power and hardware is important when it comes to safety, but it isn’t enough, Atomic Energy’s Suzuki said. The industry needs a change in mentality.
“This is more difficult, because it goes beyond the technical,” Suzuki said in an interview. “You have to delve into management, policy, institutional arrangements. That may take some time. It may be about the culture.”
Japan’s nuclear culture was a highlight of the six-month independent parliamentary probe into the disaster led by academic Kiyoshi Kurokawa. His report in July 2012 was withering in its assessment of Tokyo Electric. The disaster was “profoundly manmade” owing to management lapses and collusion with the regulator, he said.
To merit a return of public trust the industry needs to work on changing its operating culture, Kurokawa said in an interview in December.
“One of the biggest lessons from the report was to think the unthinkable,” Suzuki said.
The unthinkable happened on March 11, 2011, when a magnitude 9 earthquake, the biggest in Japan’s recorded history, hit the country’s northeast. It generated a tsunami along 860 kilometers (534 miles) of coastline, leaving 18,520 people dead or missing and thousands more displaced.
At Tokyo Electric’s Dai-Ichi nuclear station on the coast of Fukushima prefecture, the quake and tsunami knocked out power supply, leading to three reactor meltdowns. The radiation released forced the evacuation of 160,000 people in the area, 240 kilometers north of Tokyo. Dai-Ichi today remains inside a public no-go zone that’s policed year-round.
The disaster forced Japan’s policymakers to look at other nuclear plants at risk and they zeroed in on one: Hamaoka, 189 kilometers southwest of Tokyo.
Decades of research by seismologists such as Katsuhiko Ishibashi had described Hamaoka as Japan’s most dangerous atomic station because it’s closer to Tokyo and near an earthquake fault line.
Two months after the Fukushima quake, then Prime Minister Naoto Kan called on operator Chubu Electric Power Co. to shut Hamaoka’s three operating reactors. The government has estimated there is an 87 percent chance of an 8-magnitude earthquake within the next 30 years in Suruga Bay where the plant sits, Kan said at the time.
That request was unprecedented and left Hamaoka station chief Yusuke Kajikawa “ashamed and embarrassed,” he said.
Kajikawa said he visited the crippled Fukushima plant two months after the March accident to talk with counterpart Masao Yoshida, who was then trying to regain control of the station.
“We had a long, frank discussion,” Kajikawa said in an interview after a tour of the Hamaoka plant, adding that he had known Yoshida for over 20 years. “What he told me then served as the basis for the countermeasures we’re implementing now.”
The most visible change at Hamaoka is the construction of a 1.6-kilometer-long concrete tsunami wall, reinforced with 40,000 metric tons of steel. It stretches across beach in front of the plant.
When completed this year the wall will be 22 meters high. The height is based on latest estimates that indicate an earthquake in the area would generate a 19-meter tsunami. The wall’s part of a $3 billion plan to shore up Hamaoka defenses as Chubu seeks permissions to restart the reactors.
Aside from the wall, Chubu is adding a 20-megawatt back-up gas plant on higher ground at the site to power cooling systems in emergencies.
Closing all Japan’s nuclear reactors meant opening power plants burning coal, natural gas and oil to keep supplying electricity to Japan’s cities and industries. All those fuels are imported. They drove up the country’s trade deficit to a record 11.5 trillion yen ($113 billion) last year, from 6.9 trillion yen in 2012.
Japan is spending an extra 10 billion yen a day while it keeps reactors idle, Kajikawa said.
“We’re a country with no natural resources. We can’t continue to burn such amounts of fossil fuels,” Kajikawa said.
The arrival of Abe as prime minister in December 2012, gave a boost to the pro-nuclear camp. Cutting energy costs is part of his plan to revitalize the economy.
Abe’s push on nuclear shows how polarizing the issue is in Japan.
At least three former prime ministers have publicly opposed the current premier on reactor restarts, including Junichiro Koizumi, Abe’s mentor and one of Japan’s most-popular postwar leaders. Naoto Kan, prime minister at the time of the 2011 quake, is another.
“The reason I’m against nuclear is that people cannot fully control it,” Kan told reporters in a briefing in December.
Industrial accidents can happen, but nothing on the scale of nuclear, he said. A worst-case scenario for Fukushima would have made a third of Japan’s land uninhabitable, Kan said.
Opponents also point to the cost of nuclear accidents. The government has estimated it’ll take 11 trillion yen and 40 years to clean up the Fukushima site.
The former prime ministers find themselves in an unusual place on the opposite side of the argument from Japan Inc.
Keidanren, the country’s largest business lobby, advocates a return to what it calls stable and cheap energy that doesn’t rely on imports.
As over 42,000 megawatts of nuclear reactors sit idle, Japan’s added just 5,825 megawatts of renewable energy capacity since July 2012 -- the time the country introduced the world’s most lucrative subsidies for solar and wind-power producers, according to Ministry of Energy, Trade and Industry data.
A further 26,211 megawatts of solar, wind, biomass and other renewable energy projects have been approved, though the projects will take as long as five to 10 years to complete, ministry data show.
Chubu Electric, too, added 11 wind turbines next to Hamaoka to benefit from the coastal breezes that bring surfers to the area from all over Japan. Station chief Kajikawa dismisses the idea that the turbines rival the nuclear plant.
“They ran at 26 percent capacity” in 2012, Kajikawa said, pointing out the lethargic turn of the rotors. “We’d need 6,000 of them here to replace Hamaoka.”
How Japan proceeds on nuclear will ripple beyond its own borders with nations in Europe and beyond wavering over whether to purse atomic power, Wade Allison, a physics professor at Oxford University, U.K., said during a recent Hamaoka visit.
“The world is looking at Japan and what you do with nuclear energy,” Allison said. “The faster Japan can turn the reactors on the better.”
That’s not the view of Japan’s citizens.
According to this month’s poll published by the Tokyo Shimbun newspaper, 69 percent of respondents said nuclear power should be phased out over time or immediately. The March 1 and 2 poll surveyed 3,000 people with a 58 percent response rate.
As the question of turning reactors back on continues to divide Japan, plant operators face other hurdles.
The Nuclear Regulation Authority was formed in September 2012 as an independent watchdog to replace the previous regulator. Its chairman, Shunichi Tanaka, said the agency has “the world’s toughest guidelines” for operating nuclear plants.
The rules include building secondary control centers at least 100 meters from reactor buildings to manage emergency cooling systems and radiation filter vents. They also stipulate tsunami defenses must be based on the largest estimated waves from the most recent scientific assessments.
Implementing the rules needs time as well as cash. The improvements at Chubu Electric’s Hamaoka, for example, will not be complete until after 2015.
And yet the biggest changes the industry will need to show is in its attitude, Kajikawa said, citing his conversations with the late Yoshida, who led the fight to bring under control the Dai-Ichi station.
Yoshida died on July 10 last year and more than a thousand people attended his memorial in August to pay respects to the man some say saved Japan from a much worse nuclear disaster.
He led the engineers known as the Fukushima Fifty that stayed at the plant as reactor buildings exploded amid the threat of repeated earthquake aftershocks.
Yoshida kept repeating that the biggest changes needed among nuclear plant operators is attitude to risk, Kajikawa said.
“Of course, it’s not just the equipment and facilities, we have to train people to deal with such emergencies,” Kajikawa said. “You need to plan for anything.”