Japan's Nuclear Power Renewal Threatened by Court Challenges

  • Kansai Electric restricted from operating two Takahama units
  • Nuclear energy playing big role in Abe's energy mix plans

Japan’s courts have emerged as a threat to efforts at restarting the country’s fleet of nuclear power plants shuttered following the Fukushima disaster five years ago.

QuickTake Nuclear Power

A regional court on Wednesday restricted Kansai Electric Power Co. from operating two reactors in western Japan, the first time a court has forced plants that have already restarted to shut back down. The country’s utilities face more than two dozen lawsuits seeking to stop nuclear operations, according to the website of an organization of lawyers involved in the litigation. As of Thursday, only two of the Japan’s 43 operable reactors were running. Twenty five have applied to restart.

“This shows the judicial risk is bigger than previously thought,” Reiji Ogino, a Tokyo-based analyst at Mitsubishi UFJ Morgan Stanley Securities Co., said by phone. “It’s tough because it shows there’s no sense of security even after a reactor resumes operations. One plaintiff and one judge could make a difference.”

The Otsu District Court cited safety concerns in its decision this week to prevent Kansai Electric from operating the units at its Takahama plant. The ruling came less than two weeks after the utility restarted one of the reactors following more than two years of safety reviews by Japan’s nuclear regulator. The setback comes after a separate jurisdiction lifted an eight-month injunction in December.

Necessary Nuclear

The decision complicates Prime Minister Shinzo Abe’s post-Fukushima energy policy, which seeks to see nuclear power account for as much as 22 percent of the country’s energy mix by 2030. The ruling also challenges efforts by the utilities to cut costs from importing fossil fuels and assure Japan’s public that nuclear reactors can be operated safely.

Even after the creation of a new regulator and safety standards, much of the public remains unconvinced. About 60 percent of Japanese citizens oppose the resumption of nuclear power, according to a February survey conducted by the Nikkei Shimbun.

“Taking into account our lack of natural resources and the problem of climate change, nuclear power is necessary to ensure a stable energy supply,” Abe told reporters on Thursday. “I expect Kansai Electric to put forward even more effort explaining the safety of its reactors. Restoring public confidence is more important than anything.”

Court Delays

An earlier injunction against the Takahama restart by the Fukui District Court, which is based in an area that could be exposed in the event of an accident, was lifted in December.

“Given the previous case, it may take about eight months again,” Ogino said. “It’s totally up to a judge. If he wants, he could delay a decision by years.”

Kyushu Electric Power Co.’s Sendai No. 1 and No. 2 units, which restarted last year, are currently the only reactors fully operating in Japan after the courts rejected efforts to block their resumption.

Kansai Electric shares closed down 15 percent on the Tokyo Stock Exchange at 1,047 yen on Thursday, the biggest drop since 1987. Kyushu Electric fell 8 percent to 1,063 yen, the steepest decline since June 2013.

The Topix Electronic Power & Gas Index slid 3.1 percent compared with a 1.5 percent gain in the broader index.

“The 2030 energy mix target that the government proposed last year assumes that aside from the nuclear plants in Fukushima, all other existing and under-construction reactors in Japan will restart,” Ali Izadi-Najafabadi, a Tokyo-based analyst for Bloomberg New Energy Finance, wrote in an e-mail. “With this ruling, that 2030 government target mix looks even more doubtful.”

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