The smiles have returned to the “nuclear village.”
After more than a year of soaring costs, sinking profits and doubts about future operations, the electric power industry gladly welcomed the Liberal Democratic Party's return to power.
The Dec. 16 Lower House election campaign was filled with promises to phase out nuclear power, including the outgoing Noda administration’s call to shut down all nuclear reactors by the 2030s.
Such promises were not included in the platform of the LDP, long supported by the electric power industry. Its overwhelming victory in the election is expected to reverse the anti-nuclear course that was set in motion after the Fukushima nuclear disaster last year.
“The energy strategy that plans to halt all nuclear reactors by the 2030s poses an excessively great challenge,” Makoto Yagi, chairman of the Federation of Electric Power Companies of Japan, said in a statement released Dec. 17. “We ask the new administration to review it.”
Yagi, also president of Kansai Electric Power Co., emphasized that nuclear power is a key energy source for Japan.
“It is important for our country to simultaneously diversify energy sources, including nuclear power, and achieve a stable energy supply, environmental protection and economics,” he said.
Japan's 50 nuclear reactors were shut down after the disaster at the Fukushima No. 1 nuclear power plant in March 2011. Only two have been brought back online.
Utilities have argued for prompt reactor restarts, citing the burden of buying additional fuel for their thermal power plants.
“After a change in government, they will listen to our opinions,” a senior Kansai Electric Power official said.
Investors share the industry’s optimism.
Stock prices of the nation’s 10 regional electric utilities all climbed on Dec. 17 after the LDP's victory.
The stock of beleaguered Tokyo Electric Power Co., operator of the Fukushima No. 1 plant, soared by more than 30 percent from Dec. 14 to its daily price limit. Kansai Electric Power’s stock also temporarily reached its daily limit.
Investors expect the LDP administration will approve restarts of idle reactors, which would improve the finances of the utilities.
“It is premature to expect that nuclear reactors will be restarted in one go, but at least the risk of electric utilities being forced to decommission new reactors has diminished,” an official at a major securities house said.
Senior LDP officials have already made remarks in line with expectations in the industry, which forms the core of the so-called "nuclear village," along with pro-nuclear bureaucrats and scientists.
Akira Amari, chairman of the LDP's Policy Research Council, stressed the need to restart reactors on a TV program broadcast Dec. 16.
“The biggest factor behind Japan’s growing trade deficits is the ballooning cost of natural gas imports,” Amari said. “Reactivating the reactors whose safety is confirmed by the Nuclear Regulation Authority will prevent Japan from depleting its wealth.”
The LDP said in its campaign platform that it will decide on reactor restarts within three years based on the results of NRA safety inspections. The party’s basic stance is that it will approve restarts as long as the NRA declares the reactors safe.
But the restart of the No. 2 reactor at Japan Atomic Power Co.’s Tsuruga plant in Fukui Prefecture remains in doubt. An NRA team that inspected the site this month cited a high likelihood that a seismic fault running beneath the No. 2 reactor building is active.
Japan Atomic Power has challenged the NRA’s assessment.
The LDP also said it will decide within 10 years on the proportion of nuclear power and other energy sources, including renewables, aiming for the "best mix of sustainable electricity sources."
During a Dec. 16 news conference after the election, LDP Secretary-General Shigeru Ishiba said although many parties called for the abolition or reduction of nuclear power in Japan, voters after all supported the LDP’s approach with its time frame of three years and 10 years.
The LDP plans to carefully study the situation before reaching any final conclusions on a basic energy plan to determine a mid- to long-term energy policy.
Japan’s energy policy is reviewed every three years.
The Democratic Party of Japan planned to compile a new plan in December, including its goal of halting all reactors by the 2030s, but the new government is expected to review that proposal.
Reforms of the electricity sector, such as plans to separate the power generation and transmission divisions of electric utilities and liberalize electricity retailing, have also become uncertain.
The DPJ government planned to draft reform proposals by the end of the year, but these changes could be stalled if the new government heeds calls from the electricity industry.
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