As part of Japan’s efforts to rebuild its nuclear power industry after the 2011 Fukushima Daiichi disaster and the subsequent fall in confidence in nuclear power plants, the government is now considering a radical overhaul that will merge the companies operating the country’s 50 operating reactors, into one organisation.
The new company would be owned by Japan’s nine regional utilities: Tokyo Electric Power Co., Hokkaido Electric Power Co., Tohoku Electric Power Co., Chubu Electric Power Co. (9502), Kansai Electric, Hokuriku Electric Power Co. (9505), Chugoku Electric Power Co., Shikoku Electric Power Co., and Kyushu Electric Power Co.; as well as two wholesale energy utilities, Japan Atomic Power Co., and Electric Power Development Co..
Taku Yamamoto, the Chair of the ruling Liberal Democratic Party’s (LDP) energy committee, said that the government will offer financial support, and local reactor makers will provide the technical support.
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The idea behind the shakeup is to help Tepco shoulder the astronomical costs of the Fukushima clean-up (expected to rise to as much as $250 billion), preventing it from collapsing into bankruptcy, and avoiding blackouts in Tokyo. Some of the profits earned by the new company will be used to pay for the clean-up at the stricken power plant, and the victim compensation that Tepco will have to pay.
Yamamoto said that “the plan is based on Tepco’s profits covering Fukushima costs without taxpayers’ money and to increase the government’s role in the nuclear industry. Who’s going to like a bankruptcy of Tepco? The company has to go on working hard for the Fukushima disaster until it dies.”
Since the Ohi nuclear power plant was shut down for safety checks in September, all 50 reactors in Japan are now offline, and none are allowed to restart until they have complied with the Nuclear Regulation Authority’s new safety review; which is behind schedule and unlikely to be ready until the end of March next year.
Bloomberg notes that other plans to help Tepco survive the huge financial burden were also proposed. Such as a proposal by Tadamori Oshima, the head of the LDP’s 2011 earthquake reconstruction taskforce, that Tepco form a separate company whose sole responsibility would be to deal with the decommissioning of the Fukushima plant, and who would be aided by the government.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com