38 years of nuke profit up in smoke?

Kyodo

Tokyo Electric Power Co. faces a potential damages bill exceeding its profits from nuclear power generation over a 38-year period beginning in 1970, the year it opened the crisis-hit Fukushima No. 1 plant, according to a recent study.

Kenichi Oshima, an environmental economist and professor at Kyoto-based Ritsumeikan University, estimates that Tepco in that time earned just less than ¥4 trillion, possibly equal to or less than the amount it must pay farmers, fishermen, evacuees and others affected by the nuclear crisis.

Oshima also found that the cost of nuclear power generation is higher in Japan than that of hydraulic and thermal power, contrary to a widely disseminated government estimate.

By analyzing Tepco’s financial statements, Oshima put its cumulative profits from its nuclear power business at ¥3.995 trillion between the business years of 1970 and 2007, which ended in March 2008. Tepco operates three nuclear power plants — the six-reactor Fukushima No. 1 plant, four-reactor Fukushima No. 2 plant and seven-reactor Kashiwazaki-Kariwa plant in Niigata Prefecture.

The amount of damages Tepco needs to pay is not yet known but is expected to reach trillions of yen. Some financial institutions put the figure at ¥8 trillion to ¥11 trillion.

The cost of power generation per kilowatt hour came to ¥10.68 for nuclear power, ¥9.90 for thermal power and ¥7.26 for hydraulic power on average during the 38-year period, when expenses for disposal of radioactive waste and subsidizing local governments hosting nuclear plants are added to direct costs, he said.

The cost of nuclear power rose to ¥12.23 per kwh when pumped-up water power generation using power generated by reactors at night is taken into account, the economist added.

In 2004, the Advisory Committee for Natural Resources and Energy, an advisory body to the minister of economy, trade and industry, released a report that said the cost of nuclear power generation is lower than thermal and hydraulic power.

The Federation of Electric Power Companies of Japan, an industry group formed by 10 regional power companies, has long cited the committee’s report in arguing that the cost of nuclear power generation is low.

Oshima says the cost of nuclear power generation is not inexpensive and it will rise further if damages to be paid by Tepco are included.