Lithuania nuke plant snub rattles Hitachi

Kyodo

The voter rejection of a government project to construct the Visaginas nuclear plant in Lithuania in a nonbinding referendum Sunday is expected to deal a heavy blow to Hitachi Ltd., which signed a contract approved by the legislature for what would have been its first overseas atomic plant deal.

Hitachi and other Japanese manufacturers are hoping to boost their nuclear power plant business overseas because the Fukushima crisis effectively wiped out demand for new reactors in Japan. If opposition to nuclear plants grows further in Europe and elsewhere, they may have to rethink this strategy.

“It is very disappointing because it was the project at the most advanced stage among those being promoted by Japanese businesses,” a senior Hitachi official said Monday.

A little more than 60 percent of voters expressed opposition to the construction of the plant, which was planned to include a 1.3 million kw advanced boiling water reactor, far exceeding the some 30 percent in favor of the facility.

Hitachi issued a statement saying that “the result of the referendum was very regrettable.”

Since the Fukushima disaster started, Germany and Switzerland have both decided to abandon nuclear power. Japan is also promoting a strategy toward doing away with all reactors by the 2030s.

Hitachi, Mitsubishi Heavy Industries Ltd. and Toshiba Corp. have since focused their attention on the United States and other countries that plan to continue using nuclear power, as well as emerging economies faced with growing electricity demand.

“Even after the Great East Japan Earthquake, nuclear power remains an effective power source,” a Hitachi official said. “Many countries are still going ahead with construction projects.”

Mitsubishi Heavy Industries has won an order to design a nuclear power plant in the United States. In Jordan, the company has tied up with France’s Areva SA to compete with a Russian group for a contract. In Vietnam, it is lobbying for a project with the backing of the Japanese government.

Toshiba’s U.S. unit, Westinghouse Electric Co., has been stepping up its presence in the United States and China.

Hitachi announced in July 2011 that it had won priority negotiation rights for the Lithuanian project, worth ¥400 billion. It was the first deal won by a Japanese nuclear power company since the Fukushima catastrophe.

Hitachi had been hoping the Lithuanian order would serve as a stepping stone for a similar foray into other European countries as well as emerging Southeast Asian markets.

While the “no” vote on the referendum is nonbinding, its potential impact on policymakers and the public can’t be ignored.

“It will have no direct bearing on our business,” said an official with a Japanese manufacturer who nonetheless admitted it could spur public antinuclear momentum.

A Soviet-era nuclear plant accounted for more than 70 percent of electricity consumption in Lithuania in the early 1990s. It was shut down in late 2009 after the European Union requested its closure due to obsolescence as a condition for Lithuania joining the union.

The Visaginas project was thought to be essential for Lithuania to overcome energy shortages brought on by the shutdown of the old plant.

Lithuania currently imports about 80 percent of its energy from Russia. Some say that with people saying no to the nuclear power project in the referendum, Lithuania will find it difficult to achieve energy independence from Russia for some time.

A student who voted in Vilnius said the world is already leaning toward a postnuclear future. With the project requiring exorbitant costs and given the Chernobyl and Fukushima disasters, Lithuania should seek ways other than nuclear power to reduce its reliance on Russia, the student said.