Reactors still feared despite new rules

by Yuriy Humber and Masumi Suga

Bloomberg

The cost of restarting Japan’s nuclear power plants: ¥1.3 trillion and counting.

That is the amount power companies have committed so far on thousands of tons of reinforced concrete and steel, armies of workers, tsunami walls and seismic tests.

It has all been to meet tougher safety standards for the 48 reactors on coastlines throughout the earthquake-prone country. And also to convince regulators the defenses will withstand a quake and tsunami on an intensity of what struck the Tohoku region three years ago Tuesday, causing one of history’s worst civil nuclear disasters and shutting down the nation’s atomic plants.

As Prime Minister Shinzo Abe backs plans to restart reactors, Japan has to weigh the economic damage, as fossil fuel imports drive record trade deficits, against risks to safety and the environment. At stake are nuclear complexes designed to produce a combined 5 trillion kilowatts of energy worth ¥40 trillion, according to Penn Bowers, an energy analyst with CLSA Asia-Pacific Markets in Tokyo.

“In the short-term, economically it’s a no-brainer to restart” the idled reactors, Bowers said in an interview this month.

Units at Shikoku Electric Power Co.’s plant in Ikata, Ehime Prefecture, and Kyushu Electric Power Co.’s Sendai station in Kagoshima Prefecture are among the top contenders to win first approval to restart, he said.

The economic pressures to restart reactors mask bigger issues the nation has yet to tackle, said Tatsujiro Suzuki, vice chairman of the Atomic Energy Commission.

These include: How much of Japan’s energy, if any, should nuclear power provide in the future? What liabilities do utilities carry in case of accidents and what part should be paid for by the government? Will the nation build more atomic stations and how will they fit with a new law to split generation from transmission?

Incoming Tokyo Electric Power Co. Chairman Fumio Sudo, who was formerly president of steel maker JFE Holdings Inc., said in January that Tepco’s whole management and business model needs to be shaken up to make them competitive.

“At the moment, no one wants to link all these things together,” AEC’s Suzuki said.

As the companies pour concrete, public confidence in restarting reactors remains low following flurries of secondary accidents at Tepco’s Fukushima No. 1 plant, including leaks of hundreds of tons of radioactive water.

The economy needs nuclear power and hardware is important when it comes to safety, but it isn’t enough, Suzuki said. The industry needs a change in mentality.

“This is more difficult, because it goes beyond the technical,” Suzuki said in an interview. “You have to delve into management, policy, institutional arrangements. That may take some time. It may be about the culture.”

Japan’s nuclear culture was a highlight of the six-month independent Diet probe into the disaster led by academic Kiyoshi Kurokawa. His report in July 2012 was withering in its assessment of Tepco. The disaster was “profoundly man-made” owing to management lapses and collusion with government regulators, he said.

To merit a restoration of public trust, the industry needs to work on changing its operating culture, Kurokawa said in an interview in December.

“One of the biggest lessons from the report was to think the unthinkable,” Suzuki said.

The unthinkable happened on March 11, 2011, when the magnitude-9.0 earthquake, the biggest in Japan’s recorded history, hit off the coast of Tohoku. It generated tsunami along 860 km of coastline, leaving 18,520 people dead or missing and thousands more displaced.

At Fukushima No. 1, located on the Pacific coast, the quake and tsunami knocked out the power supply, leading to three reactor meltdowns. The radiation that was subsequently released forced the evacuation of 160,000 people in the area.

Today, the area around Fukushima No. 1 remains a public no-go zone that is policed year-round.

The disaster forced policymakers to look at other nuclear plants at risk and they zeroed in on one: the Hamaoka facility in Shizuoka Prefecture.

Decades of research by seismologists such as Katsuhiko Ishibashi had described Hamaoka as the country’s most dangerous atomic station because it is closer to Tokyo and also near an earthquake fault line.

Two months after the Fukushima meltdowns, then-Prime Minister Naoto Kan called on Chubu Electric Power Co. to shut down Hamaoka’s three operating reactors. The government has estimated there is an 87 percent chance of a magnitude-8.0 earthquake within the next 30 years in Suruga Bay, next to which the plant sits, Kan said at the time.

That request was unprecedented and left Hamaoka station chief Yusuke Kajikawa “ashamed and embarrassed,” he said.

Kajikawa said he visited the crippled Fukushima No. 1 plant two months after the 2011 crisis started to talk with Masao Yoshida, his counterpart there, who was then trying to regain control of the station.

“We had a long, frank discussion,” Kajikawa said in an interview after a tour of the Hamaoka plant, adding that he has known Yoshida for more than 20 years. “What he told me then served as the basis for the countermeasures we’re implementing now.”

The most visible change at Hamaoka is the construction of a 1.6-km-long concrete tsunami wall, reinforced with 40,000 tons of steel. It stretches across a beach in front of the plant.

When completed this year the wall will be 22 meters high. The height is based on the latest estimates that indicate an earthquake in the area would generate 19-meter-high tsunami. The wall is part of a $3 billion plan to shore up Hamaoka’s defenses as Chubu Electric seeks permission to restart the idled reactors.

Aside from the wall, the company is adding a 20-megawatt backup gas plant on higher ground at the site to power cooling systems in emergencies.

Closing all Japan’s nuclear reactors meant opening power plants burning coal, natural gas and oil to keep supplying electricity to cities and industry. All those fuels are imported.

They drove up the country’s trade deficit to a record ¥11.5 trillion last year, from ¥6.9 trillion in 2012.

Japan is spending an extra ¥10 billion a day while it keeps reactors idle, Kajikawa said.

“We’re a country with no natural resources. We can’t continue to burn such amounts of fossil fuel,” he said.

The arrival of Abe as prime minister in December 2012 gave a boost to the pro-nuclear camp. Cutting energy costs is part of his plan to revitalize the economy.

Abe’s push on nuclear shows how polarizing the issue is here.

At least three former prime ministers have publicly opposed Abe on reactor restarts, including Junichiro Koizumi, Abe’s mentor and one of the country’s most popular postwar leaders. Naoto Kan, prime minister at the time of the 2011 quake, is another.

“The reason I’m against nuclear is that people cannot fully control it,” Kan told reporters at a briefing in December.

Industrial accidents can happen, but nothing on the scale of nuclear disaster, he said. A worst-case scenario for Fukushima would have made a third of Japan’s land uninhabitable, Kan said.

Opponents also point to the cost of nuclear disasters. The government has estimated it will take ¥11 trillion and 40 years to clean up the Fukushima site.

The former prime ministers find themselves in an unusual place on the opposite side of the argument from Japan Inc.

Keidanren, the country’s largest business lobby, advocates a return to what it calls stable and cheap energy that does not rely on imports.

While more than 42,000 megawatts of nuclear reactors are sitting idle, the country has added just 5,825 megawatts of renewable energy capacity since July 2012 — the time the country introduced the world’s most lucrative subsidies for solar- and wind-power producers, according to Ministry of Economy, Trade and Industry data.

A further 26,211 megawatts of solar, wind, biomass and other renewable energy projects have been approved, though the projects will take as long as five to 10 years to complete, ministry data show.

Chubu Electric, too, added 11 wind turbines next to Hamaoka to benefit from the coastal breezes that bring surfers to the area from all over Japan. Station chief Kajikawa dismisses the idea that the turbines rival the nuclear plant.

“They ran at 26 percent capacity” in 2012, he said, pointing out the lethargic turn of the rotors. “We’d need 6,000 of them here to replace Hamaoka.”

How Japan proceeds on nuclear will ripple beyond its own borders with nations in Europe and beyond wavering over whether to purse atomic power, Wade Allison, a physics professor at Oxford University, said during a recent visit to Hamaoka.

“The world is looking at Japan and what you do with nuclear energy,” Allison said. “The faster Japan can turn the reactors on the better.”

As the question of turning reactors back on continues to divide people, plant operators face other hurdles.

The Nuclear Regulation Authority was formed in September 2012 as an independent watchdog to replace the previous regulator. Its chairman, Shunichi Tanaka, said the agency has “the world’s toughest guidelines” for operating nuclear plants.

The rules include building secondary control centers at least 100 meters from reactor buildings to manage emergency cooling systems and radiation filter vents. They also stipulate tsunami defenses must be based on the largest estimated waves from the most recent scientific assessments.

Implementing the rules needs both time and cash. The improvements at Hamaoka, for example, will not be complete until some time after 2015.

And yet the biggest changes the industry will need to show is in its attitude, Kajikawa said, citing his conversations with the late Yoshida, who led the fight to bring Fukushima No. 1 under control.

Yoshida died on July 10 last year and more than 1,000 people attended his memorial in August to pay respects to the man some say saved Japan from a much bigger nuclear disaster.

Yoshida kept repeating that the biggest changes needed among nuclear plant operators is attitude to risk, Kajikawa said.