With the decision by Hitachi Ltd. to "freeze" its plan to build two nuclear power reactors in the United Kingdom, all of the overseas nuclear power plant projects pursued by Japanese firms — with the backing of the government seeking to promote export of nuclear power technology as a key pillar of its efforts to boost infrastructure sales in overseas markets — have now effectively been derailed. Hitachi cited its judgments on the "economic rationality" of the U.K. project as the reason for halting the plan — an allusion to the declining profitability of the nuclear power business due chiefly to the surging cost of safety investments in the wake of the 2011 meltdowns at Tokyo Electric Power Company Holding's Fukushima No. 1 nuclear power plant.
Prime Minister Shinzo Abe has long taken the initiative to promote the overseas sale of Japanese nuclear power plants through top-level diplomacy. However, the nuclear power plant business cannot be a part of the nation's growth strategy if its business feasibility is in doubt. The government and related industries need to face up to the situation surrounding the nuclear power business — which continues to face difficulties domestically as well — and reassess the way forward.
The Fukushima nuclear disaster, triggered by the March 2011 Great East Japan Earthquake and tsunami, has radically changed the global nuclear power market landscape. The cost of nuclear power, which had been promoted as a relatively inexpensive and "clean" source of energy that does not emit carbon dioxide, spiked as additional safety investments inflated plant expenses.