- Japan Courts the Money in Reactors
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Posted: 11 Oct 2011 10:45 PM PDT
Published: October 10, 2011
TOKYO — Even as Japan plans to phase out nuclear power as too risky for domestic use, the government is supporting a new push by Japanese industry to sell nuclear power technology to other countries.
Japanese industrial conglomerates, with the cooperation of the government in Tokyo, are renewing their pursuit of multibillion-dollar projects, particularly in smaller energy-hungry countries like Vietnam and Turkey. The effort comes despite criticism within Japan by environmental groups and opposition politicians.
It may seem a stretch for Japan to acclaim its nuclear technology overseas while struggling at home to contain the nuclear meltdowns that displaced more than 100,000 people. But Japan argues that its latest technology includes safeguards not present at the decades-old reactors at the stricken Fukushima Daiichi plant, which continues to leak radiation.
While Fukushima Daiichi could not withstand the magnitude 9 quake and the tsunami that ravaged much of Japan's northeast coast in March, Japanese officials argue, their nation has learned valuable lessons — and has good nuclear track record withstanding most earlier earthquakes.
"Many countries of the world are seriously exploring the use of nuclear power, and we have assisted them in improving nuclear safety," Japan's new prime minister,Yoshihiko Noda, said at an address at the United Nations General Assembly recently. "We will continue to answer to the interest of those countries."
Mr. Noda's government considers foreign reactor projects a way to help stimulate Japan's export-led economy, which had been struggling even before March's natural and nuclear disasters. Tokyo's backing— including financial assistance to the customer countries — has become critical in negotiating deals, especially as global confidence in nuclear safety has faltered in Fukushima's wake.
The World Nuclear Association, a trade industry group, says the world's stock of 443 nuclear reactors could more than double in the next 15 years, but analysts say that expansion will require strong support from the governments on both sides of any deal.
In early September, after a six-month hiatus following the earthquake, the Japanese government restarted talks with Vietnamese officials on a 1 trillion yen ($13 billion) project to build two reactors in southern Vietnam. The terms include possible Japanese financial aid.
The project would involve a new government-supported company whose largest shareholder is Tokyo Electric Power, operator of the damaged Fukushima Daiichi plant. The industrial conglomerates Toshiba and Hitachi, which supplied reactors to the Fukushima plant, are also investors. Ichiro Takekuro, a former executive of Tokyo Electric, is the president of the new company, called International Nuclear Energy Development of Japan.
The Vietnam project, if it proceeds, would join a roster of about two dozen other nuclear plant projects that Japanese makers are bidding or working on in countries including the United States, China, Turkey and Lithuania.
Japan's nuclear drive is a contrast to the recent announcement by Siemens, Europe's largest engineering conglomerate, that it would stop building nuclear power plants. Siemens, with headquarters in Munich, is responding to Germany's decision this year to phase out nuclear power — largely in reaction to Japan's calamity.
But makers of nuclear reactors from other countries, including Areva of France, General Electric of the United States, Russia's state-owned Rostacom and several government-backed Chinese conglomerates like China National Nuclear, are pursuing new contracts. Within Japan, Tokyo's effort has already drawn protest from nuclear opponents.
"The Japanese government's promotion of nuclear exports is clearly a double standard and a mistake," the environmental group Friends of the Earth Japan, said in September.
The opposition Liberal Democratic Party has also called for more debate on the nuclear export initiative by Mr. Noda and the ruling Democratic Party, although opinion in both parties remains divided.
"Some people are asking: Why is Japan trying to export something it rejected at home?" said Itsunori Onodera, a Liberal Democratic lawmaker and director of a parliamentary foreign policy panel charged with approving bilateral nuclear agreements. "Even if Japan ultimately does decide to continue nuclear exports, there needs to be more debate on the issue."
But analysts say Japan's top three nuclear engineering companies — Hitachi, Mitsubishi Heavy Industries and Toshiba — which had combined profit in their energy and infrastructure businesses of about 242 billion yen ($3.14 billion) in the latest fiscal year, are keener than ever to look overseas.
Only about one in five of Japan's 54 reactors — which previously met about 30 percent of Japan's electricity needs — is still in service. The rest were damaged by the tsunami, are still being put through routine tests, or have not been restarted after such tests because of local opposition.
It is unclear when any will restart. Adding to the uncertainty, on Oct. 4 a reactor in Genkai, in southern Japan, went into automatic shutdown because of problems with its cooling system. And because the government has said it will be difficult for new reactors to be built, a gradual phase-out of nuclear power is inevitable, as old reactors are retired.
But Japan is still intent on keeping industrial exports afloat at a time when the country's export-led economy faces strong headwinds: a strong yen that makes Japanese goods and services expensive on world markets, post-Fukushima energy shortfalls and stiffening competition from Asian industrial rivals.
Expensive projects like new reactors, often accompanied by ancillary business for utilities in fuel operations and maintenance, remain particularly attractive to Japanese commerce officials.
Last year, Japan's nuclear exports totaled 15 billion yen. The ruling Democratic Party had made the expansion of nuclear exports a centerpiece of its economic growth strategy before March. A trip by the former prime minister, Naoto Kan, to Vietnam last October, which gave the country a leg-up in negotiations, was seen as an early triumph.
And when Mr. Kan himself tried to shut down efforts to continue nuclear exports in July, many within his own party urged him to reconsider. If anything, Mr. Kan's successor and fellow Democrat, Mr. Noda, is more actively promoting nuclear exports than Mr. Kan did. The trade minister under Mr. Noda, Yukio Edano, who now oversees Japan's nuclear policy, had been a vocal supporter of continued nuclear exports.
Vietnam says it is happy that the deal is back on the table. Vietnam's ambassador to Japan, Nguyen Phu Binh, told the Mainichi newspaper in late August that he wanted to see construction proceed and believed Japan would "use the Fukushima crisis to learn important lessons."
Still, some Japanese companies have been forced to withdraw their nuclear bids in the wake of Fukushima.
Toshiba and Tokyo Electric withdrew from a proposed effort to expand the nuclear South Texas Project south of Houston, after the operator NRG Energy said it would scuttle the plan in light of the Fukushima crisis.
The Toshiba-Tokyo Electric team also abandoned a bid to build Turkey's second nuclear power plant after the Turkish government indicated that it was interested in a different kind of technology than the boiling water reactors that are Toshiba's specialty. Older versions of boiling water reactors were in use at Fukushima.
But that could benefit yet another Japanese company, Mitsubishi Heavy Industries, which specializes in so-called pressurized water reactors, a technology in which Turkey has shown interest. Mitsubishi has already won contracts to build three nuclear reactors in the United States, two in Texas and one in Virginia.
Japanese politicians, however, have stalled some potential overseas nuclear projects. Parliament recently postponed the approval of a nuclear agreement with Jordan that could allow Japan to bid on a planned nuclear power plant there.
One reason: the proposed site is far away from any large body of water, giving the plant no reliable way to cool its reactors to prevent a meltdown in the case of an emergency.
"After Fukushima," Mr. Onodera said, "we felt that could be a problem."
Posted: 11 Oct 2011 10:43 PM PDT
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Posted: 11 Oct 2011 05:34 AM PDT
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