It is significant for the Japanese government and businesses to take part in foreign countries' projects to construct new nuclear power plants. The feasibility and risks of these projects should be scrutinized through the cooperation of the public and private sectors.
Hitachi, Ltd. and the British government will enter into full-scale negotiations on the construction of two nuclear reactors in Britain. Hitachi said it will make a final decision next year on whether to undertake the project.
The project will cost more than 3 trillion yen, over 2 trillion yen of which will be financed by the British side. The remaining 900 billion yen will be funded by entities including Hitachi, Japanese government-affiliated financial institutions and the British government.
In the wake of the disaster at the Fukushima No. 1 nuclear power plant, nuclear safety costs have been increasing globally. Due to its overly optimistic assessment of nuclear power plant construction projects in the United States, Toshiba Corp. eventually was forced to withdraw from the projects after suffering huge losses.
Hitachi must not make the same mistake.
The biggest worry is that the project costs will surge significantly if construction becomes prolonged. To prepare for such a possibility, it is essential for the Japanese and British sides to work out details on how to share any subsequent financial burden.
Britain has a system in which the government guarantees the purchase price of electric power generated at a nuclear power plant. At which level the purchase price will be set is also a focus of the forthcoming negotiations.
As a private company, Hitachi's bargaining power is limited. The Japanese government also should get involved in the negotiations with the British side to help Hitachi conclude a final agreement with favorable terms for the firm.
Long-term vision vital
As part of its growth strategy, the Japanese government has set a target of boosting infrastructure exports to 30 trillion yen by 2020, triple the amount recorded in 2010. Hitachi's nuclear project in Britain is conducive to this strategy.
No newly built nuclear power plant has begun operating in Britain since 1995. This was in line with the British policy of breaking with nuclear power generation in the aftermath of the 1986 Chernobyl nuclear disaster.
But since the turn of the century, the reserves in the North Sea oil fields have begun to be depleted, and this has led to mounting concern about power supply shortages. Pressured to curtail greenhouse gas emissions, Britain in 2006 shifted to a policy of utilizing nuclear power generation.
Fourteen of the 15 existing nuclear reactors in Britain are expected to be decommissioned by 2030 due to their obsolescence.
Construction of new reactors can be regarded as a realistic option, but there is no other way to put it except to say that British energy policy has lacked a long-term perspective. This is a lesson that must be learned by Japan.
Japan regards nuclear power generation as "an important baseload power source." Despite this, its basic energy program makes no reference to the construction of new and additional nuclear reactors, thus resulting in little progress in discussions on the matter.
Britain has imported power from France and other countries. Japan must recognize that conditions for securing power are more difficult for Japan than Britain, although they share the feature of being island nations.
Nuclear engineers cannot be fostered if there are no future prospects, and this could lead to a decline of the nuclear power industry. Construction of new and additional nuclear reactors should be studied on the overriding premise that safety can be secured.
(From The Yomiuri Shimbun, June 23, 2018)
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