2 JAPAN’S ENERGY POLICY AND COMMUNITY POWER …
37
Reasons to Keep Nuclear Power
Plants for Power Companies
Why cannot Japan relinquish its nuclear power plants? The Fukushima
accident has clearly shown that there is no such thing as absolute safety
in terms of nuclear power generation, and that risks remain especially
high for an earthquake-prone country like Japan. It has also demonstrated
that Japan’s electricity supply is not adversely affected by the absence of
nuclear energy, as all nuclear power plants were offline for twenty-three
months from September 2013 to August 2015.
Electric power companies are afraid that if they decide to change
their business plan to zero nuclear energy, they will suffer extraordinary
losses as they lose asset value in terms of their nuclear power generation
plants, equipment, and nuclear fuel. If this extraordinary loss exceeds a
company’s net asset value, the company technically becomes insolvent
and fails. As an extraordinary loss cannot be included in the costs used
to calculate electricity rates, the companies cannot cover the loss by way
of higher electricity charges. Thus, the electric power companies that are
highly dependent on nuclear power are against denuclearization for fear
of corporate failure (Citizens’ Commission on Nuclear Energy ed. 2015,
pp. 198–199).
In order to mitigate such effects, changes to the current accounting
system will be needed. It should be allowed to depreciate nuclear power
generation plants for a certain period after decommissioning. In fact,
some changes were made to the accounting system in October 2013. We
need to work out a transparent mechanism with a clear division of responsibilities between the national government and electric power companies
in order to avoid the disruption of insolvency and business failure.
Rush of New Coal-Fired Plants Across the Nation
After the Fukushima accident, the electricity market was finally deregulated, which had been a major challenge for the government and power
companies since the late 1990s. However, one result of the introduction of deregulation has been to stimulate a rush of new coal-fired power
plants across Japan. After 2012, the construction of 50 new plants was
announced (approximately 43 GW of capacity). This will double the total
electricity output of coal power plants in Japan. If all these new plants start
operations, Japan’s estimated total GHG emissions in 2030 will reach
37
Reasons to Keep Nuclear Power
Plants for Power Companies
Why cannot Japan relinquish its nuclear power plants? The Fukushima
accident has clearly shown that there is no such thing as absolute safety
in terms of nuclear power generation, and that risks remain especially
high for an earthquake-prone country like Japan. It has also demonstrated
that Japan’s electricity supply is not adversely affected by the absence of
nuclear energy, as all nuclear power plants were offline for twenty-three
months from September 2013 to August 2015.
Electric power companies are afraid that if they decide to change
their business plan to zero nuclear energy, they will suffer extraordinary
losses as they lose asset value in terms of their nuclear power generation
plants, equipment, and nuclear fuel. If this extraordinary loss exceeds a
company’s net asset value, the company technically becomes insolvent
and fails. As an extraordinary loss cannot be included in the costs used
to calculate electricity rates, the companies cannot cover the loss by way
of higher electricity charges. Thus, the electric power companies that are
highly dependent on nuclear power are against denuclearization for fear
of corporate failure (Citizens’ Commission on Nuclear Energy ed. 2015,
pp. 198–199).
In order to mitigate such effects, changes to the current accounting
system will be needed. It should be allowed to depreciate nuclear power
generation plants for a certain period after decommissioning. In fact,
some changes were made to the accounting system in October 2013. We
need to work out a transparent mechanism with a clear division of responsibilities between the national government and electric power companies
in order to avoid the disruption of insolvency and business failure.
Rush of New Coal-Fired Plants Across the Nation
After the Fukushima accident, the electricity market was finally deregulated, which had been a major challenge for the government and power
companies since the late 1990s. However, one result of the introduction of deregulation has been to stimulate a rush of new coal-fired power
plants across Japan. After 2012, the construction of 50 new plants was
announced (approximately 43 GW of capacity). This will double the total
electricity output of coal power plants in Japan. If all these new plants start
operations, Japan’s estimated total GHG emissions in 2030 will reach