Japan to Exit Nuclear Energy – Maybe

Japan to Exit Nuclear Energy – Maybe – Maybe Not

In an abrupt turnabout, the Japanese government on Wednesday stopped short of formally adopting the goal it announced just last week — to phase out nuclear power by 2040 — after the plan drew intense opposition from business groups and communities whose economies depend on local nuclear power plants.

Color me – surprised? The decision made last week had the political benefit of not impacting most of the officials who supported it and seemed to split the difference between business interests and people wanting to move away from nuclear energy. No one had to think very hard about it because nothing drastic was going to happen for quite awhile.

It turns out a lot of people gave it some thought.

But business groups criticized any move away from nuclear power as impractical and a death knell for Japanese manufacturers, which have already lost much of their competitive edge to cheaper rivals elsewhere in Asia. And communities across Japan that host nuclear facilities feared losing government subsidies, tax revenues and jobs.They also worried that they would become the final dumping ground for spent nuclear fuel stored at their plants.

I’m sure the plants weren’t planning leave fuel rods along the side of the road as they sped out of town, but the overall point seems about right – nuclear energy facilities can be very strong economic engines in their communities and shutting off those engines can have a terrible impact. (I think the 2040 date was meant to soften any such blow, but people clearly aren’t buying it.)

The role of business here was very strong:

A day earlier, the chairmen of Japan’s most prominent business associations, including the influential Keidanren group, called a rare joint news conference to demand that Mr. Noda abandon the 2040 goal. On Wednesday, they praised the cabinet’s decision.

That’s bringing to bear a heck of a lot of pressure. Business often gets a bad rap, but they are employers, too, so trying to rescue themselves means rescuing a lot of workers, too.

There’s a lot more to Hiroko Tabuchi’s story. Do read the whole thing.

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To be fair, the story referenced above, or rather its counterparts in the Japanese press, has gotten some pushback from the government.

"Don't get me wrong," [Prime Minister Yoshihiko] Noda said Friday. "We did make a cabinet decision" on the nuclear phase-out policy on September 14.

"Japan will seek a no-nuclear society in the 2030s and will realize it.

"With an unwavering attitude, we will implement various policies based on this principle. This is a huge policy change that we have made with a genuine determination."

My guess, and it has to be a guess, as relevant cabinet documents have not been translated yet, is that the government is keeping things very ambiguous to try to keep different constituencies content. If I’m right, it appears not to be working.

In any event, this is still a decision that will not have an impact until many of the politicians involved have left office and the Japanese government will have changed parties a few time – maybe more than a few, given recent history. A lot could still happen.

Fluor Invests in NuScale

You know, it’s kind of sad that no one is willing to invest in nuclear energy anymore. Wait, what? NuScale Power celebrated the news of its company-saving $30 million investment from Fluor Corp. Thursday morning with a press conference in Washington, D.C. Fluor is a design, engineering and construction company involved with some 20 plants in the 70s and 80s, but it has not held interest in a nuclear energy company until now. Fluor, which has deep roots in the nuclear industry, is betting big on small-scale nuclear energy with its NuScale investment. "It's become a serious contender in the last decade or so," John Hopkins, [Fluor’s group president in charge of new ventures], said. And that brings us to NuScale, which had run into some dark days – maybe not as dark as, say, Solyndra, but dire enough : Earlier this year, the Securities Exchange Commission filed an action against NuScale's lead investor, The Michael Kenwood Group. The firm "misap...

Wednesday Update

From NEI’s Japan micro-site: NRC, Industry Concur on Many Post-Fukushima Actions Industry/Regulatory/Political Issues • There is a “great deal of alignment” between the U.S. Nuclear Regulatory Commission and the industry on initial steps to take at America’s nuclear energy facilities in response to the nuclear accident in Japan, Charles Pardee, the chief operating officer of Exelon Generation Co., said at an agency briefing today. The briefing gave stakeholders an opportunity to discuss staff recommendations for near-term actions the agency may take at U.S. facilities. PowerPoint slides from the meeting are on the NRC website. • The International Atomic Energy Agency board has approved a plan that calls for inspectors to evaluate reactor safety at nuclear energy facilities every three years. Governments may opt out of having their country’s facilities inspected. Also approved were plans to maintain a rapid response team of experts ready to assist facility operators recoverin...

Nuclear Utility Moves Up in Credit Ratings, Bank is "Comfortable with Nuclear Strategy"

Some positive signs that nuclear utilities can continue to receive positive ratings even while they finance new nuclear plants for the first time in decades: Wells Fargo upgrades SCANA to Outperform from Market Perform Wells analyst says, "YTD, SCG shares have underperformed the Regulated Electrics (total return +2% vs. +9%). Shares trade at 11.3X our 10E EPS, a modest discount to the peer group median of 11.8X. We view the valuation as attractive given a comparatively constructive regulatory environment and potential for above-average long-term EPS growth prospects ... Comfortable with Nuclear Strategy. SCG plans to participate in the development of two regulated nuclear units at a cost of $6.3B, raising legitimate concerns regarding financing and construction. We have carefully considered the risks and are comfortable with SCG’s strategy based on a highly constructive political & regulatory environment, manageable financing needs stretched out over 10 years, strong partners...

NEI Nuclear Notes

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