Japan government to tighten nuclear regulations as cost may be 50% higher than estimated

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The government is set to tighten laws and regulations related to nuclear power plants, obliging operators of existing reactors to comply with the latest safety requirements and newly designating a maximum period for the use of reactors, government sources said yesterday.

The government has come up with the plan after weighing safety concerns about old reactors as well as the failure of the operator of the crippledFukushima Daiichi power plant to properly upgrade safety measures in line with new scientific findings about the risk posed by tsunami, they said.

The revised laws and regulations will allow the government to order the suspension of a nuclear plantif its operator fails to meet the latest safety requirements, irrespective of the age of the facility, the sources said.

The tighter laws and regulations could force the operators of some reactors to decommission them if they cannot take any measures to meet the new standards, the sources added.

The government is also considering setting the maximum period for the use of a nuclear power station at around 40 years, they said.

The International Atomic Energy Agency will send a team to Japanearly next year to review the status of the country’s stress tests on idled nuclear reactors.

The mission may visit several plants, Yukiya Amano, the director general of the United Nations nuclear watchdog, told reporters today inTokyo. The schedule hasn’t been decided.

Japan’s nuclear operation rate has dropped to a record low of 13.9%, with only seven reactors operating out of 54.

The previously low was in October this year, when Japan’s average nuclear operation rate fell to 18.5%, according to data from the Federation of Electric Power Companies of Japan which began recording the rate in April 1977.

Japanese utilities are facing difficulty in restarting their nuclear reactors following the March 11 earthquake, and have been boosting oil and LNG consumption as a result.

Nuclear power generation in Japan is about 50 percent more expensive than estimated after factoring in the cost of paying for an accident like the Fukushima disaster, a government panel said.

Nuclear energy costs at least 8.9 yen (11 cents) per kilowatt hour, compared with a government estimate of 5.9 yen in 2004, the panel said in a draft report today.

Japan’s government is reviewing its energy policy after the disaster at Tokyo Electric Power Co. (9501)’s Fukushima Dai-Ichi atomic station. The government will use the panel’s findings to draw up a new energy policy that may call for reducing reliance on nuclear power.

The committee estimated a catastrophe like Fukushima would cost a minimum of about 6 trillion yen ($77 billion), the report said. Each 1 trillion yen increase raises the cost of generation by 0.1 yen per kilowatt hour, it said. The panel is headed by Katsuyuki Ishida, a senior vice-minister in the Cabinet Office.

Source: Bloomberg

Source: Bloomberg

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