Deregulation threatens Japan’s nuclear industry

23 March 2001

Japan’s nuclear industry says it cannot raise the money to build new plants if rival power suppliers slash power prices.

The Japanese government began the process of deregulation by allowing non-power firms to sell electricity to major users in March 2000. This change, aimed at reviving Japan’s economy by reducing high energy prices, led to seven new companies entering the power arena. The privately-owned utilities that run the country’s 51 commercial reactors fear that the newcomers will turn to cheaper fuels, such as coal. This will force down prices and prevent nuclear companies from accumulating the capital needed to build new plants.

Pessimistic investment plans have been compounded by public anxiety over the industry’s safety record following the accident at Tokai Mura last year. Tepco recently announced that it would freeze construction of all power plants, including nuclear plants, for three to five years. But the next day it said that it would continue to build nuclear plants. Experts doubt that Tepco will actually build these plants because of the country’s impending recession.

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