Hitachi Ltd Toshiaki Higashihara CEO said on 3 November that Japan should consider a merger of domestic nuclear reactor businesses as the prospects for restarting NPPs in Japan are poor. "As a company involved in the nuclear power business over decades, we can't afford to keep the business unprofitable forever," he told reporters.

Hitachi, Toshiba Corp and Mitsubishi Heavy Industries Ltd are currently in talks to combine their loss-making domestic nuclear fuel operations. However, Higashihara said: "There will be a time when we have to think about the whole industry, not just nuclear fuel operations."

A merger of the Japanese nuclear reactor businesses could affect their overseas partners, as Hitachi has a global nuclear power alliance with General Electric Co and Mitsubishi Heavy has one with France's Areva SA. "It will be impossible for just one company to come up with a solution," Higashihara said. "It's an issue that should involve the government and various stakeholders."

Only two of Japan's 42 reactors are currently operating after they were idled in the wake of the 2011 Fukushima Daiichi disaster. Public opposition, safety concerns and other regulatory obstacles have made the outlook for further restarts uncertain.

Restructuring is also being considered in other areas. The Ministry of Economy, Trade and Industry (Meti) has proposed starting a subsidiary to manage the nuclear power business of Tokyo Electric Power Co (Tepco), hoping it will lead to an earlier restart of the Kashiwazaki-Kariwa NPP, Asahi Shimbun resported on 26 October. Meti also hopes the spinoff would boost profits to help Tepco cover the ballooning costs for the decommissioning Fukushima Daiichi and for compensating victims of the nuclear accident.

The subsidiary’s headquarters would probably be set up in Niigata Prefecture, the location of the Kashiwazaki-Kariwa facility, one of the world’s largest nuclear power stations in output capacity. The proposal was put forward at the meeting of a panel of academics and business executives discussing reform of Tepco. The ministry believes the new entity would find it easier to make profits by collaborating with other leading electric power companies.

Meti hopes this will lead to greater support from the public for a restart of the Kashiwazaki-Kariwa NPP. Two of its seven reactors have been inspected by the Nuclear Regulation Authority to assess whether they meet safety guidelines set after the Fukushima catastrophe. Restarting a reactor would add about significantly boost Tepco’s operating profits as fossil fuels for thermal plants are expensive.

Setting up the main office of the subsidiary in Niigata Prefecture is intended to appease local residents. Former Governor Hirohiko Izumida, who was cautious about a restart of the Kashiwazaki-Kariwa plant, called for the move while he was in office. New Niigata Governor Ryuichi Yoneyama welcomed the proposal but rejected a restart “under current circumstances”. He has demanded a more detailed inquiry into what went wrong during the Fukushima disaster before discussing the possible restart of Kashiwazaki-Kariwa.

Decommissioning the Fukushima NPP and compensation would remain the responsibilities of Tepco Holdings. The new subsidiary would sit alongside three other operating companies set up in April. They oversee the operation of thermal power generation, electric retailing, and electricity transmission and distribution.

Meti also said the annual decommissioning costs of the Fukushima NPP could increase from JPY80bn ($76.9m) to hundreds of billions of yen as the retrieval of melted nuclear fuel rods is proving to be technologically difficult.  The combined costs for decommissioning and compensating victims are likely to jump from an estimated JPY11,000bn to JPY18,000bn.  

Meanwhile, four electric power companies – Hokkaido, Kansai, Shikoku and Kyushu – have signed a technical cooperation agreement aimed at further enhancing safety of their pressurised water reactors. The companies said they would cooperate to promote improved safety evaluation, share their operating management know-how, and promote research and development into new technologies to improve safety at existing reactors.