Tepco, Chubu Electric, Toshiba and Hitachi consider joint venture

22 August 2019

Tokyo Electric Power Co (Tepco) is in talks with Toshiba, Hitachi and Chubu Electric Power on a joint venture to resume the stalled Higashidori NPP project in northern Japan, The Nikkei reported on 8 August. The new company would build, operate and maintain the plant as well as handle discussions with local authorities and residents. Construction is expected to start next year at the earliest. The proposal represents the first concrete results from talks on a four-way nuclear partnership that began a year ago initiated by Tepco in the wake of the Fukushima accident.

A joint venture spreads the risks of a new plant, as well as safety costs that have risen dramamtically as a result of the stricter post-Fukushima safety standards. Both Tepco and Chubu Electric have yet to restart any of their nuclear facilities  and are financially under pressure as a result, while Hitachi and Toshiba  would benefit from the opportunity to maintain expertise threatened by their withdrawal from international nuclear projects. Early this year, Hitachi announced plans to put a UK nuclear project on hold after funding negotiations with the UK government failed and Toshiba has also withdrew from overseas nuclear business in the UK and USA after the bankruptcy of its then-subsidiary, Westinghouse.

The central government has already given the go-ahead for the Higashidori project. The Ministry of Economy, Trade and Industry, keen to see realignment in the nuclear power industry, is expected to take the necessary steps to move responsibility for the new plant from Tepco to the new venture, the Nikkei said.

Tepco broke ground on the first reactor at Higashidori after receiving approval in January 2011 with completion scheduled for March 2017 but the project was put on hold after the March 2011 disaster. The possibility of Tepco building a new nuclear facility after the Fukushima fiasco was considered unlikely but a joint venture will make the utility's association with the project less prominent.

All four companies are all   restructuring business plans for their nuclear energy operations as new construction dries up and efforts to restart existing plants stall, The Nikkei noted.

Tepco and Chubu Electric have participated in the construction and operation of boiling-water reactors, which are the same type as those at Fukushima Daiichi.  However, Tepco decided to scrap 10 reactors at the Fukushima Daiichi and Daini plants, while targeting the restart of its Kashiwazaki-Kariwa NPP in Niigata Prefecture. The two utilities aim to have the joint venture eventually take over operation of Kashiwazaki-Kariwa and Chubu Electric's Hamaoka plant, currently offline. Japan has yet to restart any boiling-water reactors, the type made by both Hitachi and Toshiba leaving their personnel with no opportunities to cultivate the technical skills required for long-term plant maintenance and repair. Toshiba and Hitachi have experience building reactors but have never operated them, raising concerns about the risks that an accident at the plant. Toshiba will also need to convince its foreign shareholders as well as outside directors constituting some 80% of its board.

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