Who will pay for decommissioning the Fukushima reactors? via Nikkei Asian Review

TOKYO — Energy policy was not high on the agenda in Sunday’s upper house election in Japan, in which the ruling Liberal Democratic Party consolidated its power. But Prime Minister Shinzo Abe, the Japanese people and the country’s power companies are facing a difficult question over the fate of the future of nuclear power in Japan: who will foot the costly bill for decommissioning the crippled Fukushima Daiichi nuclear power plant?


Workers engaged in the cleanup effort can now buy the sweets at a convenience store that opened at the site in March. “Every day, we sell at least 50,” a clerk said. This represents a significant improvement in working conditions. In addition, last year, a large lounge and a cafeteria opened, providing the 6,000-plus workers with hot meals for the first time.

“Decommissioning is a project that will last 30 or 40 years, and we will have to pass the work on to future generations,” said Akira Ono, who stepped down as the plant’s manager at the end of June. “We must turn this place from a disaster site to a decommissioning site,” he added.


“The overall decommissioning is estimated to cost over 10 trillion yen ($98 billion),” a government official said. But nobody mentions who will pay the bill and how.

Currently, compensation and decontamination are being covered by the state, on Tepco’s behalf, without charging interest. Tepco and other power companies will eventually have to reimburse the government for compensation payouts through a pool of contributions. The government will recoup decontamination costs by selling the Tepco shares it owns.

Under this program, introduced immediately after the nuclear accident so that Tepco could meet all of its compensation obligations without going bankrupt, 11 power companies that operate nuclear reactors, including Tepco, together made a general contribution of 163 billion yen in the fiscal year to March. Tepco added another 70 billion yen as a special contribution. Although general contributions are meant to create a contingency fund for any future severe accidents at the country’s electric companies, they are in reality being used to cover Fukushima-related compensation claims.


So, who will bear the cost? What about other nuclear-related fees presently added to electricity bills, such as one for the cost of reprocessing used nuclear fuel? Is it possible to pass on the decommissioning costs, which are not yet determined but surely will be massive, to consumers?

“If Japan is to continue using nuclear power, it needs to have a long-term perspective, including about how nuclear power stations should be operated, rather than making ad hoc plans,” said Noriko Endo, a specially appointed professor at Keio University.

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