The electricity market in Japan is divided into ten geographical regions that cover the entire country. This system was originally created in 1939 in order to stabilize the electricity supply for military purposes. It formed the basis of the current system that was established in 1951. 37 As the electricity market in the United States and other Western countries is being liberalized, so is the market in Japan. The first such reform was proposed in 2000 but opposition from the utilities blocked it. In 2015, however, with the waning political influence of the utilities after Fukushima, the government decided to proceed with liberalization of the electricity . Liberalization will make it even more difficult to build nuclear reactors because of the significant initial investment required to build them and the length of time it takes to see a return on investment.
In the first part of 2015 alone, the cost to the nine electric power utilities who own nuclear reactors of maintaining their existing capacity reached ?1.4 trillion. In 2010, Japan’s nuclear reactors generated ?4 trillion worth of electricity revenues at a cost of ?1.7 trillion in uranium fuel and other inputs. By 2014, the reactors were ?4 trillion in the red. 38 The utilities are covering this shortfall by raising prices. The market for large industrial consumers has already been liberalized. These customers are beginning to break from the reactor-owning utilities that are increasing their prices. Since , tens of thousands of large customers have rescinded their contracts with nuclear-reactor-owning utilities. Tokyo Electric Power Company (TEPCO) has lost 8.8 million kilowatts worth of sales, Chubu Electric Power has lost 1.67 million kilowatts and the Kansai Electric Power Company (KEPCO) has lost 2.65 million kilowatts. 39 Indicative of the seriousness of these losses, TEPCO’s total sales in the summer peak demand period in 2013 was 50 million kilowatts and KEPCOs was 28 million kilowatts.
It has also yet to be decided what will be done with the spent fuel
Moreover, in 2012 a new Nuclear Regulation Authority was established in response to the Fukushima accident and the regulations and safety standards governing the industry have been revised. The electric utilities cannot restart their nuclear reactors unless they are able to pass inspection under these new standards. A survey of the electric power utilities conducted by the Ministry of Economy, Trade, and Industry estimated the additional cost of implementing these safety measures at ?100 billion per reactor. 40 In , it was reported that the electric power utilities who own nuclear reactors would need to come up with ?2.37 trillion to pay for the additional safety measures. 41
The government grants a monopoly on both the generation and supply of electricity to one electric power utility in each region
There were 54 functioning nuclear reactors in Japan prior to the Fukushima accident. The decomissioning of the six reactors housed at the Fukushima Daiichi plant has already been , another five aging reactors were slated for decommissioning after they were deemed not to be worth further investment. Of the remaining 43 reactors, by the electric power utilities had made applications to the NRA for reactor safety inspections for 25 of the remaining 43 reactors with the intention of restarting them. A Reuters investigation of the electric power utilities that included interviews with experts and electricity market players found that an estimated 14 reactors have a strong possibility of passing. 42 In , when another aging reactor in Shikoku was slated for decommissioning, Shikoku electricity online installment loans Missouri company estimated that 36 million dollars would be required for decommissioning while 1.6 billion dollars would be required for safety measures to pass new regulations. 43
The cost of constructing the as-yet-incomplete Rokkasho Reprocessing Plant in Aomori prefecture has already tripled initial estimates and now stands at ?2.3 trillion. The opening of the facility has been postponed 22 times since 2009. The spent fuel is currently being stored in pools at each nuclear power plant. If the reprocessing facility does not work smoothly, the pools at some plants will reach capacity in just three more years of operation. 44
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