Retaining Nuclear Plants after 2030: Four Conditions

公益社団法人 日本経済研究センター
Japan Center for Economic Research
Ju
uly 25 20122
R
Retainin
ng Nucllear Plaants afteer 2030: Four C
Conditio
ons
A
At the end of
o June 201 2, the goveernment’s Energy
E
and Environme nt Council announcedd
three opptions relat ing to Japan
n’s reliancee on nuclea r power plaants throughh 2030 (seee Referencee
Table, llast page). The
T govern
nment planss to select one
o of thesee options ass early as August.
A
Wee
have esttimated thee economic impact of ccosts relatin
ng to the Fu
ukushima D
Daiichi acci dent whichh
followeed the Marc h, 2011 Greeat East Jappan Earthqu
uake, includ
ding cleanuup costs and
d insurancee
and othher expense s necessary
y to providde against th
he risk of future
f
acciddents. Baseed on thesee
estimatees, we havve in the present
p
repport highlig
ghted those points w
which we believe
b
aree
essentiaal to considder if Japan
n relies on nnuclear pow
wer plants to
t supply a certain po
ortion of itss
electric power nee ds through 2030 and aafter. A majjor premise underlyingg our propo
osals is thatt
the cauuses of thee Fukushim
ma Daiichi accident must be clarified
c
annd new ph
hysical andd
by 2030.
proceduural safety standards
s
established
e
1. Futu
ure cost esstimates for
f cleanup
p, compen
nsation an
nd decomm
missioning
g urgentlyy
needed
d: Disclosee full cost of Fukush
hima accid
dent
Thhe energy mix
m optionss that the ggovernment has only taken
t
into aaccount thee minimum
m
costs nnecessary to
t cope with
w
the F
Fukushima accident. These cossts includee radiationn
decontaamination, compensattion to viictims and decommissioning oof the rea ctors. Thee
governm
ment shoul d thereforee urgently prepare es timates wh
hich take innto consid eration thee
maximuum risks ass well. Giv ing the pubblic a correect understanding of tthe cost off continuedd
reliancee on nucleear plants, and allow
wing them to make their own choice wiill build a
foundattion for exxecuting a stable, lonng-term en
nergy policcy. Figures 1and 2 present
p
ourr
estimatees of the coosts requireed either to maintain nuclear
n
plan
nts at levelss prior to th
he accidentt
or to abbandon all reliance on
n nuclear eenergy by 2050.
2
The estimates ggiven in Fiigure 1 aree
based oon data from
m the Cost Review
R
Com
mmittee off the govern
nment’s Eneergy and En
nvironmentt
Councill and the feed-in tarriff schemee for renew
wable enerrgy launcheed in July
y. Figure 2
represennts the projjections giv
ven in our 338th Medium
m-Term Forecast for tthe Japanes e Economyy
releasedd in Marchh. Based on
n detailed iinformation
n, the full cost of thee Fukushim
ma accidentt
should bbe estimateed and publ icly disclossed by the government
g
t and the el ectric poweer industry.
ween Main
ntaining Nuclear
N
Pllants and “Exit Co
osts” from
m
Figure 1 Compaarison betw
(
Costts in 40 yea
ars)
Nuclearr Power in FY 2050 (Total
－1－
KWWSZZZMFHU.or.jp/
Japan Ceenter for Econnomic Researchh
Looking at R
Retaining Nucclear Power Plants
Figure 2 the pr ojections
o
given
g
in ou
ur 38th Medium-Ter
M
rm Forecaast for thee Japanesee
Econom
my released
d in March
h
Sources: Ministry of Environment,
E
, Japan Nucleear Fuel Limi ted, TEPCO, Nuclear and Industrial Saafety Agency,,
Japan Atoomic Energy Commission,, and Cabinett Secretariat (Forecast
(
by JCER)
J
2. Esttablish an
n insuran
nce system
m provid
ding statee compennsation fo
or severee
acciden
nts: The public
p
as a whole m ust be preepared to shoulder tthe burde n
Thhe Act on Compensati
C
ion for Nucclear Damaage presentlly in force provides th
hat electricc
power ccompanies bear de faccto unlimiteed compen sation liabiility, but thhe recent acccident hass
made itt clear thaat operatorss would bee hard preessed to prrovide full compensa tion if thee
governm
ment fails to assume liability. I f Japan rellies on nucclear energyy to supply
y a certainn
portion of its enerrgy needs, it
i will be nnecessary to
o change to
o a system uunder whicch the statee
compennsates for any
a
damagee which excceeds a cerrtain amoun
nt. In otherr words, th
he Japanesee
public aas a whole will bear th
he risk of ccoping with
h any accideents. A thorrough overrhaul of thee
nuclear energy buudget, whic h includes considerin
ng options such
s
as deccommission
ning of thee
“Monjuu” fast breeeder reacto
or, will be unavoidab
ble. The esstimates prresented in Section 1
constituute the pre mises for a new statte compenssation systeem, which is indispe nsable. Ass
shown in Figures 1 and 2, if a compeensation sy
ystem that anticipatess nuclear a ccidents iss
created,, and the expense b orne in thhe form off electricity
y rates, hiigher rates would bee
unavoiddable even if nuclear power plannts are retaained. If the cost is ppassed on in
n this way,
electric ity rates would
w
rise by 20% too 30%. Th
here is no indication of when use of thee
prototyppe fast breeeder reactorr “Monju” m
might be prractical. Even if it is ddecommissioned in thee
course of a thorouugh overhaaul of the nnuclear eneergy budget, and the savings alllocated forr
compennsation, thee full cost could sti ll not be met. Somee in the nnuclear industry havee
express ed a desiree to continu
ue using nu clear powe r plants in order to avvoid higherr electricityy
rates. H
However, addvocating continued
c
loong-term use
u of nucleear plants uunder condiitions priorr
to the F
Fukushima accident ( without anny safety measures
m
no
or a state ccompensatio
on system))
amount s to sayingg there is no
o need for contingenc y measuress or voluntaary insuran
nce becausee
operato rs would opperate plan ts carefullyy.
3. Rev iew green
nhouse gass reductio n target: Target wiill affect rreliance on nuclearr
power
Thhe governm
ment is mo ving towarrd eliminatting depend
dency on nnuclear pow
wer plants,
which w
will make itt difficult to
t achieve iits internatiionally pled
dged short--term targett of cuttingg
emissioons of greennhouse gasees such as C
CO 2 and meethane by 25%
2
versuss 1990 levells by 2020.
The govvernment needs
n
to draaft a reducttion plan in
n line with the extent to which nuclear
n
andd
renewabble energy are expectted to be u sed. After all, the value of nucllear plants will differr
dependiing on thee greenhousse gas redduction plan
n. In addittion to esttimates bassed on thee
bottom--up approacch adopted in Figures 1 and 2, wee have used economic models to estimate
e
byy
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http://www.jcer.or.jp/
Japan Center for Economic Research
Looking at Retaining Nuclear Power Plants
how much expenses for responding to the risk of an accident would have to rise, in order to
make abandoning nuclear energy dependency by 2050 a better option than maintaining it.
If Japan abandons nuclear energy gradually, insurance premiums providing against
future accidents will decline while expenses required to satisfy CO 2 constraints will increase.
If nuclear plants remain in operation on the other hand, insurance premiums will be necessary
in proportion to the total energy generated, but since nuclear generation does not emit CO 2 ,
the cost of measures to combat climate warming would be lower.
We have assumed (1) no construction of new nuclear plants, (2) decommissioning of
reactors after forty years in service, and (3) zero dependency on nuclear plants as an energy
source by 2050. We have also assumed that nuclear dependency will be 15% in 2030 and that
the greenhouse gas emission target will be to cut emissions 20% versus 1990 levels by 2030.
Table 1 How much ar e nuclear energy li ability insurance pr emiums more costs of
abandoning nuclear power
Estimation
Condition
Share of Renewable Energy
about Electricity in 2030
Nuclear energy liability insurance premiums
equal to Costs of switching to thermal
power plants and renewable energy
case
CO２ Cut Target(Comparison
between 1990 and 2030）
a
-20%
10%
120 trillion yen
b
-20%
30%
60 trillion yen
c
-6%
－
12 trillion yen
Source: Advisory Committee for Natural Resources and Energy (Estimation by JCER)
If the goal is to cut CO 2 emissions by 20% and the cost required to cope with nuclear
plant accidents over the next forty years exceeds ¥120 trillion, then the economically
advantageous choice would be to abandon nuclear energy by 2050 (Table 1 (a)). If we use
estimates worked out by the Cost Review Committee for the expense of providing against
nuclear accidents, then the cost of nuclear generation in this case would be equivalent to an
increase of about ¥12 per kWh. But with nuclear energy generation costs rising fast, we could
assume, given constraints on CO 2 emissions, that efforts to adopt renewable forms of energy
would naturally be promoted. Thus if enough renewable generation were brought online to
satisfy 30% of Japan’s energy needs by 2030, the cost of maintaining nuclear energy could
fall to ¥60 trillion (Table 1 (b). The cost which defines the borderline of economic viability
would fall because the renewable energy contribution would satisfy CO 2 constraints,
diminishing the advantages of nuclear energy.
4. Decide on p ermanent storage site fo r high-level radioactive waste by 2030:
Abandon nuclear energy otherwise
Whether spent nuclear fuel is reprocessed or buried directly underground without being
reprocessed, it is critical that a permanent storage site be found. If securing storage sites is
put off any further while the use of nuclear energy is continued, it would amount to the
present generation forcing future generations to pick up the tab for its own energy
consumption. Choosing a permanent disposal site will also be indispensable in order to clean
up the Fukushima accident and facilitate the decommissioning of reactors. If this choice
cannot be made by 2030, there will be no option but to decommission reactors as they reach
forty years in service and shut down all nuclear plants by 2050.
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Japan Center for Economic Research
Looking at Retaining Nuclear Power Plants
Based on reprocessing capacity and the volume of spent nuclear fuel being produced,
Figure 3 projects the outlook for the volume of spent nuclear fuel under three scenarios,
namely maintaining nuclear power plants, eliminating them by 2050, or reducing them by half
by 2030 and maintaining that level thereafter. (We assume that spent nuclear fuel will be
reprocessed.) If it is possible for reprocessing facilities to operate at full capacity for a period
of forty years to reprocess 800 tons of fuel, then reducing nuclear energy generation by half
would result in a gradual reduction in the volume of spent fuel. However, if the operating rate
falls from full capacity to just under 70% capacity (or from 800 tons to 540 tons), it would not
decline in the least.
Figure 3
The future outlook for the volume of spent nuclear fuel
30,000
(ton)
25,000
20,000
15,000
10,000
5,000
Maintaining nuclear power generation
Abandoning nnuclear power by 2050
Deceasing nuclear power plants by 2030 and maintaining it by 2050
(year)
0
2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050
Source: Japan Atomic Energy Commission (Estimation by JCER)
In view of the foregoing, failure to narrow down prospective final disposal sites by 2030
would make it necessary to abandon the option of permanently preserving nuclear plants and
to forsake nuclear energy by 2050. Nuclear energy advocates in the government and electric
power industry have been stating for twenty years that choosing a permanent disposal site
would take twenty years, but the situation has made absolutely no progress despite the lapse
of that twenty years. One suspects that no sense of urgency developed regarding the
disagreeable task of choosing a permanent disposal site because nuclear plants could remain
in operation so long as the spent fuel storage pools were not full and could still be used for
temporary storage. According to the existing decision-making framework, the central
government considers offers from local governments to host permanent disposal sites. But
another idea might be to switch to a system under which, as in Switzerland, a number of
potential scientifically safe sites within Japan are chosen, after which the government would
appeal to the public regarding the need for the facilities.
For example, the Basic Energy Plan now under consideration could contain a clear
statement to the effect that if no permanent disposal site is determined by 2030, then the
choice of abandoning nuclear energy would be made. This would force the nuclear power
industry to confront the problem of finding permanent disposal sites. Prime Minister
Yoshihiko Noda has expressed firm resolve with respect to raising the consumption tax,
saying that the issue must not be postponed. It is essential that he take the same stance
regarding selection of permanent storage sites.
The four conditions presented in our proposals assume the establishment of safety
inspection standards for nuclear plants by 2030, with the causes of the Fukushima Daiichi
plant clarified. If the causes are not clarified and the safety standards not established, there
would be no other option than to abandon nuclear energy. These proposals are intended to
complement the establishment of safety standards and constitute a very high hurdle for the
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Japan Ceenter for Econnomic Research
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Retaining Nucclear Power Plants
nuclear power ind ustry. How
wever, discloosure of traansparent in
nformation and open debate
d
willl
be indisspensable in
i clearing these fourr hurdles, and
a
above all, will bee the first step to thee
restorattion of conffidence in nuclear
n
pow
wer as a reliiable source of energyy.
Proposaals: Kazum
masa Iwata (JCER Pre sident) and
d Tatsuo Kobayashi (PPrincipal Economist).
E
Econom
mic analysiss: Katsuaki Ochiai (Seenior Econo
omist) and Yuta
Y
Tachi (Economis t).
Reeference Table
T
Foor inquirie s regarding
g this papper, please contact Tatsuo
T
Kobbayashi of the JCER
R
Econom
ment at t.koobayashi {aat mark} jccer.or.jp. ( * Please c hange { att
mic Researcch Departm
mark } to @ )
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ht
tp://www.jcer.or
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