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Tuesday, May 10, 2011

Our choice: profits or safety


As a scholar whose specialty includes energy economics and the environment, I am somewhat puzzled by the relatively small number of social scientists who look into problems concerning energy. Is it because they are afraid of clarifying whether they should be for or against nuclear power generation?

There are two reasons why it is inconceivable for a utilities company to construct a new nuclear power station or expand an existing one at a time when the government, in its pursuit of a policy to "liberalize" electricity supplies, is ordering members of the power industry to follow business principles and become "ordinary private corporations."

First of all, a nuclear power station requires huge initial investments. In addition to the high construction costs, a power company must spend more than 10 years getting the consent of local residents and agreeing to terms of compensation for fishermen and others who will be adversely affected if a nuclear plant is built. Under three laws governing the development of electric power sources, the government pays subsidies to municipalities surrounding a nuclear plant site. Indeed, about ¥13 billion has been paid out to the municipalities in Fukushima Prefecture, where the Fukushima No. 1 and No. 2 nuclear power stations are located.

Second, it is presumably all but impossible to build a nuclear power station in a densely populated area — where most of the electricity demanded is consumed — because of the "not in my backyard" sentiments of local citizens. This is what prompted Tokyo Electric Power Co. (Tepco) to build plants in Fukushima and Niigata prefectures and to plan another in Aomori Prefecture — all outside the regions where Tepco is authorized to supply electricity.

A general tendency up to the end of the 20th century was that municipalities in coastal areas, which were not affluent, gladly accepted plans to locate nuclear power plants in their area in exchange for government incentives, including subsidies and more fixed property tax revenue.

In August 1996, however, residents of the town of Maki, Niigata Prefecture, voted overwhelmingly in a referendum against allowing a nuclear plant to locate near the town. Thus began the age in Japan when power companies could expect enormous difficulty finding a place for such a plant. A similar result followed in November 2001 in the Mie Prefecture town of Miyama. Another referendum scheduled for Kushima, Miyazaki Prefecture, on April 10 was postponed indefinitely after the accidents at Fukushima.

Under these circumstances, it appears next to impossible for a utility company, which is supposed to be an "ordinary private corporation," to undertake construction or expansion of a nuclear power station in the future.

The government has taken note of these developments and started taking measures aimed at achieving more efficient operations at existing plants. One such measure is to extend the life of a nuclear power plant beyond the 40 years anticipated at design. Indeed, the No. 1 reactor at the stricken Fukushima No. 1 plant was cleared to operate for an additional 20 years after the original 40 years expired. Also, the government has tried to shorten the time required for an annual check of a nuclear power plant. The check typically takes 30 to 100 days.

In other words, both the private and public sectors have endeavored to ensure improved efficiency at existing plants. Why, then, have power companies so far continued to build nuclear power stations? The answer is simple: The government has granted each of them the privilege of monopolizing the delivery of power within a designated region. In exchange for this privilege, the companies have had no choice but to accede to the government's policy of making nuclear power the core of the energy supply, as adopted by the government after the first oil crisis of 1973.

Meanwhile, electric power companies, operating as private enterprises, do not see an incentive to construct or expand nuclear power stations with a capacity exceeding 1 million kilowatts when there is scant prospect of a sharp increase in power usage over the next 10 to 20 years. Three factors have contributed to this outlook: (1) the graying of the nation's population and the low birthrate; (2) the shift in Japan's industrial structure from production of steel and other materials, which require large amounts of electricity, to processing and assembly of electronic appliances, automobiles and other consumer items; and (3) the increasing energy efficiency of electronic appliances and other products.

The impact of this situation is reflected at the Department of Nuclear Engineering at the University of Tokyo, where the number of students has declined so much that the department merged with another. This phenomenon casts dark clouds over the training of the next generation of nuclear engineers in Japan.

I have long argued that we must thoroughly evaluate the assertion of pro-nuclear forces that the need for nuclear power generation in the next two to three decades is irrefutable because (1) finite energy sources like petroleum and natural gas can be tapped for only 40 to 50 more years; (2) there is a limit to the energy that renewable sources can supply; and (3) CO₂ emissions must be reduced.

If this assertion proves true, then, for the purpose of "maintaining" the technologies related to nuclear power generation, a new state-owned company should have been created for building and expanding nuclear stations and serving as the "wholesaler" of electricity to the existing nine regional utilities (except Okinawa Electric Power Co.)

Nuclear power station safety can be assured only if concerns about how to reduce costs and increase efficiency, as pursued by private power companies, take a backseat. The liberalization of electric power supplies is being pursued on the assumption that the efficient management of utilities companies is impossible as long as they are given the privilege of a regional monopoly. This liberalization in turn has forced the power companies to work toward maximizing profits as private enterprises.

I've long argued that ensuring safety is not compatible with the corporate pursuit of profits. Regretfully, this argument has been verified by the accident at the Fukushima No. 1 nuclear power plant.

Takamitsu Sawa is president of Shiga University, Japan.


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