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Wednesday, Nov. 23, 2011

Noda weighs public's nuclear fears, firms' export ambitions

Government looks to cut atomic energy, land lucrative foreign deals


By CHICO HARLAN
The Washington Post

Long dependent on domestic appetite, Japan's nuclear technology companies are increasingly looking to overseas markets, hopeful that foreign governments still trust in the reliability and safety of their technologies after the Fukushima nuclear accident.

News photo
Do we still have a deal?: Prime Minister Yoshihiko Noda greets his Vietnamese counterpart, Nguyen Tan Dung, in Tokyo on Oct. 31. KYODO

Despite public criticism, Prime Minister Yoshihiko Noda has so far answered calls by conglomerates for support as they try to strike deals with countries including Vietnam, Jordan and Lithuania.

Last month, Noda met with Vietnamese Prime Minister Nguyen Tan Dung to reaffirm a $13 billion (¥1 trillion) deal in which Japanese companies will construct two plants for the energy-hungry nation. The government has offered low-interest loans to Hanoi over the purchase.

But the government finds itself in a difficult position as it tries to reduce Japan's reliance on atomic power while endorsing nuclear export efforts by domestic companies. A majority of Japanese believe nuclear power is no longer safe, but the government claims the nation's technologies remain the safest in the world — or they at least will be in the future, thanks to the lessons learned since the March 11 disasters wrecked the Fukushima No. 1 power station.

But the government's stance also reinforces the powerful role of industrial heavyweights — particularly Toshiba Corp., Hitachi Ltd. and Mitsubishi Heavy Industries Ltd. — whose technology could win contracts worth billions to the sputtering economy.

Though the government has yet to conclude its investigation into the triple meltdowns in Fukushima — a probe that will lead to new safety guidelines — industrial conglomerates are racing to finalize deals by highlighting the safety changes they've already made.

Only Toshiba and Hitachi had a hand in building the Fukushima plant's reactors, but the last eight months have served as a gauge for global confidence in Japanese technology for all three manufacturers. Hitachi executives say they have lost several deals since the start of the Fukushima crisis, while Toshiba and Tokyo Electric Power Co. pulled out of a joint bid for a contract in Turkey.

Still, the firms believe the setback will be modest, at best.

Before the Great East Japan Earthquake, Hitachi had outlined a plan to construct 38 overseas plants by 2030.

"We are now thinking that target might be a little bit delayed," said Masaharu Hanyu, who heads Hitachi's nuclear power systems, but he added the company has not formally lowered its target.

Japan's nuclear technologies firms have found that demand for atomic energy in many parts of the world has not decreased. While Germany decided to phase out its nuclear plants by 2022 and Italy recently voted against the construction of new nuclear reactors, countries in Asia and the Middle East still have plans for major nuclear projects. In China alone, 26 reactors are under construction.

"I really don't think Fukushima poses a threat to our negotiations," Hitachi's Hanyu said. "In terms of energy security and mitigating carbon emissions, there is still major demand."

Within weeks of the Fukushima crisis starting, Hitachi sent its executives around the globe to offer reassurances to governments over pending bids and deals. The company especially targeted Lithuania, where it had made a joint bid with U.S.-based General Electric Co. to build a new 1,300-megawatt facility — more powerful than the Fukushima No. 1 power station that was built in the 1960s, but on a par with modern standards. Vilnius closed its last Soviet-style nuclear reactor in 2009 and has since had to import most of its power.

In June, Hanyu and other Hitachi officials flew to Lithuania to tout the new safety measures devised since March 11, including changes in the backup power system. One month later, the Lithuanian government signed an agreement with Hitachi.

"The Lithuanian negotiations were really important to us," Hanyu said. "We wanted them to know that we are indeed learning from Fukushima No. 1. If they had been wary, they would not have picked us."

Domestically, the government hasn't decided whether it will cancel all plans for new nuclear power plants or merely curb its ambitions. Before the Fukushima disaster, the government had planned to build 14 new reactors by 2030, with nuclear power accounting for half of the country's electricity. But public sentiment has turned against nuclear power and former Prime Minister Naoto Kan announced he favored a phasing out of nuclear reactors. Kan also showed little support for efforts to export nuclear technologies.

Noda's support for nuclear exports stems, in part, from his desire to maintain influence, as nuclear nations have more clout in global nonproliferation talks. Heavy exports also give industrial companies a reason to keep investing in research and development to maintain their technology, rather than allowing it to become outdated.

"We have to keep up by devising modern blueprints for nuclear plants," said Shigero Masamori, MHI's general manager of nuclear energy systems.



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