Option of Collecting Cost for Building New Nuclear Plants

The government of Japan considers adding cost of new construction of nuclear power plants on the electric bill of users. Building new nuclear power plant or increasing reactor in existing plant was strictly ruled out after the severe accident in Fukushima Daiichi Nuclear Power Plant. However, the rule have been reconsidered with demand of power sources with less carbon emission or to deal with rise of energy price caused by the war in Ukraine. Without presenting complete solution on economic and social cost of nuclear power generation, Ministry of Economy, Trade and Industry (METI) and power companies promote nuclear policy at the expense of users. 

According to a report of Asahi Shimbun, METI is considering the new system of utility charge, because security cost of nuclear power plant has been increased after new regulation was introduced with the accident in Fukushima, and because the power companies cannot invest for new nuclear power plant with no hope for recovering the building cost. METI has no idea of independence from nuclear power.

 

New system would be based on “regulated asset based model” of the United Kingdom. Retailers of electricity would pay for the cost for building and maintenance of nuclear power plant from the beginning of construction. The retailers can recover the cost from their customers by adding it on utility bill. Being conscious of reducing greenhouse gas emission, the UK is willing to support for building new nuclear power plant.

 

Japan is more skeptical about reliability on nuclear power generation. The severe accident in Fukushima in 2011 caused huge number of displaced people, unprecedented process for decommission of crippled nuclear power plant and additional cost for nuclear security. Discharging water from the Fukushima plant, even though it is processed through a system for removing radioactive materials, invited concern or opposition of neighbor countries, making it a diplomatic problem.

 

Adding cost for building nuclear power plant is nothing but reintroduction of rate-of-return regulation, which had been the basis of nuclear power industries in pre-Fukushima era. Deregulation of electric power industry in 2016 made users possible to select power company and accelerated competition between retailers over utility cost. The major power companies could not afford to save their resource for future building of power plants including nuclear.

 

Power retailers can add its full cost on electricity bill under the system of rate-of-return regulation. Renewable energy will shrink losing its competitiveness against other power resource. Coal power is not sustainable in the international argument over climate change. As a result, only nuclear power will survive in the selection of future source of electricity in Japan.