News Watch
Itochu Withdraws from Turkish NPP Project
The trading house Itochu was to have a greater than 10 percent stake in a company (not yet established), it was said, that would run the Sinop Nuclear Power Plant (NPP) project, Turkey’s second NPP project, but Itochu announced that it would be withdrawing from the project at the end of March. It had been participating in a feasibility study as a precondition for commercialization, but that study was still incomplete at the end of March, when it was supposed to have been wrapped up, and Itochu declined a request to extend its contract.
Mitsubishi Heavy Industries was to take leadership of the consortium including Itochu and Engie (formerly GDF Suez) of France with a combined 51% stake in the operating company. A new Turkish company (Turkish Electricity Generation Corporation) would provide the remaining 49% of funding, but that deal has fallen apart. It is said that risks were becoming apparent with the build-own-operate (BOO) model, in which the operating company was to build and own four 1100 MW ATMEA 1 reactors and recover costs by operating the reactors and selling the electric power.
According to the May 3 edition of Tokyo Shimbun, Chairman Masahiro Okafuji of Itochu said on May 2 that the Turkish government kept making demands and was having financial difficulties, indicating the possibility that Turkey’s cash position was worsening and its plans would bog down. In a speech at the Japan Atomic Industrial Forum’s annual conference on May 10, Mitsubishi Heavy Industries’ executive officer in charge of the project expressed concern about fundraising difficulties.
Originally estimated at 2 trillion yen, the construction costs are said to have swollen to over 4 trillion or even 5 trillion yen, with uncertainties about how far responsibilities extend with respect to both setting matters straight and how to defray the costs. It would be fair to say that there is no guarantee whatsoever of the project earning a profit. Moreover, as this is not simply an export of equipment, responsibility will be taken under the BOO model, meaning that none of the participants will be exempt from nuclear damage compensation and all would be obligated to pay reparations. The risks are both enormous and unlimited.
At the Akkuyu NPP, Turkey’s first nuclear project, which has set a precedent with the BOO model, construction of the first 1200 MW VVER4 reactor got fully underway on April 3. Even here, three Turkish companies that were to provide 49% of the funding for the Akkuyu Project Company established by Rosatom have decided to abandon it.
The trading house Itochu was to have a greater than 10 percent stake in a company (not yet established), it was said, that would run the Sinop Nuclear Power Plant (NPP) project, Turkey’s second NPP project, but Itochu announced that it would be withdrawing from the project at the end of March. It had been participating in a feasibility study as a precondition for commercialization, but that study was still incomplete at the end of March, when it was supposed to have been wrapped up, and Itochu declined a request to extend its contract.
Mitsubishi Heavy Industries was to take leadership of the consortium including Itochu and Engie (formerly GDF Suez) of France with a combined 51% stake in the operating company. A new Turkish company (Turkish Electricity Generation Corporation) would provide the remaining 49% of funding, but that deal has fallen apart. It is said that risks were becoming apparent with the build-own-operate (BOO) model, in which the operating company was to build and own four 1100 MW ATMEA 1 reactors and recover costs by operating the reactors and selling the electric power.
According to the May 3 edition of Tokyo Shimbun, Chairman Masahiro Okafuji of Itochu said on May 2 that the Turkish government kept making demands and was having financial difficulties, indicating the possibility that Turkey’s cash position was worsening and its plans would bog down. In a speech at the Japan Atomic Industrial Forum’s annual conference on May 10, Mitsubishi Heavy Industries’ executive officer in charge of the project expressed concern about fundraising difficulties.
Originally estimated at 2 trillion yen, the construction costs are said to have swollen to over 4 trillion or even 5 trillion yen, with uncertainties about how far responsibilities extend with respect to both setting matters straight and how to defray the costs. It would be fair to say that there is no guarantee whatsoever of the project earning a profit. Moreover, as this is not simply an export of equipment, responsibility will be taken under the BOO model, meaning that none of the participants will be exempt from nuclear damage compensation and all would be obligated to pay reparations. The risks are both enormous and unlimited.
At the Akkuyu NPP, Turkey’s first nuclear project, which has set a precedent with the BOO model, construction of the first 1200 MW VVER4 reactor got fully underway on April 3. Even here, three Turkish companies that were to provide 49% of the funding for the Akkuyu Project Company established by Rosatom have decided to abandon it.
UK NPP Project Even More Uncertain
Plans for the Wylfa-Newydd Nuclear Power Station in Wales (see News Watch No.182), comprehensively supported by the Japanese government and advanced by Hitachi, Ltd., are facing dire straits. The UK is anticipated to agree to provide 2 trillion yen in financing toward the 3 trillion yen total cost of the project as requested by Hitachi in its talks with the UK government, but even if an agreement is reached, the outlook is uncertain.
Plans for the Wylfa-Newydd Nuclear Power Station in Wales (see News Watch No.182), comprehensively supported by the Japanese government and advanced by Hitachi, Ltd., are facing dire straits. The UK is anticipated to agree to provide 2 trillion yen in financing toward the 3 trillion yen total cost of the project as requested by Hitachi in its talks with the UK government, but even if an agreement is reached, the outlook is uncertain.
Restart of Tokai Daini NPS Facing Big Hurdles
The Local Heads of Government Colloquium on the Siting of Nuclear Power Facilities, comprising Mito, Hitachi and three other cities in Ibaraki Prefecture, along with Tokai Village, where the Japan Atomic Power Co. (JAPC) sited the Tokai Daini NPS, convened on March 29 and signed a new “Agreement on Ensuring Safety and Protecting the Environment around Nuclear Power Plants” with the JAPC.
The five cities, along with Tokai Village and Ibaraki Prefecture, have a previously existing agreement with the JAPC, but Tokai Village and the prefecture have a prior understanding on construction of new facilities. They also possess the authority to request safety measures, including suspension of operation at facilities, and on-site investigations that the five cities lack. The colloquium was founded in February 2012, and has since then been requesting reconsideration of the safety agreement, seeking the same authority for the five cities as Tokai Village. This time, rather than revising the previous agreement, they concluded a separate, new specialized agreement on NPP restarts and operations exceeding 40 years.
The new agreement constitutes a “mechanism for effectively gaining prior understanding from the colloquium” through clear explanations from the JAPC, exchanges of views with the colloquium, and discussions for consensus-forming.
Responding to a reporter’s question on reconciling differences of opinion within the colloquium, Mayor Osamu Yamada of Tokai Village, who chairs the colloquium, said “Majority decisions don’t lead to acquiescence, so we aim to build consensuses among our five cities and the village.”
The Local Heads of Government Colloquium on the Siting of Nuclear Power Facilities, comprising Mito, Hitachi and three other cities in Ibaraki Prefecture, along with Tokai Village, where the Japan Atomic Power Co. (JAPC) sited the Tokai Daini NPS, convened on March 29 and signed a new “Agreement on Ensuring Safety and Protecting the Environment around Nuclear Power Plants” with the JAPC.
The five cities, along with Tokai Village and Ibaraki Prefecture, have a previously existing agreement with the JAPC, but Tokai Village and the prefecture have a prior understanding on construction of new facilities. They also possess the authority to request safety measures, including suspension of operation at facilities, and on-site investigations that the five cities lack. The colloquium was founded in February 2012, and has since then been requesting reconsideration of the safety agreement, seeking the same authority for the five cities as Tokai Village. This time, rather than revising the previous agreement, they concluded a separate, new specialized agreement on NPP restarts and operations exceeding 40 years.
The new agreement constitutes a “mechanism for effectively gaining prior understanding from the colloquium” through clear explanations from the JAPC, exchanges of views with the colloquium, and discussions for consensus-forming.
Responding to a reporter’s question on reconciling differences of opinion within the colloquium, Mayor Osamu Yamada of Tokai Village, who chairs the colloquium, said “Majority decisions don’t lead to acquiescence, so we aim to build consensuses among our five cities and the village.”
