Archives de mai 2012

Japan, nuclear-free after more than 40 years

Japan has entered a new era after Hokkaido Electric Power closed the last operating nuclear reactor in the country. It is the first time Japan has no working nuclear power-source since 1970.

Before last year’s natural disasters that triggered a catastrophe at the Fukushima plant, Japan generated nearly a third of its power needs from nuclear sources, with more than 30 operating plants.

Japanese utilities are lobbying the authorities and the public to accept the restart of nuclear reactors, saying that the country is otherwise facing risks for blackouts during the summer. The public is however generally opposing the restart of nuclear reactors.

The government is considering various measures to reduce the risks for power black-outs in the peak-demand summer season. One of them is that rates during peak-hours could be increased.

The last time Japan operated without nuclear power was in the spring of 1970, about four years after nuclear energy generation began in the country. Japan had only two nuclear reactors at that time.



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Japan’s Nuclear Power Plants Go Dark: Today’s Pic

Japan's Nuclear Plants Go Dark

Hokkaido Electric Power Co.’s Tomari nuclear power plant stands at night in Tomari Village, Hokkaido, Japan, on May 5, 2012. Japan will have no nuclear-generated electricity for the first time in more than four decades tonight after its sole operating power reactor is halted for scheduled maintenance. Photographer: Tomohiro Ohsumi/Bloomberg

By Bloomberg May 10, 2012 4:52 PM GMT+0200
Electric Power Co.’s Tomari nuclear power plant in Tomari Village, Hokkaido, Japan, on May 5. Japan had no nuclear-generated electricity for the first time in more than four decades after Tomari, its sole operating power reactor, was halted for scheduled maintenance.

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Japan Is Now Running on 0% Nuclear Power. That Means Using More Fossil Fuels.


The Fukushima Daiichi power plant in 1975, seen from above.

As of this weekend, when Tomari Nuclear Power Plant was shutdown for maintenance, every last one of Japan’s 54 nuclear plants have Japan has been taken offline. Although the shutdowns are supposed to be temporary, after the power utilities’ mismanagement of the Fukushima disaster last year, the Japanese public has registered increasing distrust for official reassurances that nuclear power can be safe. These shutdowns could conceivably become permanent.

The world’s major economies all use nuclear power to some extent, and Japan, which got about 30% of its power from reactors, was one of the heavier users before the the Fukushima meltdown. Now, public opinion there and the world over has soured toward nuclear power, to the extent that Germany has officially announced plans to abandon nuclear completely by 2022.

As Bryan Walsh at TIME Science points out, though, this backlash against one of the few high-output energy sources that does not involve fossil fuels comes with a price.

Japan’s business community and its government have warned that the country could face serious energy shortages this summer without nuclear power, which could dent the world’s third largest economy as it struggles to bounce back from the tsunami. Without nuclear power, Japan is projected to produce an additional 180 million to 210 million tons of carbon emissions this fiscal year compared with 1990, wiping out much of the improvements the country made over the past few years as it worked to meet its carbon-cutting commitments under the Kyoto Protocol.

Read more at TIME.

Image courtesy of National Land Image Information (Color Aerial Photographs), Ministry of Land, Infrastructure, Transport and Tourism

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Japan to provide $12.6 billion to Tepco, operator of tsunami-ravaged nuclear plant

Japan to provide $12.6 billion to Tepco, operator of tsunami-ravaged nuclear plant


By , Published: May 9

TOKYO — Japan’s government on Wednesday approved a 1 trillion-yen, or $12.6 billion, bailout for the operator of the disaster-stricken Fukushima nuclear plant, putting the giant utility under temporary state control as it continues to deal with the extensive damage at the facility.

The move, which had been widely expected, will prevent the Tokyo Electric Power Co., known as Tepco, from collapsing. With the newly authorized public funds, the company can decommission the stricken reactors at the plant on Japan’s northeastern coast, pay compensation to the tens of thousands of people who fled as radiation spread and provide electricity to its 45 million customers.


One year after the nuclear accident at the Fukushima Daiichi nuclear plant sent local inhabitants fleeing for their safety, little has changed in the deserted town of Tomioka, which now has a population of one.

The bailout also gives the government a majority share of the former monopoly, a change that will formally take place after Tepco’s annual shareholders meeting next month, according to the Kyodo news agency. Tepco will be forced to follow a restructuring plan that includes electricity rate increases, management changes and $41.4 billion in cost-cutting measures over the next decade.

“Without the state funds, [Tepco] cannot provide a stable supply of electricity and pay for compensation and decommissioning costs,” said Industry Minister Yukio Edano, who approved the takeover plan.

Tepco fell into financial crisis last year after a triple meltdown at the Fukushima Daiichi plant, where primary and backup cooling systems were knocked out by the 9.0-magnitude earthquake and ensuing tsunamiof March 11, 2011. The company, much-criticized for its safety oversights at the plant, will need decades to decommission the now-stabilized reactors, as well as trillions of yen for cleanup.

The government, policy experts say, could use its control of Tepco to spearhead changes in Japan’s traditional system of electricity distribution, long dominated by regional monopolies whose charges are among the world’s highest. The government could open the electricity grid to competitors, a step Edano has advocated. The industry minister had also threatened to allow Tepco to fail if it did not agree to a management overhaul.

Tepco has selected a new government-approved chairman, Kazuhiko Shimokobe, a bankruptcy lawyer and corporate restructuring specialist. Shimokobe recently oversaw the Nuclear Damage Liability Facilitation Fund, a public body created to help Tepco pay compensation to nuclear evacuees.

Tepco remains the sole provider of electricity for a large swath of eastern Japan, including Tokyo. The utility, according to its government-submitted recovery plan, wants to restart seven idled reactors at its Kashiwazaki Kariwa nuclear plant, on Japan’s western coast.

In the aftermath of the March 11 disaster, however, the Japanese public — along with many local officials — has come out strongly against nuclear power. That opposition has quickly turned Japan into an essentially non-nuclear nation. Mandatory, every-13-month checkups for reactors have turned into open-ended shutdowns as the central government finds itself unable to win local approval for the restarts. This past weekend, Japan took its last operating reactor offline, completely removing nuclear power from the grid for the first time in more than four decades.

In addition to the seven-unit Kashiwazaki Kariwa plant in western Japan and the six-unit Fukushima Daiichi facility, Tepco also operates the four-unit Fukushima Daini plant, which was shut down immediately after the disaster.


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Japan nuclear restart key to uranium price recovery


he Energy Report: Fourteen months after the fact, the biggest story in uranium is still the tsunami that struck Japan and destroyed four nuclear reactors at the Fukushima Daiichi nuclear power station. Japan is attempting to eradicate its dependency on nuclear energy. Are any plants still operating? Will all reactors be shut down in the near future?

Rob Chang: My numbers indicate that there are 50 reactors in Japan in total with only one still operating, and that last one is scheduled for a regular maintenance shutdown in early May. Since the Fukushima disaster occurred, every reactor that has been turned off for routine maintenance has not been permitted to restart. By mid-May, Japan will no longer run on nuclear power at all.

TER: There is a huge rise in carbon emissions in Japan, where fuel oil consumption for power production has doubled. Are drastically increased emissions likely to affect policy decisions in Japan, Germany or elsewhere?

RC: The carbon emissions are certainly growing. For Japan and Germany, an incredible rise is expected. There was an estimate that over the next few years, the increase in CO2 for Germany alone will be between 170-400 million tons (Mt) of additional CO2, which completely contradicts the country’s previous goals. The populations and governments of these two countries are currently putting carbon emission concerns behind their fears of nuclear power. Germany is aggressively following its anti-nuclear power path while moving toward renewables and using other sources of power, such as natural gas, which unfortunately does generate a lot of CO2. Whether the country decides to go back to its original commitment of reducing CO2 emissions or to stay the path of avoiding nuclear at all costs will certainly be an issue, considering that alternative energy sources can’t yet meet their energy demands.

TER: It sounds like there could be some very interesting alternative plays emerging from Germany and Japan’s planned energy shifts, as both countries have large economic bases.

RC: That’s the goal for both countries, to move toward alternative energy, which includes solar, wind power, hydro and geothermal. The problem with that is none of these can really provide a consistent form of baseload power. With solar, if you get a sustained period of darkness, you’re going to have problems. You could also have a lack of wind, or a lack of suitable locations to build dams to generate hydro-electric power. As for geothermal, Japan has some capacity, but studies show that it’s not enough to fully replace nuclear.

TER: What are the predominant, global sources of baseload energy?

RC: Baseload sources of power, those that are available at all times, include natural gas, coal and nuclear. Of the three, only one is zero-carbon emitting after being built, and that would be nuclear power. That’s the big argument in favor of nuclear power. It is pretty much the only source of baseload power that solves all of the problems in terms of carbon emissions, low-cost power production and being relatively safe outside of the potential of nuclear meltdowns. Even when we look at Fukushima, it’s really more about fear than reality. Nuclear power is still quite safe.

TER: Rob, you said nuclear is low-cost compared to other forms of energy. Tell me more.

RC: The costs of operating a nuclear power plant after it’s already been built are probably the lowest among all energy sources. If you look at it in terms of alternative energy, which are heavily government-subsidized forms of power, it’s actually very expensive to run those projects. On top of that, you still have the additional not-in-my-backyard problems for wind farms, which many people dislike. Although alternative forms of energy sound like a great option, nuclear power makes a lot more sense.

TER: Looking at a chart, uranium seems to have some support at about $50/pound (lb), and it seems to be in a trading range now with resistance at around $55/lb. That looks like a consolidation pattern to me.

RC: I’m more of a fundamentals analyst than a technical analyst, but I do observe the same patterns that you’re seeing. It seems like it’s trading in that range primarily because of near-term supply and demand fundamentals. Two, three or five years from now, if mine production schedules go the way they’re supposed to, we should be in balance, with maybe even a slight surplus.

TER: Where is new supply coming from?

RC: There are three primary mines that are coming online that are expected to meet upcoming demand. Together, these make up the bulk of the upcoming supply that’s theoretically supposed to balance the increase in demand. That’s assuming the World Nuclear Association’s best-case scenario, as presented last year, unfolds. Demand may be lower or higher, but it does take into account the shutdowns in Japan and Germany.

TER: Does this consolidation pattern have anything to do with the acquisitions we’ve been seeing in the industry?

RC: I can’t really say it is definitely a consolidation pattern. But when you are seeing consolidation in the industry, you generally see it in the low parts of the market when larger firms can see value in other firms and believe that their prices are going to go up and markets are going to be better. They might as well buy now when it’s cheap and get bigger. We are certainly seeing that now, and we have been seeing that for the last two years. In my opinion, we’re going to see more of it going forward.

These represent a lot of very positive signs for the industry because usually when you see consolidation, it signals the bottom in most industries.

TER: What about uranium price? Will it remain weak, as it is now at $50-55/lb.?

RC: It could, unless we have a catalyst. Right now, it seems like a very comfortable range for uranium. The main catalysts that many are waiting for is Japan’s possible decision to restart its nuclear reactors. Once that happens, I would bet that we would see a run-up in the spot price. How far up it goes will be tough to say. It will entirely depend on how aggressive the nuclear roll-out or re-ignition occurs in Japan. For most of us, we believe that it’s not a matter of if, but when the reactors are restarted. The government has already decided that it needs to. It’s more a matter of getting the locals and the mayors in the areas to sign off on it. But once that happens, we should see the price go up.

TER: What is your price forecast?

RC: I believe uranium prices will rise a little bit, from here at least. For 2012, we’re expecting an average price of $55/lb.

TER: If it rose above $55/lb, would that create a secular bull trend in uranium equities?

RC: I believe so. The uranium equities have been moving higher over the last six to eight months, primarily based on the fundamentals despite the fact that the uranium price hasn’t moved. I fully recognize that they’ve come off highs from January and February, but overall they’re still up relative to the Fukushima event. I believe that as the uranium spot price moves higher, there will certainly be more interest in the uranium equities.

TER: Many thanks to you, Rob.

RC: I’ve enjoyed it. Thank you for having me back.

Versant Partners Analyst Rob Chang has extensive financial markets experience dating back to 1995. He helped run a multistrategy hedge fund, worked in base metals research at BMO Capital Markets, managed resource funds at a boutique investment management firm and was a global mining equity analyst at an independent investment bank.


Article published courtesy of The Energy Report –

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