June 9 (Bloomberg) -- Power cuts will hit Kansai, Japan’s second-largest industrial region, as early as this month as restarts of nuclear plants may be delayed, impeding the nation’s recovery from a record earthquake and atomic disaster.
A delay in starting reactors shut for regular maintenance could mean Kansai Electric Power Co.’s clients will be asked to cut power use by 10 percent this summer, Fukui Governor Issei Nishikawa said in an interview. The Kansai region, home to Panasonic Corp. and Nintendo Co., sources about 55 percent of its energy from atomic plants in Fukui, north of Osaka.
Since the March 11 earthquake and tsunami crippled the Fukushima Dai-Ichi nuclear station and caused the biggest radiation fallout in 25 years, approvals to restart reactors have been delayed as prefectures agreed to wait for national guidelines. Mandatory maintenance every 13 months would also mean that just 14 of the nation’s 54 nuclear reactors may be operating in August, according to Bloomberg calculations.
The approval process “will take some time,” Nishikawa said in an interview at his office inside Fukui castle grounds on June 3. “When you’re along the highway and there’s rain and fog, it’s best to wait it out in a service area.”
That timeframe is likely to be more than one year, said Shinobu Tokioka, mayor of Ohi town in Fukui. The town houses a four-reactor plant owned by Kansai Electric with one unit idled for maintenance. Ohi’s nuclear plant supplies most of the power to Osaka, Japan’s third-biggest city, he said.
Kansai Electric today postponed a sale of 10-year bonds scheduled this month, according to an e-mailed statement from Nomura Securities Co. The utility’s shares traded on the Tokyo Stock Exchange dropped 1.8 percent to 1,196 yen, the lowest level in 27 years, extending to 44 percent their plunge since the March natural disasters.
Tokyo Electric Power Co., fell 4 percent to 192 yen, taking its drop to 91 percent since March 10, the day before the tsunami crippled its Fukushima Dai-Ichi nuclear station.
As of June 3, 19 reactors with a capacity of 17,580 megawatts were online nationwide. Kansai, the most nuclear energy-reliant region, accounts for a fifth of Japan’s economy.
Heavy snow in December 2005 caused a rupture of the power cable to the Ohi nuclear station and led to blackouts in four cities in Kansai. One of four reactors at the Ohi plant, which supplies most of Osaka’s power at present, is idled for maintenance.
“We’d be in trouble if the plant was scrapped,” Ohi’s Tokioka said, referring the subsidies the town earns from the nuclear plants. “Even if we bear that trouble, it won’t help the country. There won’t be enough power.”
Should western Japan join the country’s east in suffering power cuts, due to delayed nuclear plant restarts, national industrial output will likely fall 8.4 percent by August next year, SMBC Nikko Securities Inc. said in a report yesterday.
The Ministry of Economy, Trade and Industry, otherwise known as METI, has the legal authority to let nuclear utilities restart reactors after maintenance, according to Penn Bowers, a utility analyst with CLSA Asia-Pacific Markets in Tokyo. Typically, prefectural governments and cities closest to the plant also have a say in the approval process.
Governors of the 14 prefectures with nuclear power plants sent a letter on May 31 to the Trade Ministry asking for new safety guidelines, according to a copy of the letter obtained by Bloomberg. The governors agreed to hold off approving the restarts of reactors, Nishikawa said.
Some cities have decided to agree to restart without the national guidelines. Genkai town in Saga prefecture in Kyushu, southern Japan, said it will allow operations to resume at its nearby nuclear plant in early July, Kyodo News reported this week. Yasushi Furukawa, Saga’s governor, said he won’t approve the proposal until the introduction of the new guidelines, Kyodo said last week.
After Tokyo Electric’s Fukushima Dai-Ichi plant lost external power and control over its cooling systems in March, utilities in eastern Japan scrambled to find coal and natural gas for thermal power plants, Bowers said. Those in the Kansai and Kyushu regions didn’t follow suit as they expected their nuclear generators to resume after routine maintenance, he said.
The day after Prime Minister Naoto Kan asked Chubu Electric Power Co. on May 6 to idle its Hamaoka nuclear power plant to address safety concerns, the utility’s chairman, Toshio Mita, flew to Qatar to hold talks on additional gas supplies. On May 9 Chubu Electric said it would shut the plant.
Hamaoka and the two Fukushima nuclear plants, the Dai-Ichi and the Dai-Ni, have a total of 13 reactors.
The new guidelines will need to take into account an investigation into what caused Fukushima Dai-Ichi to fail. The plant in Japan’s northeast was crippled by at least three hydrogen explosions and has since leaked as much radiation into the soil as was found around Chernobyl, site of the 1986 nuclear catastrophe, according to a state-backed report.
The government set up a 10-person committee this week to investigate the March accident and look into an overhaul of the way the industry runs and is monitored. An interim report from the committee, which plans to interview Tokyo Electric and top government officials, is expected in December and a final report by next summer, the Nikkei newspaper reported on June 7, citing a draft agenda.
Work on Measures
The Nuclear and Industry Safety Agency, an affiliate of METI, asked 11 nuclear power plant operators, including Kansai Electric, to work on measures to avoid severe accidents on June 7, according to the statement posted on its website. This requirement includes countermeasures to prevent hydrogen explosions and the reinforcement of fuel tanks against earthquakes.
“I don’t see any problems with a plant’s operation and the restart of idled plants if these measures are implemented,” Trade Minister Banri Kaieda told reporters on June 7.
Kansai Electric, which operates 11 reactors at three stations in Fukui prefecture, doesn’t have a clear schedule to complete the safety enhancements, spokesman Akihiro Aoike said by telephone from Osaka. Currently, five of the reactors are idled for maintenance. Three of those were due to resume operations in April.
“We will seek approvals from local authorities in Fukui after works required by the agency are done at each plant,” Aoike said. “We may have to request energy-saving efforts during summer,” he said, adding that details aren’t available yet.
For the greater Tokyo region, the government ordered industrial power users in areas covered by Tokyo Electric and Tohoku Electric Power Co. to cut electricity consumption by 15 percent starting July 1 to help cope with shortages.
--With assistance from Stuart Biggs in Tokyo. Editors: Teo Chian Wei, Amit Prakash
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