Bloomberg News

Japan Says Nuclear Power Cost May Be 50% Higher Than Estimated

December 20, 2011

Dec. 19 (Bloomberg) -- Nuclear power generation in Japan is about 50 percent more expensive than estimated after factoring in the cost of paying for an accident like the Fukushima disaster, a government panel said.

Nuclear energy costs at least 8.9 yen (11 cents) per kilowatt hour, compared with a government estimate of 5.9 yen in 2004, the panel said in a draft report today. Coal is estimated to cost 9.5 yen per kilowatt hour, while liquefied natural gas and oil cost 10.7 yen and 36 yen respectively.

Japan’s government is reviewing its energy policy after the disaster at Tokyo Electric Power Co.’s Fukushima Dai-Ichi atomic station. The government will use the panel’s findings to draw up a new energy policy that may call for reducing reliance on nuclear power.

The committee estimated a catastrophe like Fukushima would cost a minimum of about 6 trillion yen ($77 billion), the report said. Each 1 trillion yen increase raises the cost of generation by 0.1 yen per kilowatt hour, it said. The panel is headed by Katsuyuki Ishida, a senior vice-minister in the Cabinet Office.

By 2030, the cost of coal, LNG and oil power generation are estimated to rise to 10.3 yen, 10.9 yen and 38.9 yen per kilowatt hour because of carbon emission costs and rising fuel prices, the report said.

Wind power from turbines on land may fall to as low as 8.8 yen an hour by 2030 from 9.9 yen in 2010 as technological innovations make it cheaper, the panel said. Residential solar power generation is forecast to be 9.9 yen by 2030 from 33.4 yen last year.

--Editors: Aaron Sheldrick, Baldave Singh

To contact the reporter on this story: Tsuyoshi Inajima in Tokyo at tinajima@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net


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