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Japan's nuclear tech exports shift focus from plants to parts

Industry ministry changes tack with eye on decarbonization in Europe and beyond

Japan's Ohi nuclear power plant. Nuclear construction in Japan has come to a standstill since the 2011 Fukushima Daiichi disaster.   © Reuters

TOKYO -- Japan will start backing exports of nuclear power plant components under a new clean energy strategy, as cost and safety concerns derail new Japanese-built projects at home and overseas.

The plan represents a major shift for the Ministry of Economy, Trade and Industry, which traditionally had focused on boosting exports of entire nuclear power plants by Japanese builders like Mitsubishi Heavy Industries and Hitachi. But the cost of safety measures introduced following the 2011 Fukushima nuclear meltdown has derailed Japanese public-private projects in countries like Turkey.

Meanwhile, new construction in Japan has been at a standstill since the 2011 disaster, and sluggish demand in other advanced economies such as the U.S. and the U.K. have squeezed nuclear power supply chains. Japan's parts exports slumped to 21.4 billion yen in fiscal 2020 from 131.4 billion yen in fiscal 2010, according to data from the industry ministry and the Japan Atomic Industrial Forum.

To keep the country's nuclear power industry competitive amid such headwinds, METI will instead focus for the first time on comprehensive measures to help strong Japanese parts makers participate in more foreign nuclear power projects. 

It will consider matching parts producers to nuclear plant builders overseas. METI will look into helping them obtain necessary safety certifications in target markets, gather information on promising new projects, and secure maintenance services long-term.

The ministry aims to reflect the measures in budget requests for fiscal 2023.

South Korea launched similar efforts on nuclear power-related equipment in 2021, creating an online portal where companies could look up bidding information for overseas projects as well as technical strengths and performance of parts makers.

METI will use the South Korean approach as a reference as it irons out further details. Japan will also urge foreign governments to use Japanese components during other negotiations.

A government-backed framework would potentially collect information on overseas projects and standards more effectively than individual companies. METI already has a trove of data on policies and companies abroad, collected through international partnerships in nuclear power and past efforts to promote Japanese-built nuclear power plants.

A nuclear containment vessel built by Mitsubishi Heavy Industries. Many of Japan's nuclear plants use more than 90% domestic parts.

Japan is home to a robust industry for nuclear power components despite recent setbacks, with suppliers logging over 750 billion yen ($6.1 billion) in sales per year from roughly 10 million products. Many nuclear plants brought online in the 1970s or later are built with more than 90% domestic parts.

Some players are already expanding overseas. IHI has exported containment vessels for nuclear reactors to the U.S., and invested in NuScale Power, an American startup known for its small modular reactor technology. Ebara has exported cooling pumps to the U.S.

METI expects that by working with the private sector to build on its relationships with foreign nuclear reactor builders and authorities, it can unlock significant opportunities for Japanese parts makers.

The hope is that Japan can supply parts and materials for new nuclear projects overseas, such as containment vessels and valves for small nuclear reactors, and fuel rods for high-temperature gas reactors. The industry ministry sees potential business opportunities in parts replacement and maintenance as well.

Campaigns in the U.S. and Europe to cut carbon emissions are creating a more favorable environment for nuclear projects. France has been working toward new plants in the U.K. and Finland, and British Business Secretary Kwasi Kwarteng recently told local media that the country could build up to seven new nuclear power stations by 2050.

Plans are underway in the U.S., U.K. and France to test small modular reactors and other next-generation technology. The Nuclear Energy Institute, a U.S.-based industry association, predicts that the global nuclear power market could roughly quadruple between 2020 and 2050 to as much as $400 billion.

America and Britain are lacking in domestic parts suppliers, in part because new construction has slowed so much in recent years. China and Russia have gone further in building new capacity, but industrialized countries are likely to be even more reluctant to source parts from either country after Moscow's invasion of Ukraine.

"There's a lot of interest in the technology of Japanese companies," a senior Japanese industry ministry official said.

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