OSAKA -- Kansai Electric Power Co. has decided to close two large, aging nuclear reactors at a power plant in Fukui Prefecture in light of rising safety costs that make restarting such facilities financially untenable.
The Oi plant's Nos. 1 and 2 reactors each have an output capacity of 1.18 million kW, making them Japan's largest to be decommissioned aside from Tokyo Electric Power Co. Holding's crippled Fukushima Daiichi reactors. Both started operating in 1979. The Osaka-based utility is in talks with Fukui local governments and other parties to make a final decision before winter.
Following the 2011 earthquake and tsunami that caused the Fukushima catastrophe, Japan limited nuclear plants' operating lifespan to four decades as a general rule. That period can be extended to a maximum of 60 years with the Nuclear Regulation Authority's approval, but that requires safety investments to the tune of 100 billion yen ($894 million).
Previously, energy companies generally aimed to extend the lifespan of old plants with generation capacities of millions of kilowatts. But with safety costs climbing and energy demand stagnating, turning a profit has grown difficult even at large-scale facilities.
Kansai Electric had already decided to decommission two smaller reactors at its Mihama plant, also in Fukui. Those were among Japan's six reactors -- not including Fukushima Daiichi -- with approval to shut down, all with output capacities in the 300,000 kW to 500,000 kW range.
Restarting a planned seven reactors is projected to cost Kansai Electric about 830 billion yen for safety measures. Adding the Oi pair would push the total over 1 trillion yen. Decommissioning a plant takes about 30 years and costs tens of billions of yen, but it is still cheaper than restarting it.
The power company sold around one-fifth less energy in fiscal 2016 than it did in fiscal 2010, as Japanese society grew more energy-conscious following the 2011 disaster and the liberalization of energy retail that led to a loss of customers. Shutting down the two Oi reactors and others will cut the Osaka utility's generating capacity by around 10%, but with demand also cooling, the reduction is not expected to crimp supply.
Nuclear power now contributes less than 10% of Japan's energy, down from about 30% before Fukushima. The government's current plan calls for nuclear power to make up about 20-22% of the total in 2030, far above the present scale.
Japan idled its nuclear plants to make them compliant with tougher safety standards after Fukushima. At present, just five are back online, operated by Kansai Electric, Kyushu Electric Power and Shikoku Electric Power. The government's target would require having around 30 plants running. But many are more than three decades old, and so will soon either need to be turned off or seek an extension.
If profit concerns force more power companies to go the Osaka utility's route, Japan's proportion of nuclear power will remain low, complicating the government's plan.