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Economy

Japan's nuclear export strategy struggles despite India deal

Reactor manufacturers falter, from Toshiba to Areva

TOKYO -- Japan's push to increase exports of nuclear technology has been cooled by Toshiba's Westinghouse problems, undercutting a pillar of Prime Minister Shinzo Abe's economic growth strategy just as a pact with India comes into effect.

The Diet's upper house approved a nuclear cooperation deal with India on Wednesday. India plans to boost its nuclear power production capabilities tenfold as economic growth fuels energy demand.

India and Japan began negotiations in 2010, reaching an agreement in November when Indian Prime Minister Narendra Modi visited Abe. Japan will revise related directives for its Nuclear Regulation Authority. India already greenlighted the pact, which takes effect once both countries notify each other of such approval. This could happen as early as July.

India has 22 nuclear plants in operation and five under construction, the International Atomic Energy Agency says. The country plans to source one-quarter of its energy from nuclear power by 2050.

"Population and economic growth will further strain energy supply and demand," said Satoshi Shimizu of the Japan Research Institute. "There is a lot of room for Japan to export nuclear power."

But Japan's export efforts have not gone according to plan. In June 2016, the U.S. and India reached a basic agreement on a deal commissioning Toshiba's American subsidiary Westinghouse Electric to build six nuclear reactors. Japan had rushed to finalize the pact with India since Toshiba would be involved in supplying parts, but Westinghouse's bankruptcy protection filing in March has thrown the conglomerate into crisis.

More global headwinds buffet the industry. Severe delays in the construction of nuclear power facilities by France's Areva have ballooned losses, with the French government now leading the company's reorganization. Vietnam canceled nuclear energy plans in November due to financial reasons and local opposition.

"Conditions have changed due to Toshiba and other issues," said Takeo Kitsukawa, a professor at Tokyo University of Science. "The first issue is how to get [nuclear reactor] manufacturers back on their feet."

A separate document indicates that Japan will cease cooperation should India break a 2008 pledge, made by its foreign minister at the time, to suspend nuclear tests. India has maintained its moratorium on nuclear testing since 1998.

Japan's opposition Democratic Party disapproves of the India deal because the provision halting cooperation is not included in the agreement itself, and thus may offer insufficient legal guarantees limiting nuclear technology exports to peaceful uses. Opposition parties also worry that India is not a member of the Treaty on the Non-Proliferation of Nuclear Weapons.

"The agreement is premised on India continuing its moratorium on nuclear tests," Chief Cabinet Secretary Yoshihide Suga, who is part of Abe's ruling Liberal Democratic Party, told reporters Wednesday. "We have clearly communicated that to India."

(Nikkei)

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