POWER UTILITY | Staff Reporter, Japan

Japanese nuclear power sector outlook cautious: Fitch Solutions

Though, Japan’s new carbon neutrality pledge can cause push for nuclear power.

Fitch Solutions reveals a cautious outlook for the Japanese nuclear power sector for the following decade despite its government’s targets of 2%-22% of nuclear share in the country’s power mix by 2030.

“We believe that substantial public opposition, lack of support from many local and regional governors, and the high costs of safety upgrades will continue to challenge the government’s push for nuclear restarts,” said Fitch Solutions Country Risk and Industry Research.

In the recently released report, Fitch Solutions forecasts that Japan will have a total of 14 nuclear reactors online by the end of 2029, upping the share of nuclear power in the country’s power mix to 8.8%.

“Most notably, we expect growth to surge in 2021, in line with a few reactors that we expect to come online—including Mihana 3, Onagawa 2, and Takahama 1 and 2, though these could be subjected to risk for delays,” Fitch Solutions added.

Moreover, the bleak outlook is also based on the risks online nuclear reactors are currently facing. According to Fitch Solutions, several online nuclear reactors were forced to temporarily suspend their operations this year as they missed the Nuclear Regulation Authority’s deadlines for the installation of counterterrorism measures.

Online nuclear reactors are also prone to court injunctions due to public opposition. “The Hiroshima High Court ruled in favour of residents' safety concerns which resulted in the imposition of a temporary injunction on the operation of Ikata No. 3 reactor in January 2020; the ruling overturned the District Court’s decision in March 2019 to allow continued operation at the plant, which was appealed by local residents' representatives,” Fitch Solutions said.

However, Japan’s recent carbon neutrality pledge can cause a greater push for nuclear power.

“We expect Japan to accelerate its shift away from coal generation amid stronger regulations against the fuel source, but stress that Japan’s ability to reduce its reliance on thermal generation will remain contingent on their ability to restart their nuclear power plants,” Fitch Solutions said.

Though, this development is yet to be factored in Fitch Solutions’ forecasts, as the Japanese government’s plans to achieve the new pledge are currently vague.

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