Japanese town votes to restart reactors

A week after Japan switched off its last nuclear power plant in response to the disaster in Fukushima, a rural town council has approved the restart of two reactors under its jurisdiction, potentially opening the way for a return to limited atomic electricity generation in the country.

The decision on Monday by the town of Oi, in the western prefecture of Fukui, marked the first time since the meltdowns at Fukushima Daiichi in March last year that a local government has granted approval for a reactor to resume operations.

In spite of the Fukushima accident, the government in Tokyo wants to keep at least some atomic plants operating, citing the need to avoid electricity shortages. But local leaders have in effect shut down the industry by using their ability to veto the restart of reactors that have been closed for regular safety inspections.

The last of Japan’s 50 surviving reactors was powered down for an inspection on May 5, leaving the country without nuclear energy for the first time in four decades. Before Fukushima, nuclear plants provided 30 per cent of Japan’s electricity.

Oi’s decision does not mean the two reactors will immediately be turned back on: Fukui prefecture must also agree to restart them, while leaders of other cities and prefectures in the region have expressed concerns or, in some cases, outright opposition. Although politicians outside Fukui have no formal means of blocking the reactors from restarting, the sensitive nature of the nuclear debate means national officials and power companies are reluctant simply to override their objections.

Still, shares in Kansai Electric Power, owner of the Oi plant, jumped as much as 8.4 per cent on Monday in response to the Oi decision, and other utility stocks also rose. Kansai Electric suffered a net loss of Y242bn ($3bn) in the fiscal year that ended in March, in large part because of the cost of buying more natural gas and other fossil fuels to replace its lost nuclear capacity.

Similar costs at Tokyo Electric Power, owner of the ruined Fukushima Daiichi nuclear plant, led the company to reveal a Y782bn net loss for the year ended March 31. But, despite the huge additional costs of stabilising the Fukushima plant, the company said it expected its financial problems to shrink this year as it passes more of its disaster-related costs on to customers.

Tepco, which is being nationalised in return for Y1tn in emergency capital from the government, said it expected to suffer a loss of Y100bn this year.

In Oi, the council voted 11-1 in favour of restarting the reactors. Like many rural towns that host nuclear plants, Oi is heavily dependent on the taxes, jobs and subsidies that the industry provides, and financial considerations appeared to have helped decide the issue. “A prolonged shutdown would diminish tax revenues and impact the local economy,” Japanese media quoted one councillor as saying.

Yoshihiko Noda, prime minister, had provided political cover for the council’s decision last month by declaring that the two reactors were safe enough to restart. The units were the first in Japan to undergo computer-simulated “stress tests” designed to assess their resistance to unusually large earthquakes and tsunamis of the sort that destroyed four reactors at Fukushima Daiichi.

Kansai Electric is more heavily dependent on atomic power than any Japanese utility, with about half its electricity coming from nuclear before Fukushima. The utility and the government have warned that western cities such as Osaka might have to endure mandatory limits on usage this summer.

Not everyone is convinced of the threat, however: Toru Hashimoto, Osaka’s mayor, who has emerged as the leader of the anti-nuclear forces in the region, believes official estimates of supply shortfalls are exaggerated, and says the city could get through the summer with smaller, voluntary savings by citizens.