Analysts expect four of Japan’s nine operating reactors to close temporarily next year while utilities make changes required under stricter anti-terrorism rules adopted after the 2011 Fukushima disaster.
Operators Kyushu Electric and Kansai Electric Power are among the utilities that have been mandated to build emergency off-site control rooms to serve as backup bases that can keep nuclear reactors cooled and prevent meltdowns in the event of a terrorist attack.
Kyushu Electric has said its Sendai No. 1 reactor will be shut from March 16 to Dec. 26 next year, with No. 2 to be taken offline from May 20 to Jan. 26, 2021.
The utility has estimated the suspension of the two 890 megawatt (MW) units — the first plants to be restarted under stricter regulations after the 2011 disaster led to the shutdown of the nuclear power industry — would boost its monthly costs by ¥8 billion as it purchases fossil fuels such as LNG and coal as alternative fuels for power production.
“We plan to utilize a newly built 1,000 megawatt Matsuura No. 2 coal-fired power plant to replace nuclear power,” a Kyushu executive told an earnings news conference in October. The precise mix of substitute fuels will depend on various factors including demand and fuel prices, he said.
The Nuclear Regulation Authority has taken a strict line on enforcing deadlines by which the backup anti-terror bases are to be constructed. It turned down a request from Kyushu Electric for a deadline extension earlier this year, leaving the utility with no option but to decide on a temporary shutdown.
At Kansai Electric, serving Osaka, Kyoto and the surrounding industrial region, the deadlines for backup bases to be built at its Takahama No. 3 and No. 4 reactors are August and October 2020, respectively.
A Kansai spokesman said the company is making efforts to speed up construction. But analysts forecast the utility will be obliged to suspend operations at the reactors if it is to meet its deadlines.
Lucy Cullen, principal analyst at Wood Mackenzie, predicts Kansai will close the two Takahama reactors next year and expects a combination of coal, LNG and even oil could be used to offset the lost nuclear generation.
If both coal- and gas-fired generation capacity are available, the choice of substitutes for nuclear ultimately depends on relative fuel economics, Cullen said.
“When contracted LNG volumes are available, we would expect [utilities] to use LNG. However, if additional spot LNG cargoes are required, then coal is generally more economic,” she said.
The impact next year could be enough to help reverse a declining trend for Japan’s imports of LNG and thermal coal, falling since hitting peaks in 2014 and 2017, respectively, with January-October numbers this year for LNG down 7% and coal off 3% year on year
