Earthquake in Japan clouds the case for restarting nuclear power reactors

 Earthquake in Japan clouds the case for restarting nuclear power reactors

Source reuters.com

By Reuters

January 4, 2025, at 4:46 P.M 

Japan, January 4 (Reuters) - The strong earthquake that struck Japan's western shore on New Year's Day highlighted the nation's vulnerability to natural calamities and raised new concerns about efforts to restart the country's nuclear reactors.

Because of its location on the seismically active "Ring of Fire" that encircles the Pacific Ocean, mountainous Japan is dotted with nuclear power reactors.

Days after regulators lifted an operational prohibition on Tokyo Electric's (9501.T) Kashiwazaki-Kariwa nuclear power plant, a magnitude 7.6 earthquake occurred on Monday, killing over 80 people in the Hokuriku region and destroying infrastructure and power to houses.

The plant has been offline since 2012 and Tepco seeks municipal approval to reopen it. It is located about 120 kilometers from the epicentre of the earthquake. Due to safety violations, including a failure to safeguard radioactive materials, the utility was prohibited from running the facility until 2021.

According to experts at Rystad Energy, "the Japanese public is still generally less positive toward nuclear power now than they were before the Fukushima disaster." This was stated in a client note.

"As a result, public sentiment – and potentially government policy – is likely to be sensitive to any new power-plant disruptions caused by the most recent quake or any future ones."

After the tsunami and Fukushima accident in March 2011, Japan had intended to phase out nuclear power. However, a shift has occurred toward the development of next-generation reactors and the restarting of idled capacity due to rising energy prices and recurring power shortages.

Following the earthquake on January 1, Tepco stated that radiation levels were normal despite reports of water spilling from nuclear fuel pools at the world's largest nuclear power station, Kashiwazaki-Kariwa.

"It seems that this earthquake has reignited a sense of fear among citizens, who had felt that Tepco could probably be able to restart reactors by the end of 2024," said Yukihiko Hoshino, a member of the Kashiwazaki city assembly who is against the plant restart.

The tsunami warning on Monday brought back memories of the Fukushima accident, he claimed.

The first trading day after the earthquake saw a steep 8% decline in Tepco shares, which ultimately closed 2.2% higher.

The shuttered Shika plant of Hokuriku Electric (9505.T), which is situated about 65 kilometers from the epicenter of the earthquake, had losses spike up to 8% before reducing them to 2.2%.

After the earthquake, the firm reported oil leaks at the plant and water spills from spent nuclear fuel pools. It stated in October that it intended to restart the No. 2 reactor there sometime after April 2026.

Tatsunori Kawai, chief strategist at Au Kabu.com Securities, stated that "today's heavy selling was mostly due to overall market sentiment and initial panic selling."

"Traders later realised that this heavy selling cannot be justified," he said.

According to Rystad, Japan—the second-largest LNG importer in the world—does not now appear to be using spot markets in the same way that it did following an earthquake in March 2022.

The super-chilled fuel may be purchased in response to extended power plant outages, such as those that occur in 2022, but spot power rates suggested regular operations, according to Rystad.

Hugh Lawson edited the work with reporting by Kantaro Komiya, Sam Nussey, Mariko Katsumura, and Sudarshan Varadhan.