Major Issues Regarding Nuclear Power Generation Costs Assessment in Japan

摘要

This paper reviewed and assessed major issues based on the existing assessments of nuclear and other power generation costs, a key matter for making energy policies. In Japan, many major issues on power generation costs have been comprehensively discussed at the Cost Review Committee created by the government in 2011. Most of these issues, with some exceptions, might have been discussed appropriately. The issue that has been left as the biggest challenge is the accident risk cost, as discussed in detail by a separate paper. Studies and model development must be conducted to enable more reliable assessments of accident damage and frequency The decommissioning cost and the backend cost, including geological disposal and reprocessing of nuclear spent fuel, do not account for any large share of nuclear power generation costs, in contrast to what is generally believed. What has the greatest impact on the economics of nuclear power generation is the financing issues, represented by the discount rate for estimating power generation costs, as has been widely perceived since before the Fukushima accident. Since electric utilities have so far been able to raise funds in a relatively favorable environment, nuclear power generation has actually been cheaper than other power generation methods in Japan. In the United Kingdom where electricity market deregulation has made progress since the 1990s, however, an increase in electric utilities' financial costs has been expected to affect the economics of nuclear power generation, becoming one of the major factors behind the stagnation of new nuclear plant construction projects. If Japan's introduction of a more competitive electricity market affects the credit ratings of electric utilities, it may become difficult for them to raise funds at lower interest rates, bringing about a large change in the economics of nuclear power generation. Given that business conditions for electric utilities in Japan are far different from those in Europe and the United States, however, future developments in Japan are uncertain. Given that the economics of nuclear power generation has a great impact on the future energy mix, we must pay special attention to this point in discussing Japan's energy policy.