Hitachi boss just like proverbial general fighting the last war

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A new nuclear power plant planned by Horizon Nuclear Power Ltd., a subsidiary of Hitachi Ltd., would have been situated on the island of Anglesey in Wales
January 19, 2019
“Generals always fight the last war” is an aphorism meaning that military leaders tend to draw upon their experiences from the previous war when planning a new strategy.
Their strategy is doomed to failure because of their inability to keep up with the times by staying abreast of technological renovations and exploring new types of warfare.
Their counterparts seem to exist in present-day Japan.
Trying to “fight the last war,” such individuals are to be found among nuclear plant manufacturers as well as within the Prime Minister’s Office and the Ministry of Economy, Trade and Industry.
Apparently, they cannot forget the good old 2000s, the era of global “Nuclear Renaissance.”
Memories of Three Mile Island and Chernobyl were starting to fade into oblivion then, and that helped revive nuclear plant construction. And with the nuclear industry becoming energized in various countries, Japan was determined to grab a share of the pie, and both the public and private sectors joined forces to push nuclear plant export.
And unbelievably, they keep this up even after the Great East Japan Earthquake of 2011.
Did they believe the Fukushima disaster would have little impact on the rest of the world?
They were utterly wrong, of course. Nuclear plant construction costs skyrocketed due to reinforced safety standards.
One after another, export projects were aborted. A Hitachi project in Britain was frozen. Losses amounting to 300 billion yen wiped out the bulk of annual profit.
It is hard to believe that Japanese industry and the government, which bear grave responsibility for the Fukushima disaster, could have been so oblivious to change.
Or could it be that they were simply unable to think straight because they could not find a business they could sell to the rest of the world?
Hitachi Chairman Hiroaki Nakanishi is also chairman of Keidanren (Japan Business Federation). At a recent news conference, Nakanishi created a stir by strongly advocating restarts of off-line nuclear reactors.
Is he growing frustrated and impatient over stalled exports? He obviously is totally out of touch with Japanese public opinion that has grown sensitive to the risks inherent in nuclear power generation.
I am convinced Nakanishi is the proverbial general who keeps fighting the last war.
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Japanese gov’t plan to export nuclear power technology to Turkey floundering

Japanese gov’t plan to export nuclear power technology floundering
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A planned nuclear plant construction site is seen in Sinop, northern Turkey, in this 2012 file photo.
 
TOKYO — The Japanese government’s strategy to export nuclear power technology has run aground amid rising safety costs and deteriorating prospects for project profitability. While the government has aimed to maintain the country’s nuclear technology and expert resources through construction of atomic reactors abroad amid stalled nuclear plant development at home, its projects with Turkey and Britain have both hit snags.
“The Turkish government is in the midst of evaluating the project. I believe it will respond to us in some way or other,” said Shunichi Miyanaga, president of Mitsubishi Heavy Industries Ltd., in mid-December about a plan to build a nuclear power plant in Sinop, northern Turkey. Miyanaga’s comment suggested that the fate of the project had been left up to the Turkish government.
At the end of July last year, Mitsubishi Heavy told the Turkish government that the cost of the project would total somewhere around 5 trillion yen, more than doubling from the original estimate of roughly 2.1 trillion yen. As the plan envisages recovering the costs through profits from power generation at the nuclear facility, it would not become profitable unless Turkey purchases the generated electricity at a higher price than originally expected. If Turkey does not comply with the increased burden, Japan would withdraw from the plan.
The nuclear plant project was pitched by Prime Minister Shinzo Abe to then Turkish Prime Minister Recep Tayyip Erdogan in 2013. At the time, Abe vowed at a press conference in Ankara, “We will share our experiences and lessons from the (2011) disaster at the nuclear plant (run by the Tokyo Electric Power Co. in Fukushima) with the rest of the world, and will strive to contribute to enhancing the safety of nuclear power generation.”
However, the catastrophe prompted the international community to turn a wary eye toward nuclear power, leaving the costs for safety measures at nuclear plants to swell. The steep fall in the Turkish lira over the past year by more than 30 percent also added to the project’s deteriorating profitability.
Under these circumstances, Tokyo plans to propose to Ankara that it would provide comprehensive energy cooperation in such spheres as coal-fired thermal power generation and liquefied natural gas, in place of the atomic plant project. Because the nuclear power project is based on an agreement struck by both leaders, such a proposal by Tokyo could face a backlash from Ankara, but Japan’s focus is already shifting to how to withdraw from the project without undermining bilateral diplomatic ties with Turkey.
Meanwhile, a nuclear plant construction project undertaken by Hitachi Ltd. on the Isle of Anglesey in central Britain has also run into rough waters, after the project’s costs soared to approximately 3 trillion yen, about 1.5 times the initial estimate.
In May last year, Hitachi Chairman Hiroaki Nakanishi held talks with British Prime Minister Theresa May, where the latter agreed to expand her government’s support for the project. However, British citizens have been wary of the scheme out of concern that it could lead to rising electricity bills should Japan’s request to raise the sale price of electricity be accepted.
As the May administration is suffering from sagging approval ratings amid turmoil over Britain’s exit from the European Union, it is becoming increasingly difficult for London to comply with an increased burden. At home, Japanese companies are also becoming more reluctant to invest in the project out of fears of poor profitability and accident risks. Given the circumstances, Tokyo is also likely to exit the project.
The Abe administration has made the export of nuclear power technology a pillar of its growth strategy, but to little avail thus far. While the government intends to pursue measures to counter China and Russia’s aggressive drive to export nuclear plants by stepping up financial support for partner countries and through other measures, such a strategy may end up bringing more harm than good.
“The empirical values of China and Russia, where nuclear power plants are still being built, are considerably high (compared with other countries including Japan),” said Tomoko Murakami of the Institute of Energy Economics, Japan. In China, where 100 nuclear reactors are planned to be operational by 2030, state-owned companies are securing a spate of orders for nuclear power projects mainly in emerging countries, with the financial backing from the Chinese government. Russia also is said to undertake the whole process from leasing nuclear fuel to other countries to reprocessing their spent fuel, with the possible aim of boosting its diplomatic and security influence as well.
Officials in the Japanese nuclear power industry are finding a ray of hope in the Czech Republic’s plan to build a nuclear power plant, which has also attracted attention from China, Russia, South Korea and a joint venture of Mitsubishi Heavy and France’s Framatome. However, financial issues are again casting a shadow over the plan.
Tadashi Narabayashi, a specially appointed professor at the Tokyo Institute of Technology, warns that at this rate, “Japan would lose its own atomic power industry, and would have to import Chinese-made nuclear plants 20 years from now. It’s a critical situation.”
Meanwhile, a senior official of an economy-related government body said, “It is difficult for Japanese manufacturers, which can’t even build nuclear plants in their own country, to win confidence (abroad),” suggesting that the government’s strategy to export nuclear power technology in itself is unreasonable.
Gov’t to give up plan to export nuclear power reactors to Turkey
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In this Nov. 6, 2018 file photo, Japan’s Prime Minister Abe, right, shakes hands with Turkish Foreign Minister Mevlut Cavusoglu at the prime minister’s office in Tokyo.
 
TOKYO — Japan is expected to effectively withdraw its plans to build a nuclear power plant in Turkey by asking Ankara to inject a significantly larger amount of funds amid ballooning safety costs — a demand Turkey is likely to reject — according to people familiar with the decision.
The Japanese government decided to ask for the increased coverage by Turkey as a final condition for constructing the plant. Under the current proposal, the plant is to be built by ATMEA, a joint venture of Japan’s Mitsubishi Heavy Industries Ltd. (MHI) and French nuclear plant maker Framatome, near the Black Sea coastal town of Sinop in northern Turkey.
Besides the Turkish project, another plan to export nuclear power reactors to Britain by Hitachi Ltd. also faces difficulties. If both plans fail, a growth drive strategy of the administration of Prime Minister Shinzo Abe will collapse.
The Turkish project has its roots in a 2013 joint declaration for cooperation over the construction of nuclear power plants signed by Prime Minister Abe and then Turkish Prime Minister Recep Tayyip Erdogan. Under the original plan, four medium-sized ATMEA1 reactors would be built for the start of operation in 2023.
However, the total cost estimate conducted in July 2018 by MHI for the project more than doubled from the original projection of some 2.1 trillion yen to around 5 trillion yen. The price hike occurred amid rising safety costs following the 2011 triple core meltdowns that hit the Tokyo Electric Power Co.’s Fukushima Daiichi Nuclear Power Station, as well as the finding of an active fault near the Sinop site. In addition, the Turkish lira has gone down since the summer of 2018, eroding the project’s profitability further. Tokyo therefore decided to increase the sale price of electricity to be generated by the new nuclear power station in a bid to recover project costs.
It is expected to be difficult for Ankara to accept the new condition, because it would mean the Turkish people would have to shoulder a greater financial burden. Japan and Turkey will effectively discuss how to arrange Japan’s departure from the project. In a bid to sustain their bilateral relationship, the Japanese government and MHI plan to propose to Turkey provision of high efficiency coal-fired power production technologies and other offers.
Meanwhile, Hitachi, which also manufactures nuclear reactors, has acknowledged that it faces difficulties in completing a project to build two nuclear reactors in Britain. Chairman Hiroaki Nakanishi of the company told reporters in December that he informed the British government that the plan was “at a limit” due to a surge in project costs.
Both the Turkish and British projects have been pitched directly by Prime Minister Abe, but those once promising plans now appear to be falling apart.

Sun setting on Japan’s nuclear export sector

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December 16, 2018
Post-Fukushima cost overruns may kill a giant power project in Turkey, and there are few other deals to replace it
Japan’s nuclear export industry could be dealt a fatal blow if Mitsubishi Heavy Industries pulls out of a massive project to build four large power plants on Turkey’s Black Sea coast, as reports have suggested.
The Sinop plant project in Turkey was seen as Japan’s best chance for an industry – battered and bruised after the 2011 tsunami and triple meltdown at Fukushima – to put together a workable export strategy that did not break the bank of potential international customers.
Aside from Sinop, the Japanese industry has only one viable export project still upcoming: Hitachi’s bid to build two reactors on the island of Anglesey in Britain. And even that deal is looking shaky.
Mitsubishi Heavy Industries (MHI) has not pulled the plug yet on its stake in the four-reactor project on Turkey’s Black Sea coast, but a slew of domestic media reports and talk in Tokyo, suggests that, in the face of seemingly ever-rising construction costs to meet new safety standards that have been put in place since the 2011 Fukushima disaster, the company will bail.
Fukushima legacy
When the deal was signed with Ankara in 2013, the ownership profile was: 65% awarded to a consortium made up of MHI, Itochu, France’s Areva, and GDF Suez. The other 35% was covered by Turkey’s electric power utility, Elektrik Uretim.
However, in April, Itochu pulled out of the consortium, citing cost overruns. That left the consortium with 51%, and the remaining 49% owned by the Turkish utility.
Without Mitsubishi the viability of the project is in question, sources say, unless Turkey can find a new partner or is willing to take on the project without its largest foreign partner. The Russians, who are building a nuclear complex on Turkey’s southern Mediterranean coast, might be interested.
According to Kyodo, a thorough cost evaluation was to be completed by the end of this year. Itochu waited for the report to be released before bailing out of the deal. MHI is apparently waiting for the study to be completed before deciding its next move.
When the deal with Mitsubishi was signed in 2013, the estimated cost was $18 billion for four 1,100-megawatt nuclear power plants. But overall costs have soared, passing $42 billion in April – when Itochu withdrew, and is now put at about $44 billion.
Cost increases are nothing new in the nuclear power industry, but have been exacerbated in recent years by expensive adjustments phased in to meet more stringent safety concerns following the earthquake and tsunami that destroyed four units of the Fukushima Daiichi plant. The Sinop cost rises, however, also encompass other problems encountered in construction.
Fukushima, one of the most serious nuclear accidents in history, turned most of Japan against nuclear power. Before March 11, 2011, Japan had 54 nuclear plants. All were shut down after the accident and some are slowly returning to service having passed scrutiny by the regulator. Five are expected to restart within the next five years, and eight will likely be decommissioned. But prospects for the remaining plants are unclear.
Aware that no new nuclear plant may ever be built at home amid the anti-atomic public mood, Japan’s nuclear vendors have turned to overseas exports as the Fukushima accident does not appear to have destroyed the Japanese industry brand in other countries.
Endgame for nuclear exports?
If Mitsubishi does pull out of the huge project in Turkey it will be a blow to Prime Minister Shinzo Abe, who sees international exports of nuclear technology as an important way to boost the economy. On his many trips abroad, he often acts as a salesman for nuclear exports. For example, it was a topic of discussion with Turkish President Recep Erdogan on the sidelines of the G-20 meeting in Argentina.
Details of the conversation were not revealed, but it would be a good bet that they discussed the Sinop project with the threat of Mitsubishi hanging over them, and that Abe sought ways to keep the project viable.
Meanwhile, it is not just MHI that may have doubts about the sector. Japan’s nuclear export industry has suffered plenty of setbacks in the seven years since Fukushima. Questions about the future of the sector hang over all three main players in the sector.
Toshiba, one of Japan’s big-three nuclear constructors, recently pulled out of the nuclear power business overseas after incurring huge losses in the United States.
Toshiba has also suffered something of an administrative meltdown in its quest to win construction contracts in the US. In February it finally unloaded it money-losing American subsidiary, Westinghouse, for $1 billion less than it paid to acquire the company 10 years ago.
If the export program is to remain viable, it may be in Wales, where the British government is seeking to build a two-reactor nuclear power plant on the island of Anglesey. Among those bidding for the project is Japan’s third nuclear constructor, Hitachi, through a subsidiary called Horizon Nuclear.
In the nuclear world, there are constructors – like MHI, Toshiba and Hitachi – and operators, who run the plant after it is completed, and they are not always the same. Japan learned from Korea’s successful bid to build six nuclear plants in the United Arab Emirates that offering to build and also run them – a one-stop service – is key to making sales.
Hitachi is teaming up with the Japan Atomic Power Company, which operates two plants in Japan (although both are currently shut down pending the review by regulators). The plan is to present the British with a package deal.
Now, there are worries that Hitachi might pull out of the British project. Chairman Hiroaka Nakanishi was quoted in the Times of London saying his company was “facing an extreme situation,” and that a final decision on whether to stay with the project or leave it will be made next year.
If Mitsubishi does, as is widely expected, pull out of the huge project in Turkey, the only egg left in Japan’s overseas nuclear export basket will be Wales.

Japan’s nuclear export strategy struggles despite India deal

Reactor manufacturers falter, from Toshiba to Areva

0608N_Japan_India_article_main_imageIndian Prime Minister Narendra Modi, left, and Japanese counterpart Shinzo Abe reached a final agreement on the nuclear cooperation pact last November.

 

Japan’s push to increase exports of nuclear technology has been cooled by Toshiba’s Westinghouse problems, undercutting a pillar of Prime Minister Shinzo Abe’s economic growth strategy just as a pact with India comes into effect.

The Diet’s upper house approved a nuclear cooperation deal with India on Wednesday. India plans to boost its nuclear power production capabilities tenfold as economic growth fuels energy demand.

India and Japan began negotiations in 2010, reaching an agreement in November when Indian Prime Minister Narendra Modi visited Abe. Japan will revise related directives for its Nuclear Regulation Authority. India already greenlighted the pact, which takes effect once both countries notify each other of such approval. This could happen as early as July.

India has 22 nuclear plants in operation and five under construction, the International Atomic Energy Agency says. The country plans to source one-quarter of its energy from nuclear power by 2050.

“Population and economic growth will further strain energy supply and demand,” said Satoshi Shimizu of the Japan Research Institute. “There is a lot of room for Japan to export nuclear power.”

But Japan’s export efforts have not gone according to plan. In June 2016, the U.S. and India reached a basic agreement on a deal commissioning Toshiba’s American subsidiary Westinghouse Electric to build six nuclear reactors. Japan had rushed to finalize the pact with India since Toshiba would be involved in supplying parts, but Westinghouse’s bankruptcy protection filing in March has thrown the conglomerate into crisis.

More global headwinds buffet the industry. Severe delays in the construction of nuclear power facilities by France’s Areva have ballooned losses, with the French government now leading the company’s reorganization. Vietnam canceled nuclear energy plans in November due to financial reasons and local opposition.

“Conditions have changed due to Toshiba and other issues,” said Takeo Kitsukawa, a professor at Tokyo University of Science. “The first issue is how to get [nuclear reactor] manufacturers back on their feet.”

A separate document indicates that Japan will cease cooperation should India break a 2008 pledge, made by its foreign minister at the time, to suspend nuclear tests. India has maintained its moratorium on nuclear testing since 1998.

Japan’s opposition Democratic Party disapproves of the India deal because the provision halting cooperation is not included in the agreement itself, and thus may offer insufficient legal guarantees limiting nuclear technology exports to peaceful uses. Opposition parties also worry that India is not a member of the Treaty on the Non-Proliferation of Nuclear Weapons.

http://s.nikkei.com/2sEJqcu