Tag: Japan

Kiran Stacey

Naoto KanWednesday has been an important day for the nuclear industry.

First of all, Japanese prime minister Naoto Kan (pictured) told reporters he wanted to remodel entirely his country’s energy supply around renewable technology. He said:

I have repeatedly said that we need to rethink our basic energy policy from scratch… The direction that it may take will likely be centered around wind, solar, and biomass energy.

Kiran Stacey

Tepco president Masataka Shimizu

Tepco president Masataka Shimizu

The news last week that the Japanese government was close to agreeing a bailout plan for Tepco, the electricity company that owns the Fukushima nuclear plant, should have come as a relief for the company and its debt holders.

But the opposite appears to be true. Amid uncertainty over the structure of the bailout and when it might finally be agreed, Moody’s has taken the proactive step of downgrading the company’s debt, saying that the plan as it looks so far actually increases the risk of a default.

The clause that particularly seems to trouble the ratings agency is the one that Tepco will only be insured for compensation payments of up to Y120bn. Anything above that limit will be the company’s liability.

Given the scale of the original reaction to troubles at Japan’s Fukushima-Daiichi nuclear plant, it’s interesting to see the degree to which uranium ore prices have stabilized since March. Especially since the crisis itself is doing anything but.

Indeed, via RBC Capital markets on Wednesday:

Kiran Stacey

Radiation testing in JapanHow significant is it that Fukushima is now rated as a level seven nuclear accident, the highest level, and on a par with Chernobyl?

To an extent, it is not: the upgrade reflects a fresh analysis of historical radiation data rather than a worsening of the current situation. Nothing new has happened overnight to transform this from a level five accident to a level seven.

And many in the nuclear industry are understandably keen to play down the comparison with Chernobyl, which was the only other accident to reach level seven.

Kiran Stacey

Moody’s has been explaining why it downgraded Tepco’s credit rating in the wake of the Fukushima crisis. It’s hardly a decision that needs much justification: the problems have been as visible and arguably as damaging to the company’s reputation as the Gulf of Mexico spill was to BP.

But Moody’s report makes some interesting points: the first being that its analysts think there is a high likelihood of the Japanese government stepping in to prop up the company. This actually gives the company a higher long-term rating than its stand-alone credit profile (SACP), which is now a junk-rated BB+.

A strong earthquake of magnitude 7.1 shook the northeast of Japan late on Thursday, and a tsunami warning was issued for the coast already devastated by last month’s massive 9.0 quake and the tsunami that crippled a nuclear power plant.

Tokyo Electric Power, operator of the crippled Fukushima Daiichi nuclear station, said initial checks on the plant had shown no new problems. Injections of coolant water into its overheated reactors, and of nitrogen gas into one unit were proceeding normally, and levels of contaminated-water in service tunnels under the plant were unchanged, it said. No workers at the plant were hurt.

Nuclear safety authorities said another nuclear power plant further to the north, Onagawa nuclear station in Miyagi, had lost external power from two of its three electricity lines, but all its safety systems were working on the remaining line. The plant, like all other nuclear stations along Japan’s northeast coast, has been off line since the country’s massive March 11 earthquake and tsunami, and its uranium fuel has been cooled to safe levels.

Kiran Stacey

Fukushima Daiichi before the tsunamiThere has been a great deal of commentary in the last few weeks that the nuclear crisis at the Fukushima plant is not as bad as the Chernobyl meltdown.

We can only hope that prediction proves correct. But for the nuclear industry, say the analysts at UBS, the consequences are already even worse.

In a mammoth 140-page report looking at the future of the global nuclear industry, they say:

While the 1986 Chernobyl accident, at least to date, had a significantly greater environmental impact, we would argue that Fukushima raises even larger credibility issues for the nuclear industry than previous accidents.

Kiran Stacey

In this week’s readers’ Q&A session, Ketih Parker, chief executive of the UK’s Nuclear Industry Association, answers your questions.

In this post, he discusses whether the events in Fukushima are a good advertisement for the industry, what are the full costs of nuclear power and what the industry’s view is of renewable power.

Earlier, he answered your questions on what constitutes a nuclear meltdown, whether there is likely to be a public backlash against nuclear in the UK and how the industry should now change.

Next week, Amrita Sen, oil analyst at BarCap, answers all your oil-related queries. Email questions to energy.source@ft.com by the end of Sunday, March 27th.

But for now, over to Keith:

Kiran Stacey

In this week’s readers’ Q&A session, Keith Parker, chief executive of the UK’s Nuclear Industry Association, answers your questions.

In the first of two posts, Keith answers your questions on what constitutes a nuclear meltdown, whether there is likely to be a public backlash against nuclear in the UK and how the industry should now change.

In the second post, published later on Friday, he will discuss whether the events in Fukushima are a good advertisement for the industry, what are the full costs of nuclear power and what the industry’s view is of renewable power.

Next week, Amrita Sen, oil analyst at BarCap, answers all your oil-related queries. Email questions to energy.source@ft.com by the end of Sunday, March 27th.

But for now, over to Keith:

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