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Japan: Stress tests for all reactors, new disaster relief budget, reconstruction chief resigns

Updated On: Jul 06, 2011

UPDATE 2: Japan has clarified plans to 'stress test' the country's nuclear reactors. The safety of nuclear power plants will be assessed in two stages.

The first stage of tests will examine whether the 35 reactors currently sitting idle could withstand big earthquakes and tsunamis. After passing this assessment, reactors may be restarted while they undergo more rigorous testing.

Prime Minister Naoto Kan, who is under extreme pressure to resign, caused confusion last week by announcing the stress tests. His announcement contradicted earlier advice from the government that the country's idle reactors were safe to restart.

Report: Japan clarifies nuclear 'stress testing' [BBC News, 11 July 2011]

UPDATE 1: Following the Japanese government's announcement that stress tests were being conducted on all nuclear facilities, the mayor of Genkai may withdraw his consent to restarting two of the town's reactors. Although he had previously given the green light to restart the reactors, the government's announcement caught local authorities off guard, causing the mayor to reconsider the initiative. 

The Japanese government is currently working out conditions for allowing the restart of the reactors. The mayor has said he will wait for the results of the stress tests before releasing his decision.

Report & Analysis: Japan's first nuclear restart in doubt after stress test proposal [Reuters, 7 July 2011]

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Japan will conduct stress tests on all the nuclear reactors in the country to determine how well they could withstand major disasters, like the quake and tsunami that hit Fukushima.

Countries within the European Union have already agreed to proceed with similar stress tests on the region's nuclear reactors, and previously called for such checks to be made worldwide.

Japan's Economy, Trade and Industry Minister Banri Kaieda announced the move earlier today, according to the Jiji news agency. Kaieda also said there would be no problem with power supplies in upcoming months.

Many of Japan's nuclear reactors are still offline in the wake of the crisis. The situation has raised concerns that Japan might experience electricity shortages during the peak usage summer period. But there is also a high level of public anxiety over potential restarts. Many local government officials oppose restarting nuclear plants in their areas due to safety concerns.

Report: Japan to conduct 'stress test' on nuclear plants [Channel NewsAsia, 6 July 2011]

Separately, a former special adviser to Kan has said Japan should lower its dependence on nuclear power generation, but cannot afford to scrap it altogether.

Speaking to journalists, parliament member and former Transport Minister Sumio Mabuchi warned: "If we decide to abandon nuclear power, there will be inconveniences and costs and the question is whether the public is prepared for that."

"The Japanese economy would run out of steam the moment supplies of electricity generated by nuclear power are suspended."

Report: Lessen reliance on nuclear power, ex-adviser to Kan says [Asahi Shimbun, 6 July 2011]

Delays in reactor restarts, combined with the shutdown of tsunami-hit plants, have left Japan with only 19 of its 54 reactors still operating. Before the crisis in March, nuclear power provided about 30 percent of Japan's electricity.

Reactors at Kyushu Electric Power Co's 36-year old plant in the town of Genkai in the southern Saga prefecture are likely to be the first to return online, pending an approval from the prefecture's governor. The Genkai city mayor has already given his consent to the restart. But commentators say the Saga case may not necessarily inspire other regions to follow suit.

Japanese electricity power companies remain on high alert to ensure power saving efforts are in place so as to at least secure a minimum reserve margin on electricity supply and avoid having to conduct rolling blackouts. Yesterday, Kyushu began posting forecasts for daily maximum electricity demand on its website, urging customers to curb excess electricity use. Similarly, Chubu Electric Power Co has asked users to save power, especially from Mondays to Wednesdays, which are the peak manufacturing days for Japan's auto factories.

Report: Japan eyes first nuclear restart since quake, power worries stay [Reuters, 5 July 2011]

Kyushu, Chubu, and six other Japanese power companies have had their credit ratings cut by Moody’s Investors Services, which cited a “less supportive” regulatory framework following the Fukushima nuclear disaster. Utilities that generate nuclear power had their ratings but by two notches, while the rankings of others were lowered by one level, Moody’s said in a statement.

Previously, Tokyo Electric Power Co. (Tepco) had its long-term credit rating cut four steps to junk status by Moody’s, while Tokyo Gas Co. had its senior unsecured debt rating cut by one notch.

Report: Moody’s Cuts Ratings on Japanese Utilities, Tokyo Gas [Bloomberg, 5 July 2011]

Yesterday, Tepco announced plans to pay an additional compensation of up to 48 billion yen (US$594 million) to local residents affected by the nuclear accident. About 160,000 people will receive the second round of payments.

Tepco has already paid about 49.8 billion yen (US$614 million) in the first round of compensations since it started making payments in April. Last month, Japanese leaders said the government will help foot the bill for reparations.

Report: Tepco to Pay Up to 48 Billion Yen in Extra Compensation [Bloomberg, 5 July 2011]

Japan's cabinet has just approved a second budget of 2 trillion yen (US$24.7 billion) for reconstruction after the March earthquake and tsunami. The money will be spent on rebuilding and helping victims of the Fukushima crisis, including health checks.

The second emergency budget will be sent to parliament for approval next week, and the government aims to pass it by the end of the month.

Japan's parliament previously passed a first 4 trillion yen (US$49 billion) emergency budget in May to fund new housing for people made homeless and support businesses hit by the disaster.

Japan is already facing huge public debts, but the government says they will not borrow money from the market for this budget. Instead, they will use money left over from the annual budget for the last fiscal year to March.

Opposition parties have so far signaled they will support the emergency spending.

The extra budget is one of the conditions Japanese Prime Minister Naoto Kan has promised to fulfill before his eventual resignation. Kan has been under fire over alleged mishandling of the crisis. He survived a no-confidence vote last month by promising to step down, but has declined to say when he will keep that pledge.

Report: Japan's cabinet approves $24.7bn for disaster relief [BBC News, 6 July 2011]

Kan's government took another blow yesterday, when the minister in charge of reconstruction efforts resigned after barely a week in the job. Ryu Matsumoto stepped down over strong criticism for his insensitive remarks.

On Sunday, Ryu Matsumoto said the government would not help communities that failed to come up with ideas themselves. In front of television cameras, Matsumoto also scolded a local governor for keeping him waiting, then demanded that the journalists not report the exchange.

Matsumoto will be replaced by Tatsuo Hirano, a minister from Iwate prefecture, one the areas hardest hit by the crisis.

Report:  Japan reconstruction minister quits in fresh blow to PM [Reuters, 5 July 2011]







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