Kanamori and Kaberger reported in 2019 that seven years after the nuclear core melt down, the experience shows a lack of readiness, and absence of any plan for how to manage the economic consequences of an accident of this magnitude. Still, the improvised solutions, have for the seven years both kept the government’s borrowing capacity intact, and allowed TEPCO to avoid going bankrupt.
The authors predict that the 2017 TEPCO Special Business Plan will be impossible to fulfill. Further improvised and complicated solutions may follow. However, it is
increasingly unlikely that the current idea of nuclear power companies in different ways paying will be compatible with the global development of low cost renewable
electricity generation technology and competitive electricity markets. Instead the development appears likely to make it impossible to generate profits by nuclear or other large scale thermal power plants.
Even without the Fukushima related liabilities, Japan’s electric power companies would have economic challenges. A less complex solution, worth investigating further, would be that the government directly takes over all the nuclear liabilities from the power companies and have the power companies paying by transferring the transmission network to a government controlled national transmission system operator. That solution would support, rather than conflict with, the ongoing electricity market reform, and transition to low cost electricity. It would, in one move, unbundle transmission from generation and create the conditions necessary for an efficient electricity market reducing costs for Japan’s future electricity supply.
The experience is also relevant when considering restarting reactors, re-introducing the risks of further reactor accidents in Japan. Had Japan seen winds bringing more contamination over land – or even worse, in the direction of Tokyo – the financial consequences may not have been manageable by the government or the Japanese society by itself. This observation leads to the need to find market based solutions that will distribute costs globally. Here the idea of a compulsory insurance via catastrophe bonds appears as an option deserving further consideration.
The experience of Japan may prove valuable for consideration also in other nuclear countries. Though many of these are operating under different legislation and international conventions regarding liability for reactor accidents, the real magnitude of the economic consequences are often not understood by people within the democratic decision making processes in Europe or North America.
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