Dismantling Cost on New Energy Business

The government of Japan began to consider requiring new energy businesses payment for the cost of dismantling broken First Fukushima Nuclear Power Plant that is owned by Tokyo Electric Power Company, according to Mainichi Shimbun. While new energy businesses of solar, wind or other renewables have nothing to do with the catastrophe in Fukushima, the government looks conspiring to coerce the cost for the failure. It may also be a new version of barrier to entry.

Based on current rule for dismantling useless nuclear reactors in power plant, the cost for it is supposed to be paid by the owners of nuclear power plant from its income through appliance fee. Nine major power companies in Japan has been paying for the cost of dismantling the reactors in First Fukushima Plant, receiving subsidy from Atomic Power Compensation and Dismantling Supporting Organization through TEPCO.

New system considered is to demand other smaller companies for renewable energy accept the burden for dismantlement of nuclear reactors. After the disaster in Fukushima, many power companies entered into energy business to seek clearer power than nuclear or thermal. The government has been supporting them with new policy of liberalization of energy business. If the new system is introduced, it is possible for those new energy businesses to add the cost on their appliance fee. It is ordinary consumers who will be paying for dismantling the reactors of TEPCO.

The government estimates the whole cost of dismantling all the reactors in Japan and compensation for Fukushima accident to be ¥8 trillion. Monthly appliance fee for average family with parents and a child will be raised by ¥200. It is a significant contradiction in energy liberalization policy, which assumed cheaper price of electric power through competition between old and new power businesses.

It is natural that consumers choose new energy company that can supply cheaper electricity. That will deteriorate financial balance of major power companies so much that they no longer pay for the cost of dismantling nuclear reactors. It does not make sense to let new businesses take responsibility of inappropriate choice of energy source by major companies.

Japanese government has ungracefully been reluctant to determine entire cost of nuclear power generation, which can cause incredibly severe damage in an accident. As long as they depend on nuclear power, the people have to pay for its ever-swelling cost. They still do not like learning from past tragedies including atomic disaster in Hiroshima, Nagasaki and Fukushima.