Japan’s nuclear regulator outlines restart process
Japan's Nuclear Regulation Authority (NRA) has started to assess applications from four electricity utilities to restart a total of 10 idled rectors, after a new nuclear safety regime came into operation on 8 July.
Japan is by far the biggest importer of 6,000Kcal/kg NAR coal from Australia's free-on-board (FOB) Newcastle market, mostly through long-term contracts. The potential return - or not - of nuclear generation in Japan could have an impact on coal imports, even if Japanese utilities actually imported less coal in 2011 and 2012 than in 2010, despite the Fukushima incident.
But the start-up of a number of coal-fired plants that were switched off because of the earthquake and tsunami that hit Japan in March 2011 has boosted imports. Over the first five months of 2013, Japanese utilities bought 8.8% more coal than the same period in 2012, the latest data from the Federation of Electric Power Companies (FEPC) of Japan shows. The increase in coal imports has been supplemented by some Japanese utilities buying on the FOB Newcastle spot market, trading sources said.
The requests for inspection under the new safety norms came from Shikoku Electric Power, Kyushu Electric Power, Kansai Electric Power and Hokkaido Electric Power, the NRA spokesman confirmed.
The application is the first step in the restart process, and although the timeline for final approval is dependent on local government approval, the NRA spokesman said the agency would require around six months to review each application.
This raises the prospect that Japan will once again be left without nuclear power once Kansai Electric's Ohi No .3 and No. 4 nuclear units - the only two of the country's 50 reactors that are currently in operation - are taken off line for scheduled maintenance on 15 September.
The restart process will also be influenced by the resources the NRA can dedicate to the inspection process. The spokesperson confirmed that the agency currently has three teams that can perform the safety inspection at any one time, as well as one team to assess whether the reactors comply with the new earthquake and tsunami safety guidelines.
The NRA does not prioritise some reactors over others, and could potentially designate the three teams at the utilities which have applied so far, according to the spokesman.
Although overall coal imports are expected to remain close to or slightly above 2012 levels until the reactors start to come back on line, market participants said uncertainty over the restart timetable poses a procurement dilemma for the upcoming winter season for those utilities - such as Kansai Electric and Kyushu Electric - that have submitted their applications to the NRA.
Kansai Electric is seeking safety checks for Ohi reactors 3 and 4 - each with a capacity of 1.18GW - and the 870MW No.3 and 870MW No.4 reactor at its nearby Takahama facility.
Kyushu Electric has applied for an inspection of its No.1 and No.2 units at its Sendai plant, each with a capacity of 890MW. The company spokesman said it will also submit an application for the 1.18GW No.3 and 1.18GW No.4 reactors at its Genkai plant on 12 July.
Meanwhile, Hokkaido Electric is seeking inspections for three reactors at its Tomari plant - the No.1 and No.2 units, each with a capacity of 579MW, and the 912MW No.3 unit. Shikoku Electric is seeking a restart for its 890MW No.3 unit at its Ikata plant.
TEPCO yet to submit application
Tokyo Electric Power (TEPCO) was touted to be one of the early applicants, and in an effort to bolster its finances the utility was thought to be seeking a restart of the 1.36GW No.6 and 1.36GW No.7 reactors at its Kashiwazaki-Kariwa plant.
TEPCO has already invested heavily in an effort to make the plant compliant with the new safety requirements, constructing 15m high tsunami prevention sea walls, as well as vented filtrations systems. The utility has yet to apply, however, and the company's efforts to restart the units have faced some opposition from governor of Niigata, who has indicated that the company should complete its investigations at the crippled Fukushima Daiichi plant before turning its attentions to Kashiwazaki-Kariwa.
In addition to NRA approval, the four utilities will need to secure local government approval to restart. Around half of Japan's prefecture and local government heads have indicated that they would authorise a restart once they have been approved by the NRA, and the restart timetable could be hastened should the ruling Japan Democratic Party muster a large majority in the 21 July upper house elections, according to Mycle Schneider, an independent nuclear energy consultant.
"However, the local governments and municipalities could still resist the move to accelerate restarts, impeding the whole process. I don't expect a large number of reactors to come on line even by end of next year," he said.
US investment bank Goldman Sachs has forecast that as many as 14 nuclear reactors could restart over the course of 2014, leading to a year-on-year increase in nuclear power generation of around 10.6GW.
"If that increase was solely replacing gas-fired capacity it would be equivalent to a drop of about 16 billion cubic metres (bcm)/year in natural gas consumption. However, since residual fuel and crude oil consumption also rose sharply in response to the nuclear crisis in Japan, and given that petroleum fuels are more expensive than LNG, we expect a decline in oil-fired generation to ultimately moderate the decline in LNG consumption in 2014," the bank said in a 8 July briefing note.
However, if the predicted 10.6GW of capacity was to return, Japanese utilities might look to reduce coal burn from current levels as well. Surabhi Sahu and Fionn O'Raghallaigh
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