Media Mix, Jan. 20, 2019

Rendering of the proposed nuclear power plant on Anglesey Island, Wales

Here’s this week’s Media Mix about remarks made by Hitachi’s chairman, Hiroaki Nakanishi, about the future of nuclear energy in Japan, and the world, for that matter. As pointed out at the beginning of the column, Nakanishi made the remarks mainly as the chairman of Keidanren, Japan’s main business lobby, though it was obvious that he was answering a specific question as the head of one of Japan’s biggest nuclear plant providers, or “vendors,” as he put it. The gist of his remarks was that the government needs to do more to make nuclear energy commercially viable, since it’s national policy, despite the fact that Hitachi itself was about to pull out of a big nuclear project in the UK due to the insurmountable costs involved. In a sense, the difficulty in getting assistance guarantees from the UK government for the project aligns with Hitachi’s annoyance with the Japanese government for not being able to convince the public that nuclear is the way to go. The central government has done little work to persuade the citizenry that nuclear is fine. Its safety plans since the Fukushima meltdown have been rather half-hearted, and accepted as such by people who currently live near nuclear plants, most of which remain offline. Obviously, the government doesn’t need the people’s “permission,” but it nevertheless seems sensitive to criticism, which it would prefer to ignore. Nakanishi may simply be giving lip service to the presumed will of the people with his remark that public opinion needs to be swayed, but he has that luxury as someone whose direct stake in the matter is not dependent on public opinion.

Hitachi’s concerns are completely of the financial sort. It is leaving the Anglesey Island nuclear reactor project in Wales because costs are too high, but despite the promise of some 9,000 jobs that would have been generated by the plant construction, local support wasn’t necessarily forthcoming and might have added more obstacles in terms of lawsuits and court costs. For one thing, the island is a bird sanctuary, and plant construction would have necessitated extensive landfill work. Much of the industry in the area is in agriculture, and reportedly farmers were united in their opposition to the plant. But even in terms of economics, the rationale for the plant has changed since Hitachi first became involved around 15 years ago. Originally, the UK’s energy policy was to increase its nuclear output from 9 gigawatts to 16 gigawatts by 2030, but since 2005 electricity consumption has decreased significantly and will continue to do so. At the same time, the cost of buying electricity from renewable sources has also decreased significantly, to about 57 pounds per megawatt/hour. In order for Hitachi to make money from the plant it’s building, the price of the electricity it sells would have to be at least 92 pounds per megawatt/hour. In addition, the UK’s committee on climate change says that the country can reach its CO2 reduction goals with the nuke plants it already has. It should be pointed out that Hitachi never really wanted to operate the plant it’s building, but was forced to do so since it couldn’t find a third party operator. Now that operations have become irrational, Hitachi has decided it’s not worth building. So, yes, without government support, the nuke business isn’t a business. The question remains: are the climate change advantages of nuclear beneficial enough for a government to completely subsidize it? In that regard, only socialist arrangements make nuclear power viable.

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