the cost of nuclear energy to levels on par with those for energy produced by thermal power plants, a development that is likely to prompt the government to seek a fine balance between costs, stable supply and environmental factors in formulating the country's new energy policy.

Fukushima crisis raises nuclear energy costs to level on par with thermal power generation

In this March 11, 2011 photo released Monday, April 11, 2011 by Tokyo Electric Power Co.,(TEPCO), the access road at the compound of the Fukushima Dai-ichi nuclear power plant is flooded as tsunami hit the facility following a massive earthquake in Okuma town, Fukushima Prefecture, northeastern Japan. (AP Photo/Tokyo Electric Power Co.,)

The disaster at the Fukushima No. 1 Nuclear Power Plant is expected to boost the cost of nuclear energy to levels on par with those for energy produced by thermal power plants, a development that is likely to prompt the government to seek a fine balance between costs, stable supply and environmental factors in formulating the country's new energy policy.

The government's cost-examining panel unveiled its preliminary calculations of energy costs on Dec. 6. It estimated the cost of the nuclear disaster at the Fukushima nuclear plant at 0.5 yen per kilowatt-hour. If government subsidies for municipalities hosting nuclear power plants and related facilities are included, the cost of nuclear energy, which had heretofore been deemed the lowest, is likely to be about the same as that of energy produced by thermal power plants.

As for thermal power generation, meanwhile, fuel costs are expected to rise and more greenhouse gases will be produced. Renewable energy is still relatively expensive and there is no guarantee that it will become a key source of energy needed to ensure stable energy supply. Such being the case, the government must secure a composition of energy sources that is well balanced between cost, stable supply and environmental factors.

The cost-examining panel started to review energy costs in October. It is to meet on Dec. 13 again to unveil the cost of generating various types of energy over the next 30 years, factoring in fluctuations in fuel costs over time.

In addition to the cost of the disaster at the Fukushima nuclear power plant, government funds covering subsidies for municipalities that host nuclear power plants and related facilities will exceed 1 yen per kilowatt-hour, and construction costs and additional costs for safety measures will further boost the total cost of nuclear energy. If cost of covering measures taken in response to the Fukushima nuclear crisis were to become greater than originally anticipated, the cost of nuclear energy will increase further accordingly. The cost of generating nuclear energy is estimated at 5 to 6 yen per kilowatt-hour at present, but it is likely to rise to about 10 yen, a government source says.

The cost-examining panel, meanwhile, expects the prices of oil and coal to rise in line with increasing energy consumption in emerging economies. The panel intends to take into account costs of reducing green house gas emissions. Therefore, the cost of energy produced by thermal power plants using coal or liquefied natural gas (LNG) could rise to about 10 yen per kilowatt-hour, while energy produced by oil-fired power plants could nearly double the current cost, which is between 14 and 17 yen per kilowatt-hour.

In this March 15, 2011 photo released by Tokyo Electric Power Co., smoke rises from the badly damaged Unit 3 reactor, left, next to the Unit 4 reactor covered by an outer wall at the Fukushima No. 1 nuclear complex in Okuma, northeastern Japan. (AP Photo/Tokyo Electric Power Co.)

The costs of renewable energy -- 37 to 46 yen per kilowatt-hour for solar power and 11 to 26 yen for wind power -- are expected to be reduced through technological development and mass production, but they will still be higher than those of energy produced by nuclear power plants and thermal power plants. For renewable energy to become widely used, next-generation systems of energy transmission and distribution as well as batteries must be developed to make up for the unstable output of solar and wind power.

The government is to finish examining costs of energy by the end of this year and will try to review the country's energy policy by summer next year.

(Mainichi Japan) December 7, 2011