After six years of the Fukushima Dai-ichi Nuclear Power Plant accident, the situation in Japan’s nuclear power program is still very uncertain. Decommissioning of the Fukushima reactors are making slower progress than expected, and technical difficulties remain challenging. Recovery of contaminated areas and reconstruction of life of affected residents is also facing social-political problems. Loss of public trust is one of the major impacts of the Fukushima accident, and even after six years of the accident public trust has not been recovered. One of the main challenges is the economics of nuclear accident. Total costs of the Fukushima accident estimated by the government are now 22 trillion yen, but independent analysis suggests that total costs may reach 45–70 trillion yen. Therefore, competitiveness of nuclear power is very uncertain despite the claim made by the government that nuclear power is still the cheapest energy source among alternatives.

The Pacific Ocean earthquake and resulting tsunamis that struck the Tohoku District and Fukushima Daiichi and Daini nuclear power stations at 14:46 on 11 March 2011 (3/11) were followed by a nuclear accident unprecedented in both scale and timeframe. Since then, 3/11 has become a historic day for all nuclear experts to remember not only in Japan but also in the rest of the world. Although the earthquake occurred in 2011, the effects of the accident continue. About 60,000 evacuated residents in Fukushima still live in temporary housing and are uncertain as to when they will be able to return to their original hometowns. Although conditions at the Fukushima power stations have improved, it will take more than 40 years to remove melted fuel debris from the site and decommission the plant. We need to draw lessons based on the knowledge and information available to ensure the safety of existing nuclear facilities as much as possible and to understand possible implications for future nuclear energy policy. Especially, this paper discusses the economics of the Fukushima disaster, including the total estimated costs of the accident and revised cost estimate for newly constructed nuclear power plant compared with other alternative power sources.

According to the latest “Mid-long term” roadmap towards the decommissioning of Tokyo Electric Power Company (TEPCO)’s Fukushima Dai-ichi nuclear power station,Footnote 1 it delayed the first phase (removing spent fuel from the storage pools of Unit 1–3) by more than three years. TEPCO has been struggling with the management of with the management of a huge amount of contaminated water (roughly 400 tons per day) which is being stored and the amount of stored water is steadily increasing. And it is suspected that some contaminated water leaked into the sea. In order to contain the contaminated water, TEPCO and the Ministry of Economic Trade and Industry (METI) decided to install a so-called ‘frozen wall’ to stop water flowing in and out of the site. The wall is almost complete, but the Nuclear Regulatory Authority concluded that its effectiveness is limited and that alternative methods (such as pumping out underground and contaminated water) need to be continued [1].

Contaminated water is just one of the unprecedented challenges that TEPCO and METI face. The roadmap for decommissioning Fukushima Daiichi estimates that it will take at least 30–40 years to complete decommissioning. The first stage involves removal of the spent fuel from the pools in all four units (in two to three years), the second stage involves removal of the melted core debris from Units 1‒3 (in at least 10 years), and the third stage encompasses decontamination of the whole plant (in 30–40 years). Removal of spent fuel (1,331 spent fuel assemblies and 202 un-irradiated fuel assemblies) from Unit 4’s storage pool was successfully completed on 22 December 2014. Operations to remove spent fuel from Units 1‒3 are now underway. For removal of the melted cores, the information available on melted debris is very limited and no-one is sure where they are or what form they now take. It is not possible to get close to the reactor buildings of Units 1‒3 due to high radiation and it is necessary to develop remote control equipment or sophisticated, radiation-resistant robots.

However, there are still concerns about a lack of transparency and independent oversight in regard to the whole decommissioning process. The Japan Atomic Energy Commission (JAEC) recommended that the government should establish an independent (third party) organization with overseas experts as members to assess and audit the entire measures in order to maximize transparency [3]. However, such an independent organization has not been established by the government.

There are three different levels of evacuated zones designated by the government, depending on the level of monitored radiation levels: a ‘difficult-to-return’ zone (above 50 milli Sieverts (mSv) per year); a ‘preparation for return’ zone (below 50 mSv per year and above 20 mSv per year); and a ‘possible to return’ zone (below 20 mSv per year). Due to natural radiation decay and decontamination efforts, more areas are now designated as ‘possible to return’ zones. In June 2015, the government announced its policy to accelerate the recovery efforts in order to cancel the evacuation instructions over all the zones except the “difficult-to-return zones”. However, the criteria of 20 mSv per year has been a source of public debate as it is much higher than the 5 mSv per year level which was the evacuation criteria for the Chernobyl accident five years after that accident.

The issue of returning to the hometown is connected to the compensation issue. Under current rules, once the town is no longer considered as an evacuated zone, citizens are no longer eligible for compensation. More importantly, there is not enough public participation in the decision-making process which will lead to a loss of public trust, as discussed below. As a result, at the end of March 31, 2017, only 13.5% of the residents returned to the hometown, and roughly 20–40% of the evacuated people said that they would return home even after the zones are determined to be safe by the government [4].

Lack of trust is a fundamental problem that underlies the challenges facing Japan’s nuclear industry since the Fukushima disaster. The public has lost faith in nuclear safety regulation. Faith has not been fully restored even though a newly independent Nuclear Regulation Authority was established in 2012, and much tougher regulatory standards were introduced. According to poll results, the proportion of the public that want to shut down all nuclear power plants immediately increased from 13.3 per cent in June 2011 to 30.7 per cent in March 2013. The same polling data also suggested that about 80 per cent of the public still believed that serious nuclear accidents would occur again in Japan [5].

In polling undertaken in April 2015, the proportion of the public who oppose restarting the existing reactors rose to 70.8 per cent, an increase of 6 percentage points from previous polling on this question [6]. According to the poll conducted by the Japan Atomic Energy Relations Organization (JAERO 2016), it indicated that government agencies and nuclear industry organizations were considered to be the ‘most untrustworthy’ (24.2% and 24.6% respectively) organizations of those that were listed. This loss of trust is the most serious challenge that nuclear policymakers and the nuclear industry now face in Japan. Six years after the accident, it has not been addressed adequately.

On 11 April 2014, the new Strategic Energy Plan was adopted by the Japanese cabinet [7]. The plan stated that the government would not only decrease its dependence on nuclear energy as much as possible, but also that nuclear power should be used as an important base-load energy source and thus the necessary level of nuclear energy should be maintained. Based on the Strategic Energy Plan, the government set a target of nuclear power’s share in total electricity production at around 20–22% by 2030. In order to achieve this goal, electric utilities need to build new reactors replacing old and retiring nuclear power plants.

But, utilities need to get new operating license to meet newly established regulatory standards. As of end of September 2017, only 5 reactors are operating, 9 received the license, including Kashiwazaki-Kariwa, the first BWR and reactors owned by TEPCO, 12 are under licensing process, but still no action for the rest (18) reactors. Even if a reactor gets license, it is not clear when the reactor can be operated because utilities need an approval from local governments under the so-called “Safety Agreement” in which local governors have veto power on the operation of nuclear facilities. Safety Agreement is not a legally binding document, but it is politically essential to get governor’s approval before start operation. Due to lack of public trust described above, future of nuclear power program is thus not certain at all.

In May 2015, Ministry of Economy, Trade and Industry (METI) published the latest estimate of power generation costs for various power sources [8]. The cost estimate is for a hypothetical new plant. For a nuclear power plant, three new categories are added after the Fukushima accident. They are; (1) Additional safety costs, (2) Policy measures costs, and (3) Accident costs.

For additional safety costs, average expenditure of 24 nuclear reactors is about 100 billion yen per year. For the cost estimate, it is assumed that about 60% of the expenditure can be considered as “additional construction costs”. So, 60.1 billion yen/reactor was added to the construction cost, which is equivalent to 0.6 yen/kWh, considering 70% capacity factor, 40-year reactor life.

Policy measures costs include government expenditures on nuclear power, including R&D budget, taxes, and other budgetary items. METI used the figure of FY 2014 nuclear energy budget, and the total expenditure is about 345 billion yen/year, which can be translated into about 1.3 yen/kWh.

The most difficult cost estimate was Accident costs. Although the total costs of the Fukushima accident are still unknown, based on the information available then, METI used the figure of 12.2 trillion yen as a total accident costs (including decommissioning of the Fukushima reactors, compensations and decontamination costs). Then, METI estimated that possible accident cost for a typical nuclear plant would be 9.1 trillion yen per reactor. Since the actual frequency of severe accidents in Japan (about once in 2,000 reactor-years), METI assumed that the frequency of new reactor which passed tougher regulatory standards is only half of the past frequency, i.e. once in 4,000 reactor-years. Thus, the accident cost is now estimated to be 0.3 yen/kWh. (see below)

However, the total accident costs can be much higher. So METI added the following sentence to this accident cost estimate. If total accident cost increases by 1 trillion-yen, accident cost would increase 0.04 yen/kWh.

Based on those newly added cost estimates, total nuclear power generation cost is estimated to be 10.1 yen/kWh minimum. This is still competitive against other power generation sources such as coal (12.3 yen/kWh) and natural gas (13.7 yen/kWh).

But, as noted above, total accident costs are still unknown. In December 2016, TEPCO revised the total accident costs would be 22.2 trillion yen, double of previous estimate [9]. Comparing the previous cost estimate, decommissioning cost of Fukushima reactors increased from 2 trillion yen to 8 trillion-yen, compensation cost to 8.2 trillion yen from 5.0 trillion yen, and decontamination cost increased to 6.0 trillion yen from 4.0 trillion yen.

Still, these cost estimates may be underestimated. Japan Center for Economic Research, an independent economic think tank, published new estimates in 2017 [10]. According to their estimate, decommissioning cost could go up to 11.0 trillion yen to 32.0 trillion yen, including the final disposal costs of waste coming from the decommissioning and tritium treatment cost. Decontamination costs can also increase to 30 trillion yen, including the final waste disposal cost which is not included in the TEPCO’s estimate. So, the total accident cost can increase to about 50–70 trillion yen. JCER also estimated the total nuclear power generation costs to be about 15.0 yen/kWh, assuming the high capital cost based on US and European experience.

In short, cost of nuclear power generation is uncertain at best, and could be Therefore, competitiveness of nuclear power is very uncertain despite the claim made by the government that nuclear power is still the cheapest energy source among alternatives.

After six years of the Fukushima nuclear accident, the situation in Japan’s nuclear program is still very uncertain. The progress of decommissioning of Fukushima Dai-ichi reactors is slower than expected and its technical challenges are unprecedented. While except for “difficult-to-return area”, evacuation was cancelled, still about 60,000 people are living away from their home. Lack of trust in nuclear safety and in nuclear energy policy remains, and it is not clear when and how many reactors can be put back on line in the next decade. Finally, the total accident cost is still unknown, and it could reach up to 50 to 70 trillion yen. As a result, nuclear power’s competitiveness is not certain at all.