Closure Of Japanese Nuclear Plant Could Affect Toyota, Mitsubishi and Suzuki
Yesterday, Friday, the Japanese government ordered requested the shutdown of the Hamaoka nuclear power plant, 117 kilometers (73 miles) southwest of Tokyo. No accident had occurred, the measure was a precaution. The plant provided power to the Aichi prefecture where Toyota and many other industries are located.
According to The Nikkei [sub], “chronic power supply troubles threaten Toyota Motor Corp. and the other manufacturers that call the region home. At this point, Toyota has no idea what effect shutting down Hamaoka will have on its operations, a person familiar with the automaker said Friday.”
The plant’s owner, Chubu Electric, will build a seawall of at least 12 meters (39 feet) at Hamaoka. Construction will take until the end of fiscal 2013, about three years.
Currently, 32 of Japan’s 54 nuclear reactors are down. 11 shut down after the March 11 earthquake and tsunami. 21 had been down for inspections. It is now more than likely that these power plants will be down for years.
“Restarting an idle reactor requires the approval of the local community. The government’s abrupt decision regarding Hamaoka is bound to have a widespread impact on public sentiment,” The Nikkei writes.
Last month, Fukushima Governor Yuhei Sato said he will never allow Tokyo Electric Power Co. to resume operations at the Fukushima No. 1 nuclear plant.
With the closure of the Hamaoka plant, power problems reach the Aichi prefecture. So far, the area had been spared. Aichi is the major production hub for Toyota. Mitsubishi and Suzuki also have facilities in the region. Nuclear power plants in Japan are usually located by the sea, which provides the necessary cooling water. Although the government has said that no further shutdowns will be requested, protecting all plants from once-in-a-millennium tsunamis can set back power production for years.
Update: The power company held what The Nikkei [sub] called “an inconclusive board meeting Saturday on whether to suspend the Hamaoka nuclear power plant in Shizuoka Prefecture for safety reasons as requested by Prime Minister Naoto Kan.” The utility decided to continue the talks as ”the contents for consideration are extremely important, are diverse and will significantly impact many people.”
Note: I have changed my location to Tokyo yesterday night and will be reporting from here for the next 4 weeks. Radiation levels in Tokyo are nominal and do not warrant the hysterics in foreign media and blogs.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Um. No one power plant has direct effect on any one load as long as that load is part of a wider interconnection. As long as there is enough generation to meet the instantaneous load requirements of the interconnection this should have no impact on Toyota's ability to have their demand met. In other words, unless this area is still undergoing rolling blackouts due to a lack of generation, the loss of the plant doesn't matter. A very rough analogy to what this "story" implies is: "One of the six gas stations in my neighborhood will be shut down, therefore I can't drive my car" However, one could argue that shutting down nuclear reactors in Japan may cause the price of power to increase (as it must be replaced by more expensive generation), thus increasing Toyota's manufacturing costs. That would be an interesting and informative analysis to perform. As it stands this "story" is a non starter. I expect better TTAC.
Cost Should Scrub Nuclear Power ! The nuclear industry had succeeded in convincing the public and policymakers that nuclear power was a cheap and effective means to reduce global warming. However, when exposed to open scrutiny, the numbers just don't add up that way. Set aside its escalating, staggering cost trajectory, as for Japan, nuclear energy production costs must include these : Plus, the cost of waste disposal. Nobody is considering the cost of storing radioactive waste for 100,000 years. If that is considered, no electric company could make a go of nuclear power. Plus, the trillions worth of unlimited liability costs. (Tepco had no disaster insurance) Plus, massive costs to defend against tsunami including sea wall, new backup power. (Worse still, most nuclear reactors in Japan would fail to achieve a stable condition in the event that all regular power sources are lost, even though plant operators have prepared new backup power sources as well as electric generators amid the crisis at the Fukushima No. 1 nuclear plant, according to utility industry sources. The possibility of a failure to secure the safety of the reactors is because the backup power sources do not have enough capacity to operate all of the devices needed to keep the reactors cool. Many reactors still effectively have no alternative power source should emergency diesel generators fail to work, as was the case at the Fukushima plant after it was hit by a magnitude 9.0 earthquake and tsunami on March 11.) Plus, the added costs for new designs to require ever more stringent safety features. (The tremors that shook the Fukushima No. 1 nuclear power plant during the March 11 earthquake exceeded plant's quake-resistance standards, meaning that that quake-resistance measures currently in place at nuclear power plants throughout the country are insufficient.) Plus, huge lobbying costs for politicians, academies, media... Plus, in exchange, huge subsidies for nuclear industry from the govt. Plus, subsidies for hosting the nuclear plant. Plus, Nuclear’s history of cost overruns. Another major business risk is nuclear’s history of construction delays. Delays would run costs higher. No nuclear plant has ever been completed on budget. Plus, the cost of eye-popping costs for transmission upgrades. For instance, Florida Progress will require $3 billion in transmission upgrades to accommodate its new nuclear plants. Plus, the waste of premise : Time to build the plant, 6-8 years. Time to completely depreciate the plant: 20 years. In the U.S., power purchase agreements for wind power are currently averaging 4.5 to 7.5 cents a kilowatt hour, including the federal wind tax credit, but, the generation costs for power from new nuclear plants stand at from 25 to 30 cents per kilowatt-hour —triple current U.S. electricity rates! It might be worth noting that worldwide, there is not a single private investment in a nuclear power plant. No private investor wants to put his money into nuclear energy! ( at least as of 12 September, 2008) Why? Simply because the risks are too high and the return on investment is much too low.