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Benefits of nuclear power generation should be shared more widely

The Yomiuri Shimbun It is desirable to make steady progress in reactivating nuclear power plants whose safety has been confirmed, thereby reducing electricity charges and improving the quality of related services.

Kansai Electric Power Co. will lower electricity rates on Aug. 1. To cover the costs for reducing power rates this fiscal year, the electricity firm has raised ¥41 billion through cuts in fuel costs that have been made possible by reactivating the Nos. 3 and 4 reactors at its Takahama nuclear power station, as well as ¥46.7 billion through other expenditure cuts.

The plan to reduce electricity rates entails an average 3.15 percent cut for ordinary households and a 4.9 percent reduction for corporations. This will lower electricity bills for standard families by ¥180 per month, and by a significant ¥200,000 for mid-size commercial facilities and factories. The economic advantage of reactivating nuclear power plants is significant.

The plan is the first full-scale electricity rate cut by a major utility firm since the Great East Japan Earthquake of 2011, besides a mechanism to automatically ensure that fluctuations in fuel prices are reflected in charges.

Kansai Electric aims to resume operations at the Nos. 3 and 4 reactors at its Oi nuclear power station from this autumn, with the two reactors clearing safety reviews by the Nuclear Regulation Authority. In that case, the scale of the firm’s rate reduction will be even greater.

Reactivating nuclear power plants contributes not only to cuts in power rates, but also to a stable supply of electricity. Seen from the standpoint of energy security, the present situation in electricity generation is precarious, as this country relies on imported fuel-dependent thermal power generation for 80 percent of its total electricity output. Given this, it is indispensable to smoothly reactivate nuclear power stations, a stable key source of electricity.

Competition is key

Regrettably, the two other power utilities of Shikoku Electric and Kyushu Electric — both of which had reactivated nuclear power plants prior to Kansai Electric — appear to be cautious about reducing their electricity charges. In particular, Kyushu Electric has said it will place priority on improving its financial strength, although the company has set its sights on reactivating the Genkai nuclear power facility this autumn or later, preceded by the reactivation of its Sendai station.

From the viewpoint of passing the benefits of its reactivation onto users, Kyushu Electric should positively consider reducing its power rates.

Delays in resuming operations at nuclear power plants have gone hand in hand with progress in the spread of renewable energy, consequently keeping electricity rates at a high level. This is because the current system for promoting electricity derived from renewable energy is designed to ensure electric power companies purchase such electricity from producers at certain prices, with the incurred costs covered through extra charges to electricity bills.

The decision to set the initial purchase price for electricity derived from renewable energy at an exceedingly high level — a measure intended to first and foremost promote renewable energy — has had a great effect on electricity charges. The share of the burden to be shouldered by each standard household is as high as ¥700 a month. One view holds that the figure will likely exceed ¥1,000 in fiscal 2030. The system needs to be further reconsidered.

The key to reducing burdens is to promote competition in the electricity market.

Due to the full liberalization of the electricity retail market in April last year, about 300 new corporate power suppliers have entered the market. However, only 5 percent of ordinary households have switched to such new power suppliers over the year following the liberalization. The main reason cited for this situation is because users cannot feel the impact of power rate reductions.

It is necessary to create a mechanism to enable new power suppliers to buy electricity generated by nuclear power plants at low costs.

(From The Yomiuri Shimbun, July 16, 2017)Speech



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