Japan’s government is close to finalising a draft plan to rescue Tokyo Electric Power, operator of the crippled Fukushima nuclear plant, as the utility braces for tens of billions of dollars in compensation claims, reports the FT. Masataka Shimizu, Tepco president, on Tuesday made the first formal request for state aid since the plant was struck by the March 11 earthquake and tsunami. JPMorgan estimates Tepco could face Y2,000bn ($24.8bn) in compensation claims, while the Asahi newspaper has reported the figure could be Y4,000bn. The WSJ adds that Prime Minister Naoto Kan said on Tuesday that Japan should draw up a new long-term energy policy, dropping plans to get half its energy needs from nuclear power and instead turning to renewable sources. Read more
Just as anxious, sleep-deprived and quake-traumatised eastern Japan was beginning to relax – just a little: a fresh earthquake struck the already ravaged region of Tohoku and rocked Tokyo at 11:32pm local time, triggering fears of another tsunami and more problems at the crippled Fukushima nuclear power plant.
The 7.4 magnitude earthquake (quickly downgraded by the US Geological Survey to 7.1 but maintained at 7.4 by Japan’s Meteorological Agency, for what that’s worth), hit the northeast coast, close to the city of Sendai, which on March 11 had seen its airport engulfed by surging water from the tsunami. Read more
Tokyo Electric Power said on Wednesday it had managed to stop the outflow of highly radioactive water into the Pacific Ocean from the crippled Fukushima Daiichi nuclear power plant, reports the FT. After several failures to stem the leaks using different methods, the flow of material was halted with the injection of sodium silicate, a chemical used as a wood preservative and an adhesive in car engines and another substance, Tepco said. Despite its success, Tepco saw its shares slide further on Wednesday morning, down about 10% at Y325. The utility pumped 1,500 litres of the combination into an area near a seaside pit where the highly radioactive water had been seeping through, it was reported early on Wednesday morning. A total of 11,500 tonnes of moderately radioactive water was released from the plant on Monday into the sea. Read more
Japanese nuclear technicians began releasing moderately radioactive water into the sea from Fukushima Daiichi nuclear station on Monday to create room to store more highly contaminated water building up under the crippled plant, reports the FT. A manager at Tepco, the station’s operator, broke into tears while announcing the emergency measure on Monday, and apologised for their impact on communities near the plant, 240km north of Tokyo. Bloomberg adds that Tepco shares plunged a further 15% in Tuesday intraday trading, to their lowest level since listing in 1951 after Tepco began discharging 11,500 tons of contaminated water into the sea on Monday; meanwhile, radioactive iodine and cesium were found in fish caught in waters near the plant. Read more
The latest kerfuffle about the future of Tokyo Electric Power Co, the power provider and operator of Japan’s crippled Fukushima nuclear power plant, began quietly enough, with a small report in the Mainichi Daily newspaper, claiming the Japanese government was considering taking a stake of up to 50 per cent in the utility.
The report cited an unamed government official saying the government was considering taking a stake as public funds may be necessary to ensure Tepco can supply electricity to Tokyo in the summer and also pay compensation to companies and individuals hit by the nuclear plant crisis. Any stake would not exceed 50 per cent and the government may also offer a loan guarantee, the offical added. Read more
Japan’s government plans to take control of Tokyo Electric Power Co, the operator of the stricken Fukushima nuclear power plant, by injecting public funds, reports Reuters, citing the Mainichi newspaper. But the government is unlikely to take more than a 50% stake in the company, an unnamed government official was quoted as saying. Earlier, Japan’s chief cabinet secretary Yukio Edano told the FT it would “take years” to fully stabilise the crippled nuclear plant but said the government hoped within weeks to stem the leakage of radiation. Workers are battling to contain radioactive leaks from the plant amid signs that radioactive material may be continuously leaking into the sea. Read more
The utility company at the heart of the worst nuclear accident in 25 years said on Wednesday it would ask the Japanese government for financial support as it faces a prolonged battle to contain radiation leaks from the stricken Fukushima nuclear power plant, reports the FT. It was the first time since the March 11 earthquake and tsunami that Tokyo Electric Power had indicated it might not be able to fund the cost of the crisis on its own. Last week the company raised $25bn from three of Japan’s largest banks while saying it had “sufficient liquidity”. Engineers estimate that the Fukushima plant’s four stricken nuclear reactors will require three decades and $12bn to decommission, says Bloomberg. Tepco shares slid another 17% overnight as the company revealed its CEO is now hospitalised, and speculation continued that government will nationalise it, the FT adds. Read more
Shares in Tokyo Electric Power fell 19% on Tuesday amid growing speculation that the operator of Japan’s crippled Fukushima Daiichi nuclear power plant could be nationalised, reports the FT. Public anger and potentially huge liability claims stemming from the worst nuclear crisis in 25 years have fuelled speculation the government could take over the utility. Koichiro Gemba, Japan’s national policy minister, suggested on Tuesday that nationalisation was an option. The Yomiuri, Japan’s biggest daily newspaper, earlier reported Tokyo was considering taking a majority stake in the company. The plunge in Tepco’s stock price would not immediately endanger the company’s survival, adds the NYT, although its cost of capital is tied to its share price. But, notes the WSJ, the options at Tepco’s stricken nuclear plant are now a “calculated choice between bad and worse”. Read more
A new phase in Tepco’s “BP moment”: just like the whirlpool created by the massive tsunami after the March 11 earthquake, Japan’s biggest electricity provider and operator of the crippled Fukushima nuclear power plant is dragging peers into its own troubled vortex.
Investors’ attitudes to Japan’s other utilities have not been nearly as severe as the scare that has driven Tepco’s share price down 73 per cent since March 11, and further widened its CDS spreads on Monday by 143bps to 473bps (amid fears, as Markit’s Gavan Nolan remarked, that the company “is losing control of the situation”). But it’s still a very worrying sign for anybody involved in Japan’s nuclear power industry. Read more
Japan moved on Friday to widen the exclusion zone around its crippled Fukushima nuclear power station, advising residents in a 20-30km band around the plant to leave the area and telling them to prepare for a possible mandatory evacuation, reports the FT. Yukio Edano, chief cabinet secretary, cited the increasingly difficult living conditions inside the band, where for nearly two weeks people have ordered to stay inside. Keeping the area supplied with food and water – an operation carried out largely by military personnel – is diverting resources from emergency efforts elsewhere, he added. Radiation exceeding legal limits has already been detected in food and water in areas outside the evacuation zone. The US has advised its nationals to stay at least 80km from the plant. Two workers were moved to a radiation treatment centre near Tokyo on Friday, authorities said. Earlier, the FT reported that emergency crews resumed work at the power station on Thursday after smoke cleared from its No 3 reactor, prompting authorities to lift an evacuation order issued a day earlier. Read more
Japan faces a further crisis amid escalating concerns about radioactive contamination of its food and water, even as the fight to stabilise the earthquake-stricken Fukushima Daiichi nuclear plant appeared on Monday to be making progress, reports the FT. Tests found levels of radioactive iodine up to seven times the legal limit in samples of raw milk, spinach and leaf vegetables as far away from the nuclear plant as Chiba prefecture, to the east of Tokyo. The results mean Japan faces a food safety scare on top of the earthquake, tsunami and nuclear crisis. Almost 300 engineers have been battling to bring six reactors under control at the plant, 240km north of Tokyo, since their cooling systems were knocked out 10 days ago by the tsunami. Meanwhile the IAEA, the UN atomic watchdog, said on Sunday there had been some positive developments at the Fukushima plant though the overall situation remained “very serious”. Bloomberg has the latest details. Read more
“Let them eat (radioactive) spinach….”
Further to our earlier ‘view from the ground’ in Tokyo, here’s an update of the situation on Sunday night: Read more
It’s a worse-case scenario — Japan’s “slow motion” Chernobyl.
Beijing announced on Wednesday that it had suspended approval for nuclear power plants across the country, putting the brakes on a development programme that accounts for almost 40 per cent of the world’s planned reactors, says the FT. The decision, both unexpected and uncharacteristic of a government that usually races ahead with ambitious infrastructure projects, was taken in response to the Japanese nuclear crisis triggered by last week’s devastating earthquake and tsunami. BNET noted earlier that more than 25 reactors are already under construction in China. Read more
Japan is facing an increasingly desperate battle against time to cool down overheated reactors at a crippled atomic plant, the defence minister has warned, as fears about a major nuclear accident spread across the nation, the FT reports. Japanese military helicopters dropped water over the Fukushima atomic power station’s No 3 reactor building in the latest effort to avert a major nuclear accident. Meanwhile, Reuters says the US is urging citizens to leave Japan and has chartered evacuation aircraft. Read more
Here’s a useful breakdown of who pays for what after Japan’s massive earthquake:
Which might help explain (some) of why Japanese government bonds are sliding on Wednesday. Japanese insurers could well be selling some of their bonds to help cover losses in their stock portfolios, just as the outlook for Japan’s finances might worsen. Read more
Japanese nuclear technicians were forced back from parts of a stricken nuclear power station on Wednesday as fresh problems arose and radiation levels spiked again, in signs that the emergency was not being contained, the FT reports. Tokyo Electric Power has ordered its remaining staff to move away temporarily from reactors inside the plant after radiation levels jumped at about 10am Japan time. Roubini Global Economics adds that the Fukushima crisis is likely to be upgraded from a level 4 to a 5 on the International Nuclear and Radiological Event Scale. See also Barclays’ nuclear primer. Read more
Here’s a nice piece of research from Barclays Capital.
The UK bank has enlisted the help of a former nuclear safety employee to discuss events at Fukushima Daiichi, the Japanese nuclear plant hovering on the edge of meltdown. For what it’s worth, BarCap’s energy team doesn’t think there was an operator error at the plant — the force of the earthquake combined with the effect of the tsunami “simply exceeded what the plant was designed to withstand.” Read more
Japan appears to be losing control of its nuclear crisis after fresh explosions at an atomic plant north of Tokyo released more radiation into the air, prompting the prime minister to appeal for calm, the FT reports. Earlier in the day, Mr Kan lambasted Tokyo Electric Power (Tepco), the nuclear plant’s operator, for its handling of the crisis. Mr Kan said the power company had been slow to report the initial cascade of system failures stating with reactor No 1 and containment problems at the site. FT Alphaville adds that a spent fuel leakage has been confirmed at Fukushima Daiichi plant Read more
Japanese nuclear authorities evacuated non-essential personnel from a crippled nuclear power station on Monday, reports the FT. An apparent explosion damaged part of the protective shielding on one of its overheated reactors, creating the risk of a more serious radiation leak. The damage occurred in part of the Fukushima Daiichi facility’s No 2 reactor known as the suppression chamber, which was believed to have been filled with contaminated water and air. The extent of the damage was unclear but elevated radiation levels were detected in the area immediately around the station. The reactor’s innermost core, which holds its fuel, was said to be intact. In a national address, Japan’s Prime Minister, Naoto Kan, said that “high levels of radioactivity” could be released into the air and the risk of radioactive leakage was increasing, reports Reuters. In spite of rising concern, another Chernobyl is highly unlikely, according to experts interviewed by the FT. Read more
With Japan’s nuclear crisis still uncertain, analysts on Monday began to tentatively assess the potential read across to sectors, companies and funds in the US.
Research reports from Citi and Credit Suisse both look at risks to the nuclear sector from fears of a seismic disaster in the US and from increased regulatory and/or public scrutiny. Read more
Fukushima Daiichi has now become the focus of Japan’s earthquake fallout.
So far authorities have been at pains to point out that the nuclear plant, owned by Tepco, will not be the next Chernobyl. The primary containment area of the reactor remained intact — even if the secondary containment was broken apart by Saturday’s explosion. Here’s a pic from CreditSights to give you an idea: Read more
An explosion rocked Japan’s Fukushima Daiichi nuclear plant on Monday, hours after the US navy began moving ships away from the area as the emergency escalated at the earthquake-damaged power station north of Tokyo, the FT says. The blast, captured by television cameras, occurred at the plant’s No. 3 reactor building, according to Tokyo Electric Power, the operator. Tepco engineers have been struggling since Friday’s quake to cool the overheated cores of three reactors at the site. Meanwhile, Japan’s nuclear worries have sparked a worldwide debate about the use of the energy type. Read more
An explosion rocked Japan’s earthquake-damaged Fukushima Daiichi nuclear plant on Monday, intensifying the emergency at the 40-year-old power plant 260km north of Tokyo after Friday’s 8.9-magnitude earthquake devastated northern Japan, reports the FT. The blast, captured by TV cameras, appeared to have occurred at the plant’s No. 3 reactor building, where combustible hydrogen had been building up after gas was vented from inside the reactor. Tepco, the plant’s operator, said the reactor’s protective containment shell remained intact after the blast. A similar explosion destroyed part of the plant’s No. 1 reactor building on Saturday. Monday’s blast, around 11am local time, seemed more powerful, and injured a total of 11 workers. Earlier, the FT reported that Naoto Kan, prime minister, said Japan was facing “its worst crisis since the second world war” as it became apparent that the death toll from Friday’s quake and tsunami could reach tens of thousands. Read more