Tokyo Electric Delays Nuclear Plants After Cover-Up

Tokyo Electric Power Co. will delay completion of a nuclear power plant, after admitting covering up an accident, the latest blow to public confidence in the industry and Japan's efforts to expand atomic power output.

Asia's biggest utility will postpone the commissioning of Fukushima Daiichi's seventh and eighth reactors until October 2013 and 2014, a year later than planned, according to a document obtained by Bloomberg. The company, which disclosed safety lapses after the trade minister imposed an ultimatum, will announce the delays later today when it presents a business plan.

Nuclear projects face resistance from communities after Tokyo Electric and other utilities said they falsified safety data more than 200 times and covered up incidents. Japan, which buys 89 percent of its oil from the Middle East, wants new reactors to meet its commitments to cut carbon dioxide emissions from fossil fuels and curb the cost of energy imports.

``I was too shocked for words'' after hearing the company may have hidden the accident, Yuhei Sato, governor of Fukushima prefecture, said on NHK television on March 22. ``Tokyo Electric can't restore trust without keeping its pledge on safety.''

A slowdown in the expansion of nuclear power in Japan, the third-largest atomic generator after the U.S. and France, may boost the development of other energy sources. Yesterday, Chubu Electric, Japan's third-largest power producer, said it will spend 228 billion yen ($1.9 billion) to build wind plants and gas-fired generators.

Shutdowns, Inspections

Tokyo Electric shut all of its 17 reactors in 2002 after admitting that employees had falsified nuclear safety documents since the late 1980s. The government ordered inspections at most of its plants. The company hid faults in cooling pipes and outer casings in 12 of its reactors.

Japan had its worst lethal nuclear accident in August 2004 when five people were killed as steam burst from a ruptured pipe at Kansai Electric Power Co.'s reactor. In September 1999, two workers of JCO Co., a unit of Sumitomo Metal Mining Co., were killed by radiation during atomic fuel manufacturing.

Tokyo Electric President Tsunehisa Katsumata apologized on March 23, a day after his company said a critical accident may have occurred at a nuclear reactor in 1978. It found more than 200 cases of data falsifications at its three atomic power stations, the company said on March 1.

``We are very sorry for the incidents that deeply hurt public trust,'' Katsumata said. ``We will work to restore confidence.''

Shares Fall

Tokyo Electric shares fell 2.65 percent to 4,040 yen at 2:08 p.m. on the Tokyo Stock Exchange. The stock has risen 4.9 percent this year, compared with a 6.1 percent advance in the Topix Electric Power & Gas index.

The safety breaches may make it harder for Tokyo Electric to gain support from Fukushima prefecture to build two more reactors there.

``With the recent incidents, utilities need to put more effort into persuading local people'' that nuclear power is safe, Toshinori Ito, a senior energy analyst at UBS Securities Japan Ltd., said by phone. ``Approvals from municipalities are the top priority for the nuclear power industry.''

In 1978, an unexpected nuclear chain reaction may have occurred at Fukushima Daiichi power station's No. 3 reactor in Fukushima prefecture, which hosts 10 of Tokyo Electric's 17 reactors. Tokyo Electric didn't report the accident because it wasn't required under the law at that time.

`Nuclear Country'

Tokyo Electric operates about a third of Japan's total nuclear capacity. The reactors are at three nuclear power stations: the Fukushima-Daiichi and Fukushima-Daini plants in Fukushima prefecture, north of Tokyo, and Kashiwazaki Kariwa in the central Niigata prefecture.

``Japan is a country without resources, so nuclear power is extremely important,'' said Fujio Mitarai, chairman of Keidanren, a lobby group for the country's biggest companies. ``It's a very important industry, so they absolutely must do everything possible to ensure safety and win back public trust.''

Japan wants to increase the share of atomic energy in electricity generation to 40 percent by 2030. Today, Japan's 55 reactors generate about 30 percent of the total.

By March 2016, nine more reactors are scheduled to be built in Japan, with one to shut, boosting the total to 63 with a capacity of 61.5 million kilowatts, from 49.6 million today, the trade ministry said in March of last year.

To promote nuclear energy, Trade Minister Amari Akira last year ordered utilities to investigate and reveal all past cases of fabrication and improper operations at nuclear power plants by the end of March.

``This is a process to squeeze all the pus piled up in the past and to make Japan's atomic industry the safest and most reliable in the world,'' Amari said on March 23.

source:www.bloomberg.com