Nuclear power is the most cost-effective method of generating electricity, even when factoring in increased safety fees, accident compensation and other related expenses following the 2011 nuclear disaster, the industry ministry said.
Nuclear power is the most cost-effective method of generating electricity, even when factoring in increased safety fees, accident compensation and other related expenses following the 2011 nuclear disaster, the industry ministry said.
The government's new estimates were based on the assumption that the probability of a major nuclear disaster occurring has been reduced following the introduction of new safety screening standards, meaning that the costs of dealing with such accidents would be spread out.
A ministry report assessing electricity generation costs said nuclear power generation will cost a minimum of 10.1 yen (8.5 cents) per kilowatt hour in 2030. A 2011 analysis had estimated the minimum cost as 8.9 yen per kilowatt hour. Even so, nuclear power remains particularly cost-effective because the other methods, including renewable energy and thermal energy, have also risen in cost.
The report was released during an April 27 session of the ministry's Power Generation Cost Verification Working Group and approved in principle.
The ministry plans to use its analysis to draw up a proposal for Japan's energy mix for 2030, in which it plans to have 20 to 22 percent of the nation's electricity produced by nuclear power.
The latest assessment was to be presented at an expert panel meeting on April 28.
Using the same method as the 2011 analysis, the cost of nuclear power generation was determined by taking into account expenses such as compensation to be paid in the event of accidents, subsidies to municipalities in the vicinity of power plants. Increased safety fees were also taken into account this year.
However, the cost for dealing with nuclear disasters was reduced on the back of stricter safety standards that the government insists has cut the probability of large-scale accidents by half.
In the 2011 assessment, the minimum generation costs for 2030 for renewable energy sources, such as land and offshore wind turbines, had been below that of nuclear power plants at around 8.8 yen per kilowatt hour.
These power sources were estimated to be more costly in the latest report because fees to fund government research projects on renewable energy were also included as expenses.
Nuclear power, on the other hand, is relatively cheap only in the sense of its minimum cost, not taking into account that compensation and fees to deal with nuclear disasters could see exponential growth.
"Nuclear power plants will become a power source with high risks and high costs after the deregulation of the electric power industry," an industry expert said.