Japan utilities rise as PM calls for restarting nuclear reactors

PRIME Minister Fumio Kishida’s new push to restart nuclear reactors probably won’t be enough to avert a looming power crunch later this year that will bring new risks of blackouts.

Kishida has said the government will do what it can to ensure as many as nine reactors are online this winter, which could cover roughly 10 per cent of Japan’s power consumption. The news sent shares of local utility firms jumping.

Still, Kishida’s pledge is in line with existing plans and Japan is forecasting tight power supply this winter - when demand for heating will rise - even with the nine reactors online.

“Things won’t change drastically even if nine reactors are operated,” said Takayuki Homma, chief economist at Sumitomo Corp Global Research Co. “Electricity will remain in shortage. If Japan tries to secure a stable energy supply, it must raise the proportion of nuclear power generation.”　

Japan has been struggling with power supplies amid extreme weather, forcing the government to ask citizens in Tokyo to conserve electricity to avoid blackouts. The nation’s capital has seen two major power crunches this year, including during the worst heatwave for the end of June in more than a century.  

Ten of Japan’s 33 operable nuclear reactors had been restarted under post-Fukushima disaster safety rules, though some are currently offline for maintenance. A further seven units have been cleared by the nation’s nuclear regulator to resume operations, but haven’t yet restarted due to required upgrades or lack of local support.

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Japan will “steadily proceed” with plans to have the nine reactors online to help meet higher winter demand, while prioritising safety, Trade Minister Koichi Hagiuda said Friday (Jul 15). Five of the nine are currently online, he said.

In Tokyo trading on Friday, Hokkaido Electric Power advanced as much as 4.5 per cent. Shikoku Electric Power and Hokuriku Electric Power rose more than 2.2 per cent. BLOOMBERG