Japanese nuclear power firms in talks over alliance: source

Tokyo

FOUR of Japan's biggest nuclear operators and plant builders have started talks on a potential partnership in atomic energy, as the sector struggles to reboot in the wake of the Fukushima disaster seven years ago, a source said on Wednesday.

Tokyo Electric Power Company Holdings Inc (Tepco), Hitachi Ltd, Toshiba and Chubu Electric Power Co Inc have signed an initial agreement that will be fleshed out in discussions, the source told Reuters. He declined to be identified as he was not authorised to speak with media.

The Nikkei newspaper earlier reported the companies had begun talks on an alliance that would initially focus on decommissioning old reactors. That could be extended to building and maintaining nuclear plants, with the moves likely to spur a broad realignment in Japan's nuclear industry, the Nikkei reported.

"It makes sense in the domestic arena to cooperate. Four balance sheets is better than one when it comes to nuclear risks," said Tom O'Sullivan, the founder of energy consultancy Mathyos Japan.

When contacted by Reuters, all four companies said they had regular discussions with each other as well as with other nuclear operators and builders. Hitachi denied the details included in the Nikkei report on plans for decommissioning and the building of new reactors.

Japan's nuclear sector provided about 30 per cent of the country's electricity supply before a tsunami and earthquake caused reactor fuel meltdowns at Tepco's Fukushima Daiichi station in March 2011.

The disaster highlighted regulator and industry failings and turned swathes of the public against nuclear power, with all reactors needing to be relicensed by a new regulator to meet tougher safety standards.

While nine reactors have been restarted, utilities have had to spend billions of dollars on upgrades and alternative fuel supplies to produce electricity in the world's third-biggest economy. That has led to calls for the government to take over nuclear operations and reorganise an industry that has 10 atomic power operators.

Japan's powerful Ministry of Economy, Trade and Industry (METI) supports the partnership plans, the Nikkei report said, quoting an unidentified official saying: "it is now impossible for a private company to be in the business by itself."

An official at METI declined to comment on talks between private companies and denied it was leading the moves, when contacted by Reuters, declining to be identified.

The shake-up in Japan's energy industry sparked by Fukushima has already led to Tepco and Chubu merging their fossil fuel power businesses under a venture called JERA that is due to complete the takeover of their coal, gas and oil generation assets in April next year.

Tepco and Chubu, two of Japan's biggest three utilities, have yet to restart any nuclear units and are meeting strong resistance from local populations to any restarts. The utilities both use the same basic boiling water reactor technology supplied by Toshiba and Hitachi, which built all their nuclear units. REUTERS