With the restart of Unit 2 of the Onagawa Nuclear Power Plant (Onagawa Town, Miyagi Prefecture, Ishinomaki City) on the 29th, Tohoku Electric Power Co. aims to reduce fuel costs for thermal power generation, such as liquefied natural gas (LNG) and coal, by approximately 60 billion yen per year in fiscal 2025. It looks like it will be possible. Restarting nuclear power plants will not only reduce the burden of fuel costs and have a positive impact on profits, but will also be a tailwind for business improvements, such as providing a stable supply of electricity and contributing to decarbonization.
In preparation for restarting operations, a variety of safety measures have been implemented, including construction of a seawall and installation of firebreaks, as well as a “specified serious accident response facility” in preparation for terrorist acts. The total cost, amounting to 710 billion yen, will be recorded as depreciation expense of approximately 3 billion yen per month for a certain period of time after restarting operations.
On the other hand, it is estimated that the effect of reducing thermal power fuel by restarting operations will be 7 billion yen per month, and if operations go smoothly, it is expected that investment costs will be recovered and profits will continue to improve.
Additionally, restarting operations will reduce greenhouse gas emissions by 3 million tons per year. This is equivalent to approximately 1.1 million ordinary households, and is said to exceed the number of households in Miyagi Prefecture (approximately 1.05 million households).
Electric power companies have been delayed in restarting nuclear power plants, and while thermal power generation accounts for the majority of power sources, their business performance continues to be unstable due to volatile fluctuations in fuel prices.
Under these circumstances, Kansai Electric Power, which has restarted all seven operable nuclear power plants, has the highest profit level among the major electric power companies and has set electricity rates at low prices. Daiwa Securities Equity Research says that “the impact of restarting will be quite large.” Shusaku Nishikawa, senior analyst at the department, points out.
However, in anticipation of restarting operations, Tohoku Electric Power Co. has already implemented a reduction of approximately 150 yen per month on electricity charges for standard households (contracted current of 30 amperes, power consumption of 260 kilowatt hours) in June 2023. No further price reductions are planned. The earnings forecast for the fiscal year ending March 31, 2025 has already factored in the improvement in earnings, but the restart as scheduled has increased the probability that we will be able to achieve our earnings plan for this fiscal year. There is room for earnings to improve,” Nishikawa said. (Hiroyuki Manpuku)
Source: Japanese