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Fukushima cleanup to cost 21.5 trillion yen, double original estimate

The cost of dealing with the aftermath of the disaster at the Fukushima No. 1 Nuclear Power Plant will reach 21.5 trillion yen, roughly double the government's initial prediction of 11 trillion yen, preliminary calculations released on Dec. 8 by the Ministry of Economy, Trade and Industry have shown.

The government plans to have new electricity suppliers and major utilities including the plant's operator, Tokyo Electric Power Co. (TEPCO), tack a portion of the additional costs onto power bills.

The ministry calculated that the cost of compensating people affected by the disaster would rise from 5.4 trillion yen to 7.9 trillion yen. The cost associated with decontamination and the construction of interim storage facilities for radioactive waste, meanwhile, was expected to rise from 3.6 trillion yen to 5.6 trillion yen. The ministry estimated that TEPCO would end up paying around 8 trillion yen to decommission the plant's reactors, up from an initial estimate of 2 trillion yen.

TEPCO and other major power companies are covering the cost of compensation payments but the ministry plans to make new power producers and suppliers also pay some compensation. A ministry representative explained, "Customers of power producers and suppliers that have newly entered the market used power from major utilities in the past, and benefitted from nuclear power plants."

Over a 40-year period beginning in 2020, new power producers and suppliers are set to add part of the additional costs of compensation payments to "wheeling charges" that they pay to use the lines of major power suppliers such as TEPCO, which will be passed onto power bills. However, new power producers and consumer groups say this runs counter to the aims of liberalization of the power market, which aims to stimulate the market with the entry of newcomers.

The ministry hopes to quieten resistance from market newcomers by having major utilities furnish them with relatively cheap power through the market, including nuclear and hydro power. Major utilities, however, are unhappy with this approach.

The cost of decommissioning the reactors at the Fukushima plant will be left in TEPCO's hands. A system will be created to have the Nuclear Damage Compensation and Decommissioning Facilitation Corp. collect profits that TEPCO acquires through streamlining of its management, which will be paid out under government supervision.

At this stage, however, the method of decommissioning the reactors at TEPCO's Fukushima No. 1 plant has yet to be established.

"It is difficult to accurately calculate at this stage how much it will cost to decommission the reactors," a ministry representative commented. There are accordingly fears that the decommissioning cost could rise in the future.

The government plans to extend the amount of compensation bonds loaned to TEPCO from the current 9 trillion yen to 14 trillion yen. It is possible that this could lead to an increased burden on the public in the future.

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