By Chester Dawson and Vu Trong Khanh
Of THE WALL STREET JOURNAL
In Japan's most aggressive move to promote exports of nuclear
technology since the Fukushima Daiichi accident in March, a
Tokyo-based utility consortium signed a deal with Vietnam on
Wednesday to conduct a feasibility study for two new reactors.
The agreement comes as a lifeline to Japan's nuclear industry,
which harbors ambitions of expanding abroad, even as its future is
in doubt at home. Amid a post-disaster reassessment of energy
policy, the government has vowed to reduce dependence on nuclear
power for domestic electricity generation. But it has continued to
push nuclear technology in overseas markets.
For Vietnam, where rapid economic growth has increased demand
for electricity, the contract with Japan Atomic Power Co. offers a
way to diversify its energy mix beyond two Russian nuclear reactors
currently under construction. The Vietnamese government said last
year it plans 13 nuclear reactors at eight separate plants with a
combined capacity of 15,000 megawatts by 2030.
"This important milestone ... shows Vietnam's determination to
develop nuclear power plants, especially in the face of global
economic difficulties and after the incident at Japan's Fukushima
plant," Vietnamese Deputy Minister of Industry and Trade Hoang Quoc
Vuong said at the signing ceremony in Hanoi. He said he expects
nuclear power to account for 7% of Vietnam's installed generation
capacity by 2030.
Lessons from the Fukushima disaster will be taken into account
in the Vietnamese project, according to officials from Japan Atomic
Power, a consortium of Japan's nine nuclear utilities, including
Fukushima Daiichi plant operator Tokyo Electric Power Co.
(9501.TO).
"We pledge to work hard to ensure the nuclear power development
of Vietnam," said Japan Atomic Power President Yasuo Hamada.
Vietnamese officials said Japan will build advanced boiling
water reactors (ABWR), a type of technology used by Hitachi Ltd.
(6501.TO) and Toshiba Corp. (6502.TO). But Japan Atomic Power
officials in Tokyo said no decision had been made on the type or
contractor for construction and operation.
On Thursday, a larger consortium of 13 Japanese companies,
including the nine electric utilities, along with Hitachi and
Toshiba, plan to sign another memorandum with Vietnam Electricity
to start talks on reactor bids. That Tokyo-based entity, the
International Nuclear Energy Development of Japan Co., was set up
last year under the trade ministry to promote reactor exports.
The Japanese government is expected to foot most of the bill for
the plant through development aid and export promotion programs run
by state-owned Japan Bank for International Cooperation and Nippon
Export and Investment Insurance. It made a down payment on that by
underwriting the entire Y2 billion ($26 million) cost of the
18-month feasibility study.
The planned Japanese reactors will each have a 1,000-megawatt
capacity and are slated to begin operation in 2021 and 2012,
immediately after the startup of two Russian reactors currently
under construction nearby. The two plants are located about 20
kilometers apart along the coast of southern Vietnam, about 400
kilometers northeast of Ho Chi Minh City.
Before the March 11 earthquake and tsunami, Japanese industrial
equipment manufacturers had hoped to export Y20 trillion a year in
nuclear plants and other infrastructure-related business, according
to the Japan Bank for International Cooperation. Last year, the
Japanese trade ministry highlighted exports of nuclear-power plants
as a pillar of its long-term growth strategy.
Japanese public support for nuclear energy has plummeted
following meltdowns at three of the Fukushima Daiichi plant's
reactors. The government has frozen plans to build a dozen new
reactors to boost nuclear generation of electricity to 50% by
2030.
But that cooling of support for nuclear power hasn't affected
government efforts to export commercial reactors overseas. While a
Japanese-government backed project to build two Toshiba ABWR
reactors in Texas has stalled in the wake of the Fukushima
accident, a number of developing economies have signaled their
continued interest in Japanese technology, including Vietnam and
Turkey.
"We've received only positive feedback from Vietnam, which has
told us it's very anxious to get things underway," said Youichi
Nonaka, a managing director at Japan Atomic Power told reporters at
a press conference in Tokyo.
That feasibility study will assess the business case, safety
requirements and geographic suitability of the site for the two
planned reactors. But Japan Atomic Power said it was highly
unlikely the study would conclude the project isn't viable, citing
preliminary research indicating the project is sound.
Separately, an official with Vietnam Electricity said Wednesday
that Vietnam is negotiating with Russia to borrow $8 billion to
build its first nuclear power plant, the Ninh Thuan 1. Russia's
state nuclear energy corporation, Rosatom, has been chosen to build
the plant, with construction to begin in 2014 and be completed by
2020.
-By Chester Dawson and Vu Trong Khanh, The Wall Street Journal;
+81-3-6269-2837; chester.dawson@wsj.com