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TRENDS AND PROVISIONS OF THE PLAYERSIN THE NUCLEAR INDUSTRY IN JAPAN
AFTER FUKUSHIMA ACCIDENT
1KDI International Seminar on“Nuclear Power Industry Economics and Policy” January 15, 2014 @Seoul, South Korea
TRENDS AND PROVISIONS OF THE PLAYERSIN THE NUCLEAR INDUSTRY IN JAPAN
AFTER FUKUSHIMA ACCIDENT
Tomoko (Tom) MurakamiManager, Nuclear Energy Group
The Institute of Energy Economics, Japan
0. FOREWORD – PRIME MINISTER ABE ATTENDED THE ASEAN-JAPAN COMMEMORATIVE SUMMIT MEETING
2
¢ Intensify efforts to implement relevant measures for non-proliferation and disarmament, and for the safe and peaceful uses of nuclear energy,including cooperation for strengthening export control capacity of ASEAN Member States as well as capacity building and confidence building for nuclear security…
Source:Implementation Plan of the Vision Statement on ASEAN-Japan Friendship and Cooperation:Shared Vision, Shared Identity, Shared Future14 December 2013, Tokyo
Japan’s nuclear marketing strategy is
still active!
Source:Implementation Plan of the Vision Statement on ASEAN-Japan Friendship and Cooperation:Shared Vision, Shared Identity, Shared Future14 December 2013, Tokyo
CONTENTS3
1. World Nuclear Market Overview1. Nuclear development strategies in major countries after Fukushima2. Analysis – the reason of necessity of nuclear power3. Trends by category
2. Trends and strategies of competitors1. Competition and cooperation : major plant vendors2. Areva’s business portfolio3. Strategies of the Russian nuclear industry4. Strategies of the Korean nuclear industry
3. Trends and strategies of Japanese plant vendors1. Mitsubishi Heavy Industries’ business portfolio2. Hitachi’s business portfolio3. Toshiba’s business portfolio4. Strength of Japanese plant vendors and their fundamental strategy5. Japan’s stance for exporting nuclear technology after Fukushima
4. Topical issues on regulation and procurement1. Nuclear export control2. Quality Assurance Management in Japan
5. Policy implications from ASEAN newcomers to the nuclear market
1. World Nuclear Market Overview1. Nuclear development strategies in major countries after Fukushima2. Analysis – the reason of necessity of nuclear power3. Trends by category
2. Trends and strategies of competitors1. Competition and cooperation : major plant vendors2. Areva’s business portfolio3. Strategies of the Russian nuclear industry4. Strategies of the Korean nuclear industry
3. Trends and strategies of Japanese plant vendors1. Mitsubishi Heavy Industries’ business portfolio2. Hitachi’s business portfolio3. Toshiba’s business portfolio4. Strength of Japanese plant vendors and their fundamental strategy5. Japan’s stance for exporting nuclear technology after Fukushima
4. Topical issues on regulation and procurement1. Nuclear export control2. Quality Assurance Management in Japan
5. Policy implications from ASEAN newcomers to the nuclear market
41.(1) NUCLEAR DEVELOPMENT STRATEGIES IN MAJOR COUNTRIESAFTER FUKUSHIMA
¢ China— Maintaining the rapid development policy with advanced safety— 40 GW by 2015, 60 GW by 2020
¢ India— No change to the government’s nuclear development policy— Rajasthan 7/8 will be in operation in 2016
¢ France— Nuclear is one of the core competence as ever
¢ US— “We must rely on a diverse set of energy sources including renewables,
natural gas, clean coal and nuclear power”. ¢ Russia
— Maintaining the development policy based on the energy plan¢ South Korea
— New construction works continuing even after the election in 2012
¢ Italy— National vote in June 2013, forbidding new nuclear
¢ Switzerland— Determined phasing nuclear out by 2034
¢ Germany— Governmental commitment on phasing nuclear out by 2022
Pro
¢ China— Maintaining the rapid development policy with advanced safety— 40 GW by 2015, 60 GW by 2020
¢ India— No change to the government’s nuclear development policy— Rajasthan 7/8 will be in operation in 2016
¢ France— Nuclear is one of the core competence as ever
¢ US— “We must rely on a diverse set of energy sources including renewables,
natural gas, clean coal and nuclear power”. ¢ Russia
— Maintaining the development policy based on the energy plan¢ South Korea
— New construction works continuing even after the election in 2012
¢ Italy— National vote in June 2013, forbidding new nuclear
¢ Switzerland— Determined phasing nuclear out by 2034
¢ Germany— Governmental commitment on phasing nuclear out by 2022
Anti
¢ The common factors in countries that have not changed their nuclear development policies— Tight energy supply-demand balance— Demand for a rapid accumulation of power capacities— Underdeveloped social infrastructure which would be crucial for their sustainable
economic and industrial growth
“Chinese reactors are safer than those in Germany?” -> No!
¢ Developing countries need nuclear…— NOT because it is absolutely safe,— BUT simply because it can meet the energy demand increase along with
economic growth.¢ The safety concerns with regard to nuclear power are as severe in China,
India, Pakistan as they are in the US, Europe, Japan and South Korea.¢ The most realistic solution : to continue developing nuclear power along with
their energy demand, paying maximum attention to the safety problems and solving them step by step.
51.(2) ANALYSIS– THE REASON OF NECESSITY OF NUCLEAR POWER
¢ The common factors in countries that have not changed their nuclear development policies— Tight energy supply-demand balance— Demand for a rapid accumulation of power capacities— Underdeveloped social infrastructure which would be crucial for their sustainable
economic and industrial growth
“Chinese reactors are safer than those in Germany?” -> No!
¢ Developing countries need nuclear…— NOT because it is absolutely safe,— BUT simply because it can meet the energy demand increase along with
economic growth.¢ The safety concerns with regard to nuclear power are as severe in China,
India, Pakistan as they are in the US, Europe, Japan and South Korea.¢ The most realistic solution : to continue developing nuclear power along with
their energy demand, paying maximum attention to the safety problems and solving them step by step.
“Only rich countries can afford discussions of phasing nuclear out.”By Mykola Azalov, the Ukrainian Prime Minister, March 15, 2011
-20
0
20
40
60
80
100
120
0 20 40 60 80 100 120
Additional Capacity from 2013 to 2040, GW
Capacity at 2013, GW
1
US
France
Russia
Korea
4
Germany
2
3 Middle East
ASEAN
India
China
Italy
61.(3)TRENDS BY CATEGORY1. Countries using and promoting nuclear power2. Countries required to substantially expand nuclear
power 3. Countries planning to introduce nuclear power4. Countries tending to decrease nuclear power
•Countries in category 1 &2, those position nuclear power as an important part of an energy portfolio maintain giving priority to nuclear power development.
•Countries in category 4, those have traditionally hesitated further nuclear power developmentfeature growing arguments against nuclear.
-20
0
20
40
60
80
100
120
0 20 40 60 80 100 120
Additional Capacity from 2013 to 2040, GW
Capacity at 2013, GW
1
US
France
Russia
Korea
4
Germany
2
3 Middle East
ASEAN
India
China
Italy
•Countries in category 1 &2, those position nuclear power as an important part of an energy portfolio maintain giving priority to nuclear power development.
•Countries in category 4, those have traditionally hesitated further nuclear power developmentfeature growing arguments against nuclear.
72.(1)COMPETITION AND COOPERATION : MAJOR PLANT VENDORS
Areva MitsubishiWestinghouse
Toshiba GE Hitachi Canada Russia South Korea China
Over1.5 GW
1-1.3GW
EPR
Under review for
NRC-DC
EU-APWR
US-APWR
Under review for
NRC-DC
AP-1000
NRC-DC approved
VVER-15
00
VVER-
1000
PWR PWRCAN
DUABWR/BWR
ATMEA-1
Basic Design Process completed
Proposing to Turkey
JV in US and in
Japan since April
2008
ESBWR
Under review for
NRC-DC
ABWR
Renewal pre-
application for NRC-
ACR-1000
Japanese 3.5+ BWRJapanese 3.5+
PWR
ABWRAES-
2006
KERENA
(Former SWR-
1000@Siemens)
APR-1400
Under
constructio
n in UAE
OPR-1000
CAP-1400
ACPR-
1000
CPR-
1000
¢ Major nuclear vendors are in the US, France, Japan, Russia, Canada¢ New comers from South Korea and China
*) NRC-DC: The design certification as provided by the U.S. Nuclear Regulatory Commission
Areva MitsubishiWestinghouse
Toshiba GE Hitachi Canada Russia South Korea China
Over1.5 GW
1-1.3GW
EPR
Under review for
NRC-DC
EU-APWR
US-APWR
Under review for
NRC-DC
AP-1000
NRC-DC approved
VVER-15
00
VVER-
1000
PWR PWRCAN
DUABWR/BWR
ATMEA-1
Basic Design Process completed
Proposing to Turkey
JV in US and in
Japan since April
2008
ESBWR
Under review for
NRC-DC
ABWR
Renewal pre-
application for NRC-
ACR-1000
Japanese 3.5+ BWRJapanese 3.5+
PWR
ABWRAES-
2006
KERENA
(Former SWR-
1000@Siemens)
APR-1400
Under
constructio
n in UAE
OPR-1000
CAP-1400
ACPR-
1000
CPR-
1000
82.(2) AREVA’S BUSINESS PORTFOLIO
¢ Mining and Front-end business has been the core and will be.¢ There are several businesses other than nuclear in “Reactors and
Services” segment, i.e. renewable energy. -> Diversifying the business portfolio (maybe) as a risk management.
Mining, 1,360
Reactors and
Services, 3,452
Back End,
1,732
Front-end,
2,049
Renewable
Energies, 572
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
-20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
Opera
ting
incom
e/G
ross
Sale
s R
evenue
Sales Increase 2012/11
Areva 2012 Unit:MEuro
Mining, 1,360
Reactors and
Services, 3,452
Back End,
1,732
Front-end,
2,049
Renewable
Energies, 572
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
-20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
Opera
ting
incom
e/G
ross
Sale
s R
evenue
Sales Increase 2012/11
Areva 2012 Unit:MEuro
2.(2) AREVA’S BUSINESS PORTFOLIO –IMPACT OF THE PHASING-OUT OF GERMAN NUCLEAR MARKET
9
¢ German nuclear energy policy, which has recessed after Fukushima accident, gave some impact on French nuclear industry. — Works for existing reactors such as maintenance, instrumentation and
repair, had had a quite large portion in the income of French nuclear industry.
¢ Now the works having been stably supplied by German nuclear power industry, such as fuel fabrication and repair, has been lost.
¢ It would be a challenge for Areva to reconstruct the market post Fukushima and to secure stable customers like Germany before Fukushima.
¢ Areva has been promoting the expansion and diversification of its business portfolio by developing renewable energy technology and engineering consultations.
¢ German nuclear energy policy, which has recessed after Fukushima accident, gave some impact on French nuclear industry. — Works for existing reactors such as maintenance, instrumentation and
repair, had had a quite large portion in the income of French nuclear industry.
¢ Now the works having been stably supplied by German nuclear power industry, such as fuel fabrication and repair, has been lost.
¢ It would be a challenge for Areva to reconstruct the market post Fukushima and to secure stable customers like Germany before Fukushima.
¢ Areva has been promoting the expansion and diversification of its business portfolio by developing renewable energy technology and engineering consultations.
What is the next step for Areva? Everyone is watching !What is the next step for Areva? Everyone is watching !
2.(3)STRATEGIES OF THE RUSSIAN NUCLEAR INDUSTRY
Technological capabilityState owned and stable in any political movementsUranium enrichment capacity with a market share of 50 percent or more
OECD members are not in the marketing target area
10
¢ “The oil sector is in great need of substantial investments to modernize, and as well, the focus of export towards Asia would be crucial to compensate for the weakened gas demand in Europe”.
Source:“Russian Energy Strategy up to 2030”
Technological capabilityState owned and stable in any political movementsUranium enrichment capacity with a market share of 50 percent or more
OECD members are not in the marketing target area
Unchanged energy policy in theemerging market in Asia, Eurasia, Middle East
Advancing Korean and Chinese players
S W
O T
Lower cost and lower bid price compared to European or Japanese companies
Non-integrated fuel cycle supply chain
2.(4)STRATEGIES OF THE KOREAN NUCLEAR INDUSTRY
¢ Nuclear energy technology is a crucial strategic industry for South Korea for its stable supply of energy, and also a basis of the technological competence and of the economic development.
¢ No wonder if the next target of Korean nuclear industry is a developed European country to compete with Areva or with Japanese nuclear vendors.
11
Lower cost and lower bid price compared to European or Japanese companies
Non-integrated fuel cycle supply chain
Unchanged energy policy in theemerging market in Asia, Eurasia, Middle East
Advancing Russian and Chinese playersDomestic economic growth
S WO T
123.(1) MITSUBISHI HEAVY INDUSTRIES’ BUSINESS PORTFOLIO
¢ “Power Systems” segment is the core.
¢ “Manufacturing Capability” is the basic philosophy.
¢ Many export experiences to Europe, US and China.
Based on high level of manufacturing capability with their well-experienced machinery works, MHI aims to be a single top plant vendor in the world.
Shipbuilding &
Ocean
Development,
225.8
Power
Systems,
988.8 Machinery and
steel
infrastructure
systems, 482.6
Aerospace
systems, 485.8
General
machinery and
special
vehicles, 389.1
Others, 345.8
0%
5%
10%
-30% -20% -10% 0% 10% 20%
Opera
ting
Pro
fit(
FY2011)
Sales growth(FY2011->2012)
Shipbuilding &
Ocean
Development,
225.8
Power
Systems,
988.8 Machinery and
steel
infrastructure
systems, 482.6
Aerospace
systems, 485.8
General
machinery and
special
vehicles, 389.1
Others, 345.8
0%
5%
10%
-30% -20% -10% 0% 10% 20%
Opera
ting
Pro
fit
(FY2011
)
Sales growth(FY2011->2012)
133.(2) HITACHI’S BUSINESS PORTFOLIO
¢ “Power Systems” segment has stable sales, but the profit rate is not so high. -> nuclear business is not a “core”.
¢ Sustainable technical alliance with GE has brought a steady accumulation of intelligence to Hitachi.
¢ High level of manufacturing capability will concentrate to highly-efficient products.
Based on their manufacturing technologiescollaborating with GE’s brand image and marketing power, Hitachi aims to keep up with global nuclear market growth.
Information and
Telecommunicatio
n Systems, 1,787
Power Systems,
905
Social
Infrastructure and
Industrial Systems
Electric Systems
and Equipment,
1,314
Electric Systems
and Equipment,
1,014
Construction
Machinery, 756
High Functional
Materials and
Components,
1,336
Digital Media and
Consumer
Products, 819
Financial
Services, 340
-5.0%
0.0%
5.0%
10.0%
-10% 0% 10%Ope
rating
Pro
fit(
FY2010
)
Sales Growth(FY2011->2012)
Based on their manufacturing technologiescollaborating with GE’s brand image and marketing power, Hitachi aims to keep up with global nuclear market growth.
Information and
Telecommunicatio
n Systems, 1,787
Power Systems,
905
Social
Infrastructure and
Industrial Systems
Electric Systems
and Equipment,
1,314
Electric Systems
and Equipment,
1,014
Construction
Machinery, 756
High Functional
Materials and
Components,
1,336
Digital Media and
Consumer
Products, 819
Financial
Services, 340
-5.0%
0.0%
5.0%
10.0%
-10% 0% 10%Ope
rating
Pro
fit
(FY2010
)
Sales Growth(FY2011->2012)
143.(3) TOSHIBA’S BUSINESS PORTFOLIO
¢ “Social Infrastructure” segment has stable revenue and profit.¢ By acquisition of Westinghouse in 2006, Toshiba has aimed to expand
their business areas and achieve high sales growth – before Fukushima.<Post Fukushima>¢ No major movement or release in nuclear business after Fukushima
Based on high level of business building skill and the synergy with Westinghouse business, Toshiba has aimed to achieve No.1 performancein world nuclear business.
…………
Still now ???
Digital
Products
Electric
Devices
Social
Infrastructure
Home
Appliances
-5%
0%
5%
10%
-15% -10% -5% 0% 5% 10%Opera
ting
Pro
fit(
FY2011)
Sales Growth(FY2011->2012)
Based on high level of business building skill and the synergy with Westinghouse business, Toshiba has aimed to achieve No.1 performancein world nuclear business.
…………
Still now ???
Digital
Products
Electric
Devices
Social
Infrastructure
Home
Appliances
-5%
0%
5%
10%
-15% -10% -5% 0% 5% 10%Opera
ting
Pro
fit
(FY2011)
Sales Growth(FY2011->2012)
153.(4)STRENGTH OF JAPANESE PLANT VENDORS AND THEIR
FUNDAMENTAL STRATEGY¢ Key Advantage :
— Manufacturing Capability -- many export experiences to US, France, Belgium, China, Taiwan …
— High level of Technological Readiness & Quality¢ Embarkation to :
— Excellent and Reasonable Design Concept as a main contractor— Development of new phase reactors -- Post Generation-III reactor,
middle sized reactor, small & simplified reactor, …¢ Private players should judge country-by-country reactor needs and risks
for their selection and concentration. Becoming the world’s top runners will be companies that fully appreciate country or regional risks, have clear visions and make best investment decisions.
¢ Key Advantage :— Manufacturing Capability -- many export experiences to US, France,
Belgium, China, Taiwan …— High level of Technological Readiness & Quality
¢ Embarkation to : — Excellent and Reasonable Design Concept as a main contractor— Development of new phase reactors -- Post Generation-III reactor,
middle sized reactor, small & simplified reactor, …¢ Private players should judge country-by-country reactor needs and risks
for their selection and concentration. Becoming the world’s top runners will be companies that fully appreciate country or regional risks, have clear visions and make best investment decisions.
Development Design Manufacture Construction Mainte
nance
Main Contractor
Sub Contractor
Key Advantage
163.(5) JAPAN’S STANCE FOR EXPORTING NUCLEAR TECHNOLOGY AFTERFUKUSHIMA
“Continue to offer nuclear technologies of the highest safety”It is the responsibility of Japan to contribute to strengtheningnuclear safety worldwide by sharing with the world its experience and lessonsderived from the nuclear accident of last year, and to offer its nuclear technologiesof the highest standard in safety in the worldto those foreign countries whichwish to utilize nuclear technologies of our country, taking into account thesituation and will of those countries.
Effective bilateral agreement with:Kazakhstan, May 2011South Korea, January 2012Vietnam, January 2012Jordan, February 2012
JAPC and JINED Inks Memorandum on Cooperation with Electricity of VietnamOn September 28, 2011,the Japan Atomic Power Company (JAPC) and Electricity of Vietnam (EVN) signed an agreement on the implementation of a feasibility study to build a nuclear power plant (NPP) on a second site in Ninh Thuan Province.
On September 29, JINED, also signed a memorandum with the Vietnamese firm on cooperation in the second project.
Government of Japan Private companies“Continue to offer nuclear technologies of the highest safety”It is the responsibility of Japan to contribute to strengtheningnuclear safety worldwide by sharing with the world its experience and lessonsderived from the nuclear accident of last year, and to offer its nuclear technologiesof the highest standard in safety in the worldto those foreign countries whichwish to utilize nuclear technologies of our country, taking into account thesituation and will of those countries.
Effective bilateral agreement with:Kazakhstan, May 2011South Korea, January 2012Vietnam, January 2012Jordan, February 2012
Source: “Innovative Strategy for Energy and the Environment”, National Policy Unit, 14 September 2012
JAPC and JINED Inks Memorandum on Cooperation with Electricity of VietnamOn September 28, 2011,the Japan Atomic Power Company (JAPC) and Electricity of Vietnam (EVN) signed an agreement on the implementation of a feasibility study to build a nuclear power plant (NPP) on a second site in Ninh Thuan Province.
On September 29, JINED, also signed a memorandum with the Vietnamese firm on cooperation in the second project.
Source: JAIF
TEPCO has announced nothing yet
174.(1)NUCLEAR EXPORT CONTROLS
¢ “U.S. energy companies and manufacturers face impediments in capitalizing on the enormous market opportunities”, the Nuclear Energy Institute says.
¢ The U.S. export control regime places (U.S. companies) at a serious disadvantage next to their competitors in the international export market.
— The U.S. regime is more complex and difficult to navigate, evidenced by the division of export licensing and authorization powers among four agencies versus one or two at the most in the other nations.
— The U.S regime contains added restrictions and legal and bureaucratic hurdlesthat exceed international norms.
— The United States is significantly less efficient in processing export licenses, often taking nearly a year or more to process applications completed far faster in other nations.
¢ Standard processing period for export license applications— Korea: 5 to 15 days— Russia: 25 to 45 days— Japan: 90 days — France: 9 months— US : 12 months or more
¢ “U.S. energy companies and manufacturers face impediments in capitalizing on the enormous market opportunities”, the Nuclear Energy Institute says.
¢ The U.S. export control regime places (U.S. companies) at a serious disadvantage next to their competitors in the international export market.
— The U.S. regime is more complex and difficult to navigate, evidenced by the division of export licensing and authorization powers among four agencies versus one or two at the most in the other nations.
— The U.S regime contains added restrictions and legal and bureaucratic hurdlesthat exceed international norms.
— The United States is significantly less efficient in processing export licenses, often taking nearly a year or more to process applications completed far faster in other nations.
¢ Standard processing period for export license applications— Korea: 5 to 15 days— Russia: 25 to 45 days— Japan: 90 days — France: 9 months— US : 12 months or more
Source: “ NUCLEAR EXPORT CONTROLS A Comparative Analysis of National Regimes for the Control of Nuclear Materials, Components and Technology”Pillsbury Winthrop Shaw Pittman LLP, October 1, 2012
short
long
4.(2) QUALITY ASSURANCE MANAGEMENT IN JAPAN
¢ Since the “dishonesty”problems in self-controlled inspection records in 2002, Quality Assurance Requirements for nuclear safety were placed on utilities as a national regulation.
18
Source: “Quality Assurance Code for Safety in Nuclear Power Plants: JEAC4111-2009” of the Japan Electric Association Model based on adaptation of the ISO9001 model to nuclear safety
195. POLICY IMPLICATIONS FROM ASEAN NEWCOMERS TO THENUCLEAR MARKET
These would be highly recommended by ASEAN newcomers:¢ Thorough review of the Fukushima accident with sufficient explanations
and analyses from related parties in Japan and, most of all, information sharing with all international organizations in relation ( i.e. IAEA) would be the top priority.
¢ Safety regulatory authorities and governmental / private nuclear industries in Northeastern Asia would learn lessons from Fukushima through IAEA or Japanese authorities.
¢ South Korea, China and Japan can share intelligences and cooperate even while competing in the areas of:— Capacity building for infrastructure and human resources— Training, implicating and education for operation and maintenance — Emergency preparedness
¢ Working together with Nuclear Energy Agency/OECD, Nuclear Regulatory Commission (US) to introduce an advanced safety standard would be also important to catch up with the global nuclear safety consensus.
These would be highly recommended by ASEAN newcomers:¢ Thorough review of the Fukushima accident with sufficient explanations
and analyses from related parties in Japan and, most of all, information sharing with all international organizations in relation ( i.e. IAEA) would be the top priority.
¢ Safety regulatory authorities and governmental / private nuclear industries in Northeastern Asia would learn lessons from Fukushima through IAEA or Japanese authorities.
¢ South Korea, China and Japan can share intelligences and cooperate even while competing in the areas of:— Capacity building for infrastructure and human resources— Training, implicating and education for operation and maintenance — Emergency preparedness
¢ Working together with Nuclear Energy Agency/OECD, Nuclear Regulatory Commission (US) to introduce an advanced safety standard would be also important to catch up with the global nuclear safety consensus.
20
THANK YOUVIELEN DANK
정말감사합니다TACK SÅ MYCKET
MERCI BEAUCOUP
THANK YOUVIELEN DANK
정말감사합니다TACK SÅ MYCKET
MERCI BEAUCOUP