Sustaining Government Support In Japan

1. Sustaining Government Support In Japan Masaomi KOYAMA Deputy Director Nuclear Energy Policy Planning Division Ministry of Economy, Trade and Industry, Japan Technical Meeting / Workshop on Evaluation Methodology for Nuclear Power Infrastructure Development 10 - 12 December 2008, Vienna, Austria

2. Nuclear power option included within the national energy strategy Considerations before a decision to launch a nuclear power programme is taken Preparatory work for the construction of a NPP after a policy decision has been taken Long-Term Government Commitment ? INFRASTRUCTURE DEVELOPMENT PROGRAMME MILESTONE 1 Ready to make a knowledgeable commitment to a nuclear programme MILESTONE 3 Ready to commission and operate the first NPP MILESTONE 2 Ready to invite bids for the first NPP Infrastructure development program Maintenance and continuous infrastructureimprovement PHASE3 Activities to implement a first NPP PHASE 2 PHASE 1 Preparing for assuming commitments & obligations Operation / decommissioning Pre project Project decision making Construction 1st. NPP Project Commissioning Bidding process Feasibility study  10 – 15 years Is Government Commitment/Involvement needed all the time ? TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

3. GOVERNMENT COMMITMENT IN EARLY STAGE TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

4. Government Commitment in early stage(1) Brief history of the development of NPP in early stage; 1954 National Nuclear Power Programme started 1961 Construction (Concrete placing) of the first NPP started 1965 The first NPP connected to the grid (Commercial operation started in 1966) Budget 1954 First national budget for nuclear power development allocated (approved by the Diet) Legislation 1955 Atomic Energy Basic Act was legislated <Basic Law> Atomic Energy Basic Act is the basic law for the peaceful use of nuclear energy. This act restricts nuclear energy to peaceful purposes only. The 3 principles, democratic, independent and public has not changed for over 50 years. 1957 Act for Regulation of Nuclear Source Material, Nuclear Fuel Material and Reactors was legislated <Law of Safety Regulation> And other related laws and government orders were established before the first application for the establishment of NPP. TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

5. Government Commitment in early stage(2) Formation of Governmental Organisation 1955 Establishment of the Atomic Energy Commission (Act for the Establishment of Atomic Energy Commission) 1955 Nuclear development department was established in the Cabinet Office (Amendment Act for the Establishment of Cabinet Office) Human Resource Development Fiscal Year 1954 Governmental Project on Human Resource Development started Studying Abroad Programme, Human Resource Development Programme at domestic nuclear related organisations. Nuclear Energy Development Basic Plan 1956 Atomic Energy Commission established the first “Long-Term Plan for Research, Development and Utilization of Nuclear Energy” After the first Long-Term plan, AEC published the plan around every 5 years. TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

6. Government Commitment in early stage(3) Feasibility Studies for Siting of NPP 1963 Nationwide research for the feasibility of siting started (Boring for geological survey, Climate Survey) – This result was used by electricity utilities for siting NPPs. Aid for Nationalisation of Reactor Technologies <Example> - Subsidies by Government - Government loan programme by Japan Development Bank - Preferential tax treatment for new technology TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

7. SUSTAINABLE COMMITMENT FOR NPP DEVELOPMENT TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

8. Examples of Past Governmental Actions Government of Japan has acted for the development of NPPs continuously since the NPP development programme started. Following event are some examples of Governmental Actions; 1973 Introduced Public Consultation procedure in nuclear development 1973 Established an Information Disclosure Office 1974 Legislation Act on the Development of Areas Adjacent to Electric Power Generating Facilities 1978 Established the Nuclear Safety Commission 1981-85 National project on Advanced Light Water Reactor (ABWR, APWR) 2001 Established the Nuclear and Industrial Safety Agency TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

9. PRESENT GOVERNMENT SUPPORT FOR NPP DEVELOPMENT TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

10. Prime Minister’s Addresses/Cabinet Resolutions • Statement by Prime Minister • <Example> • Prime minister’s Speech (April 2008, JAIF Annual Conference, Tokyo) • it is critical for us to strengthen the utilization of nuclear energy as a major source of power • Cabinet Resolution • <Example> • Framework for Nuclear Energy Policy (October 2005) • Economic and Fiscal Reform (June 2008) • Action Plan for Building Low Carbon Society (July 2008) TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

11. Nuclear Energy Policy = Governmental Commitment • Basic Targets under the Framework for Nuclear Energy Policy (October, 2005) • 1) Keeping the share of nuclear power generation at least 30-40% beyond 2030. • 2) Steady promotion of the nuclear fuel cycle. 3) Introduction of the first commercial FBR in 2050 TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

12. Implementation of the Framework for Nuclear Energy Policy Policy Packages under the “Nuclear Energy National Plan” (August 2006) 1. Ensuring investments in the construction and replacement of nuclear plants 2. Appropriate use of existing NPPs with assuring safety 3. Deploying strategy for acquiring natural resources 4. Steady promotion of the nuclear fuel cycle and strategic enhancement of related industries. 5. Early introduction of commercial FBR and its fuel cycle 6. Secure sufficient levels of technologies and human resources 7. Support international activities of Japan’s nuclear industry 8. Active participation in efforts to create an international framework for expanding the use of nuclear energy and ensuring non-proliferation 9. Building trust between government and local communities through detailed communication 10. Reinforcing the measures for radioactive waste disposal TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

13. Example of Specific Measures of Nuclear Energy National Plan (1) Investments for Nuclear Power Plants - Reduction and dispersion of investment risks - Reduction and leveling-out of the financial burden of initial investments and decommissioning - Promotion of broad-area operations - Clear demonstration of the benefits of nuclear power generation • Specific Steps • Reduction of backend risks: a provisional reserve system for the 2nd reprocessing plant Reserve system for leveling out the future financial burden of costs related to spent fuels other than those handled by the Rokkasho plant. Provisional system until a detailed plan for reprocessing is fixed. • Leveling-Out of Initial Investment Cost: a pre-operation reserve system for the construction of new nuclear plants Reserve system for leveling-out the cost of capital depreciation of initial investment TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

14. Example of Specific Measures of Nuclear Energy National Plan (2) Maintenance of Technology and Human Resources • - Launch of a joint public-private project for the development of a next-generation LWR • - Creation of a nuclear industry with the scale and competitiveness suited to the global market • Support for training of field engineers and transfer of skills to future generations • Support for training of university researchers in the nuclear sector • Specific Steps • A feasibility study for a next-generation LWR was started under the fiscal 2006 budget as the first national nuclear project in 20 years. • Assistance programmes for training of field engineers on maintenance work and for transfer of skills to future generations were started under the fiscal 2006 budget. • The “nuclear energy human resources programme” was established under the fiscal 2007 budget. TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

15. Example of Specific Measures of Nuclear Energy National Plan (3)Active Involvement in the Global Framework Basic Policy As a leader among non-nuclear armed countries engaged in the peaceful use of nuclear energy, Japan will continue to ensure strict export control, follow safeguard arrangements and implement measures to safeguard nuclear materials. Japan will thus serve as a model country to ensure nuclear non-proliferation and the peaceful use of nuclear energy simultaneously. • Specific Steps • The Japanese government announces a proposal that supplements a nuclear fuel supply assurance scheme proposed by six countries in Sept. 2006. (The “IAEA nuclear fuel supply registration system.”) • The Japanese government expressed support for the GNEP initiative immediately after its announcement in Feb. 2006. TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

16. Support for Local Community Development (1) There are some support programmes for the development local communities where power plants sited. This shows a example of the programmes. Establishment of the Special Account for Promotion of Power Sources Development 【Background】 Because it is important to secure the stable power supply with low price for our stable daily life and economical development, it was required to promote the power stations with scheduled plan. However, the situation for locating the power stations including nuclear power plants was difficult in rapid growth of power demand in 1970s since the regional coordination had been delayed. 【Measures】 To deal with above situation, three Acts for the development power sources(‘Tax Act for Promotion of Power Sources Development’, ‘Act on Special Accounts for Electric Power Development Acceleration Measures’ and ‘Act on the Development of Areas Adjacent to Electric Power Generating Facilities’ ) were enacted in 1974 to promote the power resource development, which new tax system was set to impose based on power capacity that electricity company sells and new special account/budget for promotion of power resource development. TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

17. Support for Local Community Development (2) For the purpose of establishing operating power station smoothly, Three Power related Acts; ‘Tax Act for Promotion of Power Sources Development’, ‘Act on Special Accounts for Electric Power Development Acceleration Measures’ and ‘Act on the Development of Areas Adjacent to Electric Power Generating Facilities ’were legislated in 1974. These Acts support the development local community where power stations sited. Tax law Law related to special account Law for located area Consumer Government （Special account for energy） Subsidy for measure to power station located area Account for power resource promotion General account Fee Measure for Use Electric company Measure for Location Special subsidy to power utility located area including nuclear Tax for power resource promotion　（Pay 37.5 sen per 1kWh of selling electricity） For use：18.5sen For location：19.0sen (* 100 sen = 1 yen) Subsidy for project promotion in located area Funds for located area etc. ※One of the laws, Act on Special Accounts for Electric Power Development Acceleration Measures, was abrogated on April 1st 2007, and related works have been taken to Act for Special Account. TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

18. Support for Local Community Development (3) Subsidyfor Measures to Power Station Located Areas For the development of regions with nuclear power plants, subsidies are granted to 1) Prefectures and municipalities where nuclear power plants are sited, 2) Within calculated limits based on energy output, the amount of power generated, and population, etc., 3) For projects in the hardware and software sectors for which these local communities apply, based on their own initiative. Related to nuclear location/operation (For Early Stage of siting, Development Power station and other purpose） Tax for promotion of electric power development General account Special Account for Energy (Promote for siting power stations ) Located prefectures Neighboring municipalities Sited municipalities Related to NPP operation (For long-term development) TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

19. Support for Local Community Development (4) Example of Projects for the Subsidy for Measure to Power Station Located Areas Extensive projects are available to promote the located area effectively. Public Facilities Project For equip, maintain and operate the public facilities/service including road, water, sport, education/culture. Welfare project To give subsidy to the projects for improvement in welfare include equip/maintain the facilities for medical and social welfare, help home help business. Public Information Project Organise the events such as inspections, training, lecture, discussion and make poster/brochure to promote the better understanding for power generation utilities Activation of Industries Project Promotion of locating factories such as development of industrial park, development of facilities which promote local industries Local Economy Revitalization project To publicity local tourism information, human resource development, to support local industries, etc. Benefit project To give benefit to take measure for discount of electric fee for households, factories, etc. （cf.）　In FY2008, each household in Kariwazaki, Niigata received the benefit, total amount about 29,000 yen（about 25% discount) Warm Discharged Warter Related Project Seafood-raising, training, research of fisheries, effective use of discharged water etc. 19 TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

20. Support for Local Community Development (5) Special Measures Act Designed to Promote Local Economies where Nuclear Power Stations are Located • Establish the Council for NPP development with related member of Cabinet leading with prime minister as chairman. • After deliberation at the council, prime minister decides the area oritspromotion plan. • Based on the plan, the government implements the support measure like increasing the assistant rate with safety consideration in the area. Scheme Process Government/Council Prefecture/Muni. Council for NPP development （Chairman）Prime Minister （Member）Related cabinet members Prefectural governor hears the opinion from Mayerof related municipalities and make plan for the location. It is important that nuclear power generation make steady progress since it is superior to provide stable supply and to measure global warming. However, the situation over nuclear power plant location has became difficult after criticalityaccident at JCO’s uranium reconversion plant in 1999. deliberation Apply By Prime Minister Designate the areas for NPP sited Prefectural governor hears the opinion from Mayerof related city and make plan for promotion of the area. Council for NPP development deliberation Submit By Prime Minister Decision of promotion plan For stable energy supply in future, it is necessary to take special measures to equip life environment, industry infrastructure totally and widely around the area of nuclear power plantssited since nuclear power is essential for our country’s electricity supply and need to promote it. From these perspective, this law was approved in 2000 and enacted in FY2001 to promote these area. ＜Support measure＞ Target：Road, Harbor, Port, Fire facility, compulsory education facility Increasing the assistant rate (e.g. 5.5/10) and other support Implement the promotion plan at each area Support TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

21. Public Information Activities by Government Public Acceptance Activities are crucial thing to expand nuclear power • Build trust between government and local communities • - Create a visible presence in communities where nuclear facilities are sited, dealing sincerely with their particular concerns in meetings at all levels. • - Stand on a common position of information recipients are very important. • - Enhance direct dialog with local residents (in small face-to-face meetings, etc.). • - Ultimately the responsible persons at the national level should make clear the government’s thinking and policy. Concrete Measures - Information and opinion exchange between central government and local residents which lived near nuclear facilities sited to understand accurately about peaceful use of nuclear energy - Holding experience-based exhibit, open seminars and workshops - Sending experts to various kind of events to provide accurate information about nuclear energy TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

22. Long-Term Government Commitment Nuclear power option included within the national energy strategy Considerations before a decision to launch a nuclear power programme is taken Preparatory work for the construction of a NPP after a policy decision has been taken INFRASTRUCTURE DEVELOPMENT PROGRAMME MILESTONE 1 Ready to make a knowledgeable commitment to a nuclear programme MILESTONE 3 Ready to commission and operate the first NPP MILESTONE 2 Ready to invite bids for the first NPP Infrastructure development program Maintenance and continuous infrastructureimprovement PHASE3 Activities to implement a first NPP PHASE 2 PHASE 1 Preparing for assuming commitments & obligations Operation / decommissioning Pre project Project decision making Construction 1st. NPP Project Commissioning Bidding process Feasibility study  10 – 15 years Government Commitment/Involvement is needed all the time TM/WS on Evaluation Methodology for Nuclear Power Infrastructure Development, 10-12 December 2008

23. Thank You For Your Attention !