The long awaited restart of a nuclear reactor in Japan – A Turning Point?
This week in Japan, nuclear utility Kyushu Electric resumed operations at its Sendai 1 reactor, marking the first restart under new post-Fukushima safety rules enacted in July 2013. The industry is claiming that this development is unequivocally a positive for the nuclear and uranium industries, paving the way for further restarts across the 43-reactor fleet, and providing a positive psychological catalyst for uranium equities. Raymond James further believes the restarts will provide comfort to nuclear utilities outside Japan, as well as investors, that (i) the country's massive uranium inventories are less likely to be dumped into the market and (ii) delivery deferrals will slow.
However, "If a car isn't used for a while, and you suddenly use it, then there is usually a problem. There is definitely this type of worry with Sendai," said Ken Nakajima, a professor at Kyoto University Research Reactor Institute. Japan's restarts are being closely watched. It will, in a way, provide proof the world can move on from the Fukushima disaster - itself an obstacle on the way to a global nuclear renaissance.
Success in Japan might allow the industry to re-emphasise nuclear as a carbon-free energy alternative before international climate negotiations in Paris this year. The attraction of nuclear power, especially among Asian nations, is clear. With increasing competition for oil and gas, and the negative impact of carbon pollution, nuclear power is considered key for both energy and environmental security.
It should come as no surprise that I hope the restart in Japan goes smoothly and is a resounding success not just for the industry but the nation as a whole.