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17 November, 2015

Japan’s Finance Ministry Suggests Revising Grants for NPP Host Sites

On November 10, a working group under the Financial System Council of Japan’s Ministry of Finance (MOF) discussed the energy-related budget for the upcoming fiscal year, which begins next April.

Although most nuclear power plants in the country are still not running, having been shut down after the March 2011 earthquake, more and more of them are being restarted having passed examinations for compatibility with new regulatory standards. At the same time, however, other NPPs are being slated for decommissioning owing to excessive age and economic reasons.

Accordingly, the local municipalities hosting NPPs across Japan are beginning to show distinct differences depending on the status of their plants.

Included among the points discussed was the need to review the grant system based on the new realities in the siting areas. Specifically, the MOF’s working group made the following suggestions as measures for electric power-source siting:

  • Grants for NPPs slated for decommissioning should be duly halted, in light of the initial purpose of those grants.
  • Grants based on a uniform [81%] availability factor for suspended NPPs should be reduced to more accurately reflect the reality of individual siting areas.

At the same time, the group noted the need for time-limited measures to alleviate the shock of the changes for those municipalities highly dependent on the grants that they currently receive.

In a rough estimate of its budget for FY16 (April 2016 to March 2017), the Ministry of Economy, Trade and Industry (METI) has asked that JPY86.89 billion (USD712.21 million at USD1=JPY122)—down five percent from the previous year—be earmarked as grants to be used for electric power-source siting measures.


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