Japan’s Parliament, the Diet, had recently approved the India-Japan civil nuclear energy deal.
What is the significance?
Japanese PM believes that nuclear exports are key to kick-starting the Japanese economy.
2008 waiver it received from the Nuclear Suppliers’ Group so far has had limited tangible benefits for the country’s power industry.
This deal represents hope that it might finally begin paying off.
It is also a necessity for enabling India’s bilateral nuclear deals with other countries.
Key elements of certain reactors like the AP 1000 and EPR, including safety components and domes, are a near-Japanese monopoly.
Has Japan lost significance in nuclear market?
Circumstances in the nuclear industry are undergoing tumultuous changes.
It makes the India-Japan deal less significant than it would have once been.
Recent developments have diminished Japan’s previously formidable nuclear capabilities.
The most dramatic example is that of Toshiba, once a titan of the Japanese nuclear reactor industry that is currently struggling to stay afloat following the enormous losses.
Hitachi Ltd., another nuclear heavyweight, also booked ‘an estimated $588 million write-down for fiscal 2016.
The company said ‘demand for nuclear fuel in the U.S. was unlikely to grow as strongly as had been expected’.
In the aftermath of the 2011 Fukushima nuclear disaster, the nuclear industry is facing a global crisis.
Stricter safety regulations have spiked the costs of constructing plants and ‘some countries have become more cautious about new reactors.
In Japan there has been no domestic construction on a new reactor for the past eight years.
Hitachi, Mitsubishi and Toshiba are all focussing on repair and maintenance of existing plants rather than on construction of new ones.
The emergence of cheap shale oil and gas has made competition in the energy sector tougher than ever.
Wind and solar power generation are also growing as viable, alternative energy sources.
According to the International Atomic Energy Agency (IAEA), just three nuclear reactors started construction worldwide last year, and only 51 were begun between 2010 and 2016.
In contrast 20 to 30 new were being built every year in the 1960s and 1970s.
