Positive News on Japanese Restarts

March 30, 2017

In case you missed the news earlier this week, the High Court in Japan’s Osaka province has overturned the local court injunction preventing two reactors from restarting. According to Bloomberg, this is the third time a Japanese High Court has ruled in favour of Japanese utilities during the restart process. With the injunction overturn, it’s likely both reactors will be back online within a month.

This is a win for the Kansai Electric Co., which owns the No. 3 and 4 Takahama reactors. It’s also a win for Japan, which has seen air pollution levels rise exponentially since shutting down its fleet, and continues to hemorrhage money through natural gas imports.

It’s also a big win for the industry in general.  As I’ve highlighted many times before, the growth story for nuclear, and increased uranium demand, is a China, Russia and India story. However, while China may be the leader in reactors under construction, Japan is one of Nuclear’s sentiment leaders. Positive progress in Japan will help the industry far beyond ensuring Japanese utilities do not dump their uranium inventories onto the spot market because it will start to bring sentiment close to the positive, long term fundamentals.

Currently 25 of Japan’s reactors – around half of it’s entire fleet – are in various stages of the restart progress. The most recent forecast I’ve seen (by Japan’s Nuclear Energy Institute) suggested we could see 19 of these in operation by the end of March 2018. With this latest decision by the provincial High Court we are possibly starting to see a pattern that, while delaying tactics will no doubt be used with some other restarts, it’s only a matter of time before each reactor that gets NRA approval, comes back online.

Dev Randhawa, CEO and Chaiman