UPDATE 3-Japan utilities push to extend life of nuclear plants
* Kansai Electric files to keep 40-yr-old Mihama reactor running
* Chubu says to beef up tsunami defences at Hamaoka by Dec 2012
* Debate intensifies as safety fears square off vs economy worries (Adds graphic link)
By Kaori Kaneko and Osamu Tsukimori
TOKYO, July 22 (Reuters) - Two Japanese utilities moved on Friday to extend the life of reactors at a pair of central coastal nuclear plants, fuelling already fierce debate over energy policy in the wake of the Fukushima radiation crisis.
Kansai Electric Power Co said it had filed a petition with Japan's nuclear regulatory agency to keep the No. 2 reactor at its Mihama nuclear plant running beyond 2012, 40 years after it first went into operation.
Chubu Electric Power Co said it had completed plans to build a $1.3 billion wall to protect its Hamaoka plant from the kind of tsunami that knocked out reactor cooling systems at the Fukushima Daiichi nuclear plant in northeast Japan after the March 11 earthquake and tsunami.
Mihama is on the north coast and Hamaoka on the south coast, both southwest of Tokyo.
Japan's Nuclear and Industrial Safety Agency will have to weigh the safety of both plants against a new set of tests at a time when public concern is high over both the risks of nuclear power and the economic costs of abandoning it.
Kansai Electric was to begin a maintenance shutdown of its 1,180-megawatt Ohi No.4 reactor from late Friday, reducing the number of power-generating reactors to 16 out of 54, with capacity of 14,355 MW, meaning only 29.3 percent of the nation's total nuclear power capacity will be in use.
All the remaining reactors could be shut down by May for maintenance if public worries over safety continue to stall their restarts.
Shutting down all of Japan's reactors would create a power shortage of up to 6 percent during summer peak demand in August 2012, and force manufacturers to stockpile inventory in the spring and then ramp up output again in the autumn, SMBC Nikko Securities has said.
Daiwa Institute of Research estimates that shutting down nuclear power would reduce annual economic output by 2.5 percent -- equivalent to 14 trillion yen ($178 billion) -- over the next decade.
"Higher electricity costs would increase costs for corporations and individuals and weigh on both capital spending and consumption," said Daiwa senior researcher Mikio Mizobata.
'STRESS TESTS' KEY
Japan's planned nuclear "stress tests", simulations loosely modelled on safety assessments by the European Union, will examine how well plants could hold up to the kind of massive earthquake and tsunami that cut off power to cooling systems at Fukushima and caused reactor meltdowns.
About 80,000 residents near the Fukushima plant have been forced to evacuate and may have to wait until the year-end before a government plan on resettling the area is ready.
Earlier this week the government suspended shipments of beef from Fukushima as concerns about radiation contamination spread from vegetables and seafood to livestock and water.
Nagoya-based Chubu, which provides power to a major auto production hub in central Japan, said it would aim to complete tsunami defences at Hamaoka in December 2012.
The utility shut the Hamaoka plant in mid-May after Prime Minister Naoto Kan called for its closure, saying the area was at particularly high risk from a major earthquake.
Chubu said it plans to build an 18-metre (60 ft) high wall around the nuclear plant. The tsunami is thought to have reached as high as 15 metres at the Fukushima plant.
The utility said it would also take steps to prevent water from entering the nuclear facility.
Critics, including leading earthquake experts, have warned that the plant's location at the tip of a sandy peninsula jutting out into the Pacific also puts it at particular risk.
Chubu decommissioned the plant's No.1 and No.2 reactors in 2009 after concluding it would cost too much to make them meet tougher seismic standards. It says the three other reactors on the site are now designed to withstand a magnitude 8.5 quake.
Kansai's Mihama nuclear plant in Fukui has faced scrutiny because of the age of its three reactors, which were completed between 1970 and 1976.
In 2004, a pipe broke in the No.3 reactor and sprayed hot water and steam that killed four workers and injured seven. In 2003 and 1991, the No.2 reactor had breakdowns in its steam generators.
Nuclear critics called on government officials to block an extension for the No.2 reactor when they review the application for another 10 years of operation.
"If there had not been the case of Fukushima, the government would probably have given permission without hesitation," said Hideyuki Ban, co-director of the anti-nuclear Citizen's Nuclear Information Center.
"Now safety should be the top priority." ($1 = 78.515 Japanese Yen) (Writing by Kevin Krolicki; Editing by Edmund Klamann and Michael Watson)
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