REFILE-Japan study factors accident risk into nuclear power cost estimates

(Corrects name of advisory body in para 5 to Japan Atomic Energy Commission, not Japan Atomic Power Commission)

TOKYO, Nov 8 (Reuters) - The cost of generating nuclear power in Japan would rise by up to 1.6 yen per kilowatt hour if the risk of a serious nuclear accident like the one in Fukushima is factored in, a government panel of experts estimated, providing a key element for the government to decide on its post-Fukushima energy policy.

Lawmakers and officials are working to come up with a new energy policy after the Fukushima radiation crisis made it difficult, if not impossible, to build more reactors in the world’s third-biggest generator of nuclear power.

In 2004, a government panel’s assessment of the cost of hydro, fossil fuel and nuclear power generation had concluded atomic power at 5 to 6 yen per kwh would be the cheapest energy option most of the time. The assessment reflected the 40-year operation cost of a model reactor but did not factor in the risk of a serious accident or the cost for recycling waste nuclear fuel.

But now that the crisis at the Fukushima Daiichi nuclear plant forced its operator, Tokyo Electric Power Co , to pay compensation for residents who have been evacuated and extra costs to decommission the crippled reactors, a new estimate on the cost of nuclear power was needed to include these factors.

The panel under the Japan Atomic Energy Commission, the country’s nuclear policy advisory body, calculated the extra costs on the assumption that the impact of an accident at a model reactor is as broad and severe as the leakage of radioactive material at the Fukushima Daiichi plant.

A separate government panel is working on a new estimate for an operation cost under the current circumstances.

The estimates from both panels will be submitted to the ongoing ministerial debate on new energy policy led by National Strategy Minister Motohisa Furukawa, whose draft options for post-Fukushima energy plans are expected to be announced by spring next year.

If a severe nuclear accident occurs as frequently as in the past in Japan, or once in 500 reactor years, the extra cost would be between 1.2 and 1.6 yen per kwh, the panel said.

Under a different assumption that the frequency is once in 100,000 reactor years, which is in line with the safety guidelines by IAEA, the panel estimated the extra cost would be 0.006 to 0.008 yen per kwh.

The cost for the risk of an accident could rise further if compensation payments to help evacuees and cover other damages increases from the current estimate, based on actual payments related to the Fukushima Daiichi plant, of 5 trillion yen ($64 billion) for a model reactor, the panel said.

The cost of treatment of waste nuclear fuel for a model reactor is estimated to range from 1 to 2 yen per kwh, with building a repository site the least costly option, the panel also said. ($1 = 78.030 Japanese Yen) (Reporting by Risa Maeda; Editing by Chris Gallagher)