Just two years after the Fukushima nuclear accident, Shinzo Abe, Japan's prime minister, was gamely trying to make a virtue out of a catastrophic liability. Japan had a "duty" to share the lessons of the 2011 triple meltdown to the world, he said in Turkey, announcing a two trillion-yen public-private deal to construct a nuclear-power plant near the Black Sea.
Far from being mortally wounded by the Fukushima disaster, Mr Abe was betting that Japan’s battle-hardened nuclear industry could capitalise on it.
That bet looks increasingly shaky. With costs for the Turkey project running at more than twice their initial estimate, Itochu, a Japanese trading house and major investor, got cold feet. Last December, the Japanese government pulled the plug. This week, Hitachi suspended its involvement in the Wylfa nuclear power project in Wales, throwing Britain's energy plans into chaos.
It's just the latest setback for Japan's nuclear export industry. In 2016, Vietnam's government cancelled a plan by a consortium of Japanese firms that included Tokyo Electric Power (TEPCO, the operator of the ruined Fukushima Daiichi plant) to build a four-reactor plant in central Ninh Thuan Province, citing worries about safety and costs.
In 2017, Toshiba was forced to offload Westinghouse Electric, its bankrupt American nuclear arm. Only a decade before, after beating out General Electric for Westinghouse, Toshiba had giddily predicted its nuclear business would more than quadruple. Now it is out of the new reactor business for good. The company abandoned its British nuclear operations last November.
Fukushima's shadow hangs over these failures. Demands for safer plants have fuelled expensive overruns and sent investors fleeing. One of the few bright spots was Britain, where Hitachi was in talks with the government to build a two-reactor plant in Anglesey, on the coast of Wales (the Japanese conglomerate bought Britain's Horizon Nuclear Power Ltd in 2012).
Ominously, however, Hiroaki Nakanishi, Hitachi's chairman, took a begging bowl to 10 Downing Street last year, with the implicit threat of withdrawal from the project. The Conservative government responded by offering to underwrite two trillion yen, roughly two-thirds of the price tag, but it appears that wasn't enough. The Japanese company reportedly can no longer find investors. Hitachi has also pulled out of building of a nuclear power plant in Gloucestershire.
For years, Japan poured money into commercial nuclear power despite the accidents at Three Mile Island (1979) and Chernobyl (1986). By 2011, it had 54 operating reactors, and several more under construction or planned (Toshiba alone was a contractor or key component supplier for 20 of these reactors). That should have put it in pole position to harvest a global renaissance in atomic energy, but Fukushima has shaken the industry’s credibility, says Mutsuyoshi Nishimura, a former climate change negotiator for the Japanese government.
Competition is biting too. China, which accounts for about 40 per cent of the 70 nuclear plants under construction around the planet, is cheaper; Russia sweetens deals by putting up most of the initial financing for reactors and recouping costs by operating them over decades.
Whatever the route, getting plants up and running requires a massive leg-up from the state. The government-affiliated Japan Bank for International Cooperation (JBIC) was to have financed 70 per cent of the Turkey project. The bank is also on the hook for much of the 1.1 trillion yen in loans Japan has tagged for the Anglesey plant. Nippon Export and Investment Insurance, another state-backed outfit, would probably have guaranteed Japan's loans.
Much is at stake for both governments. Mr Abe views the project as the "biggest litmus test" of Japan's nuclear export policy, said an official with the ministry of economy, trade and infrastructure. Britain is keen to show that despite Brexit, it can still lure and keep big foreign investors: Panasonic, Sony and Toyota all have factories in Wales.
Japanese companies have not completely abandoned the nuclear field. Mitsubishi Heavy Industries is hoping to strike deals in India, which is wary of China. Toshiba is talking to Energoatom, a Ukrainian power company, to supply turbine generators for use in its nuclear plants. And in an interview last Friday, industry minister Hiroshige Seko said Japan's strategy of promoting nuclear exports will not change following Hitachi's decision in Britain.
Yet, Japan has yet to lead a nuclear project to completion overseas. At home, the industry will probably never recover from Fukushima, says Takeo Kikkawa, a nuclear analyst at the Tokyo University of Science. "Costs will certainly keep rising."
The Hitachi chairman, who is also head of Japan’s largest business lobby, the Keidanren, said at the start of this month the commercial opportunities for nuclear-plant manufacturers such as Hitachi were increasingly limited.
The upshot is that Japan’s nuclear industry is dying, says Kikkawa. “Everyone knows this, but nobody wants to admit it.”