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The Nuclear Regulation Authority accepted on Wednesday an assessment that a reactor at the Tsuruga plant in western Japan is sitting above an active fault, making it increasingly difficult for the facility to resume operation.
It is the first time Japan's regulatory authorities have acknowledged an existing reactor is located above a fault feared to move in the future, according to an NRA official. The judgment may leave plant operator Japan Atomic Power Co. with no option but to scrap the No. 2 reactor.
"We have received a report from a panel of experts that said there is an active fault...I think there is a need to accept the conclusion sincerely," NRA Chairman Shunichi Tanaka said at a meeting attended by other commissioners to discuss the panel's conclusion.
The NRA also decided to request that Japan Atomic Power study how the spent fuel pool inside the No. 2 reactor building would be affected in the event the fault moves.
Most of Japan's nuclear reactors are currently offline in the wake of the 2011 Fukushima Daiichi complex disaster, and they are required to undergo the NRA's safety assessment process to check whether they satisfy the new regulatory requirements to be introduced in July before they can resume operations.
In a press conference held later in the day, Tanaka acknowledged that the No. 2 reactor at the two-unit Tsuruga plant in Fukui Prefecture would face increasing difficulties to clear the NRA's safety review.
But he refused to make a clear statement on how the NRA will respond to Japan Atomic Power's application for a safety review, saying, "We do not deny that the conclusion (on the fault assessment) may change if new data show up. So I think I should not say anything decisive at this stage."
The panel, consisting of NRA commissioner Kunihiko Shimazaki and four outside experts, concluded last week that a zone of rock fragments called D-1, running directly beneath the No. 2 reactor, is an active fault, rejecting Japan Atomic Power's objections.
The panel also said the D-1 fault could move together with a confirmed major active fault called Urazoko, which is located about 200 to 300 meters from the No. 1 and 2 reactor buildings, and may affect facilities located above.
In quake-prone Japan, nuclear power plant operators are not permitted to build reactors and other important safety facilities directly above active faults -- currently defined as those that have moved in the last 120,000 to 130,000 years.
Responding to the latest development, Japan Atomic Power expressed criticism in a statement that it was "extremely inappropriate" that the NRA approved the panel's report without studying in detail the course of discussions.
The company also said that the NRA should discuss the issue again after seeing the outcome of its investigation at the plant, which is expected to continue by the end of June.
Major utilities holding a stake in Japan Atomic Power are closely watching how the issue unfolds, fearing the company may fall into negative net worth if it has to scrap the No. 2 unit because of a shortage of decommissioning funds and loss in asset value.
The company has set aside money for future decommissioning costs on the assumption the No. 2 reactor will operate for 40 years, but it has been operating commercially for only 26 years.
Restarting Japan Atomic Power's two other reactors is also unlikely to be easy, with the No. 1 unit at the Tsuruga plant known to be aging and a reactor at the Tokai No. 2 plant in Ibaraki Prefecture, eastern Japan, facing local opposition.
Japan Atomic Power is currently surviving on revenues such as basic fees from major utilities that have contracts to receive electricity.
But the utilities may not be able to offer support forever because they are also struggling amid increased fuel costs for thermal power generation to make up for the loss of nuclear power.