Building Fukushima Daiichi: the move into nuclear power (1966)

The choice that secured supply, and its price

The core of this decision was that, against the ever-rising demand of the capital region, TEPCO chose to hold a capital-intensive base-load source — nuclear power — in its own hands. For a company that lacked good hydro sites and faced constraints on both the fuel and the siting of thermal plants, nuclear power looked like a rational way to secure supply over the long term. The framework of regional monopoly and cost-plus rate-making underwrote that vast initial investment and guaranteed its recovery. The start-up of Fukushima Daiichi, as the pioneer of commercial nuclear power in Japan, can be seen to have set the direction of TEPCO’s generation mix for decades. As a judgment of its time, it was a positive, forward move that answered the era’s demands.

And yet the stance of entrusting so much of the base load to a single technology was the flip side of a fragility that could shake the whole enterprise the moment capacity factors or safety wavered. Every shutdown — from data falsification to earthquakes — brought a loss to the books, and the 2011 accident exposed that fragility in its heaviest form. That a rational investment judgment made in the name of stable supply led, half a century on, to a crisis that put the company’s very existence in question suggests that the question of where to place the base load carries a reach that short-term profitability alone cannot measure.