Energy Policy 124 (2019) 180–198

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Energy Policy
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An analysis of the historical trends in nuclear power plant construction T

costs: The Japanese experience
⁎
Yuhji Matsuoa,b, , Hisanori Neib
a
The Institute of Energy Economics, 1-13-1, Kachidoki, Chuo-ku, Tokyo 104-0054, Japan
b
National Graduate Institute for Policy Studies, 7-22-1, Roppongi, Minato-ku, Tokyo 106-8677, Japan

A R T I C LE I N FO A B S T R A C T

Keywords: In this study, we collected Japanese nuclear power plant construction cost data from official documents sub-
Nuclear mitted by the electric utilities and conducted a quantitative analysis of the past trends. We found that the unit
Power generation cost construction cost of Japanese nuclear power plants rose during the period from 1975 to 1980, when the “im-
Econometrics provement and standardization” programs took place, and did not increase or decline significantly after that. We
Regression
also observed significant economies of scale, even if we take into account interest during construction, as well as
Interest during construction
the so-called overnight cost. As far as we know, this study is the first attempt to analyze the total history of
Japan's nuclear power generation until the Fukushima accident from the cost perspective. The findings could
contribute to a better understanding of the economics of nuclear power, as similar studies in the United States
and France tend to exhibit different results. The analyses in this study appear to reinforce the reliability of the
cost estimation by the Japanese government, which has been used as the numerical basis for the current energy
policies in Japan.

1. Introduction 49 GW were in operation. After the accident, however, they succes-

As in many other developed countries, nuclear power had long been
accounting for a considerable share in the power generation mix in
Japan. Since the launch of the Tokai nuclear power plant in 1966, the
nuclear power generation capacity continued to expand steadily,
reaching an output of 322 TWh in 2000, and accounting for 30% of the
total power supply. Behind this development was the growing re-
cognition that nuclear power can contribute greatly to a cheap and
stable power supply in the wake of the two oil crises in 1973 and 1979.
Moreover, after the early 1990s, when the climate change issue began
to attract international attention, nuclear power was also expected to
play a role as a large-scale low-carbon power source. In the "Long-Term
Energy Supply and Demand Outlook (recalculation)" published by the
Japanese government in 2009, the share of nuclear power in the power
generation mix was expected to expand to 42% by 2020 and to 49% by
2030. To achieve this, nine new nuclear reactors were supposed to be
constructed by 2020, and the average load factor, which was around
60% at that time, was expected to rise to the global average of 80%
(METI, 2009).
However, in the wake of the Fukushima Daiichi nuclear power plant
accident in 2011, the Japanese energy policy was forced to undergo
major changes. At the time of the accident, 54 nuclear reactors totaling
sively stopped operation after periodic inspections, resulting in the
cessation of all nuclear reactor operation after May 2012. In the same
year, the newly established Nuclear Regulatory Authority (NRA) for-
mulated new regulation requirements, and it was not until September
2015 when the first nuclear power plant, Sendai unit 1, passed NRA's
safety requirements and started operation. As of 2018, 15 reactors at 8
sites have passed the requirements and 9 reactors, i.e. Takahama-3 and
4, Ohi-3 and 4, Ikata-3, Genkai-3 and 4, and Sendai-1 and 2, have
started operation, although with some judicial troubles.
In the government's new "Long-Term Energy Supply and Demand
Outlook" published in 2015, the target of the nuclear power share in
2030 was set between 20% and 22% of the total power generation,
reflecting a major downward revision from the previous plan (METI,
2015). Meanwhile, new nuclear power plant construction plans have
been stagnant after the Fukushima accident, with no single reactor
newly starting operation after the Fukushima accident as of 2018. Ex-
isting reactors will have a lifetime of 40 years, which can only be ex-
tended to 60 years at the maximum. This means that if Japan is to
continue relying on nuclear power even after 2030, it would be ne-
cessary to restart new construction in the near future.
In the formulation of basic energy plans by the government, one of
the factors recognized as crucial has been the economic efficiency of

⁎
Corresponding author at: The Institute of Energy Economics, 1-13-1, Kachidoki, Chuo-ku, Tokyo 104-0054, Japan.
E-mail address: matsuo@edmc.ieej.or.jp (Y. Matsuo).

https://doi.org/10.1016/j.enpol.2018.08.067
Received 19 March 2018; Received in revised form 14 August 2018; Accepted 31 August 2018
0301-4215/ © 2018 Elsevier Ltd. All rights reserved.
Y. Matsuo, H. Nei
various power sources. Before the Fukushima accident, the
Subcommittee to Study Costs and Other Issues, established by the
government in 2004, estimated nuclear power generation costs at JPY
279 thousand/kW (USD 2580/kW) of unit construction cost and JPY
5.3/kWh (USD 49/MWh) of power generation unit cost, when assuming
a real discount rate of 3% and an average load factor of 80% (FEPC,
2004). After the accident, arguments that this estimation has not been
properly included the “hidden costs” of nuclear power, such as the costs
for research and development, public acceptance, and accident risks
arose among the public. To respond to this objection, the government
re-estimated the power generation costs extensively in 2011 and 2015
(Costs Verification Committee, 2011; Power Generation Cost Analysis
Working Group, 2015). In the 2015 estimation, the unit power gen-
eration cost of nuclear plants supposed to start operation in 2030 stood
at JPY 8.8/kWh (USD 83/MWh) and JPY 10.3/kWh (USD 97/MWh),
excluding and including policy costs, respectively, when assuming a
real discount rate of 3% and an average load factor of 70%, which was
still considered to prove the cost competitiveness of nuclear power
generation after the Fukushima accident, and was recognized as one of
the evidences to support the Outlook as mentioned above. In this esti-
mation, the unit construction cost of a nuclear power plant was as-
sumed to be JPY 370 thousand/kW (USD 3500/kW) with reference to
recently constructed plants in Japan, and on top of that, JPY 601 bil-
lion/unit (USD 5.7 billion/unit), which is roughly equivalent to JPY 50
thousand/kW (USD 470/kW), was assumed as the additional costs for
safety measures based on the actual expenses by the electric utilities to
meet the new regulation requirements by the NRA. This means that the
nuclear cost estimation by the government implicitly assumes that there
will be no cost escalation until 2030, other than the costs for the ad-
ditional safety measures which have already been revealed as actual
expenses. To assess the validity of this implicit assumption, it would be
indispensable to analyze the historical trends in nuclear power plant
construction costs in detail, and identify the factors influencing the
costs.
In this context, this study extracts Japanese cost data from docu-
ments by electric utilities (Electric Power Companies in Japan,
1959–2003), and conducts a quantitative analysis using them. It aims to
add another frame of reference to nuclear construction cost analysis
showing an example of the (as of early 2018) third largest nuclear fleet
after the United States and France, and to inform policymakers in
Japan, as well as in other countries. Its contributions to the literature
are as follows: First, this paper presents the costs of Japanese nuclear
power plants, both including and excluding interest during construction
(IDC). These data are based on the official documents submitted by the
electric utilities to the government, and as far as the authors know, they
are the first set of data made public in English that represent the total
history of Japan's nuclear power generation.
Second, the results of the analysis lead to conclusions different from
those of past studies: although the Japanese nuclear industry once ex-
perienced a cost hike in its history, the data exhibit a different trend
from the so-called "negative learning" or the continuous escalation of
the unit costs. Rather, we can see that unit construction cost in Japan
has been almost flat after 1990. The results of the analysis also indicate
that Japanese nuclear power plants show significant economies of scale.
Note that these two points are not contradictory because the ten
Japanese power utilities have been constructing nuclear reactors of
different size according to the demand scale. As described later, these
findings are in sharp contrast to the conclusions of similar studies,
which are mainly based on U.S. and French data.
Third, this study highlights the importance of estimating the
“overnight costs”, or the costs excluding IDC. Although it is obvious
that the costs including IDC represent the actual expenses by the uti-
lities, some studies estimate the costs of different power generation
technologies comparing the overnight costs (e.g., IAEA and NEA, 2015),
causing considerable controversy. We revisited this issue and argue that
the cost of Japanese nuclear power plants cannot be estimated properly
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Energy Policy 124 (2019) 180–198
without estimating their overnight costs.
The rest of the article is organized as follows: Section 2 presents a
brief literature review. Section 3 describes the data used and the
methodology. Section 4 presents the results of the analysis and a dis-
cussion of the results, while Section 5 provides the conclusion and
policy implications. The appendices include a detailed description of
the data and supplementary analyses, as well as some discussions re-
garding IDC and the correction of the cost data.
All the prices were converted to 2011 JPY before being used in
calculations, with USD prices also shown for reference. Since yen was
exceptionally strong in 2011 with an exchange rate of 80 JPY/USD, we
converted the prices to 2016 USD at 109 JPY/USD, to avoid misleading
the reader.
2. Literature review
The escalation of nuclear power plant construction costs has long
been pointed out in North America (Montgomery and Quirk, 1978;
Keng, 1985). Especially in the United States where much data has
widely been made public, the rise in nuclear construction costs has been
subjected to many studies (Mooz, 1979; Paik and Schriver, 1980;
Komanoff, 1981; Zimmerman, 1982; EIA, 1986; Cantor and
Hewlett, 1988; McCabe, 1996). While many studies observe reductions
in costs due to learning, it is also true that the nuclear construction cost
has actually been rising, and many studies attribute this escalation to
increasing regulations over time (University of Chicago, 2004). For
example, Komanoff (1981) analyzed 46 nuclear reactors constructed by
1978 and pointed out that the cost increase had been occasioned by the
application of “more stringent and explicit regulatory standards” during
the late 1960s and throughout the 1970s. The Three Mile Island (TMI)
accident that occurred in 1979 resulted in further strengthening the
safety regulations, and the rapid rise in the construction costs thereafter
has been repeatedly discussed (Koomey and Hultman, 2007; Cooper,
2010; Hultman and Koomey, 2013). Another point for discussion was
the economies of scale. Some of the studies observed this explicitly,
with the declining unit construction costs for larger power plants;
however, others did not find the effect significant. Even in the studies
where it was observed the effect was mixed. For example, Cantor and
Hewlett (1988) showed that the scale expansion has the effect of re-
ducing the unit cost on its own, but at the same time, it leads to pro-
longed construction lead time, eventually resulting in a rise in the unit
construction cost.
In France, unlike in the United States and unlike in Japan, which is
described later, detailed cost data of nuclear power plants had not been
disclosed until recently. Grubler (2010) estimated the costs based on
the annual expenditures for French PWR program from 1970 to 2000.
He observed a cost escalation of about a factor of 3.5 between 1974 and
the post 1990 period, and pointed out the “negative learning” effects
intrinsic in the nuclear industry. He also suggested that contrary to the
normal scale economies, the unit cost of a nuclear power plant rises
along with the scale, due to increasing technological complexity.
It was not until 2012 that the French government disclosed com-
prehensive information on nuclear costs in the country, including those
of plant construction (Cour des comptes, 2012, although Grubler, 2014
expresses doubt about the reliability of this information). Several ana-
lyses were performed based on this (Boccard, 2014; Escobar-Rangel and
Lévêque, 2015). According to Escobar-Rangel and Lévêque (2015), al-
though the construction costs of nuclear reactors certainly increased in
France, the rise was more moderate than that estimated by Grubler
(2010). It was also pointed out that the unit construction cost had been
increasing in France as the reactor design evolved, which, on the other
hand, had a significant effect on improving safety. In addition, while
learning effect can be seen within the same design, the unit cost rose
along with the scale, and based on this, small modular reactors (SMRs)
were regarded as a promising option that can contribute to reducing
capital costs.
Y. Matsuo, H. Nei
An analysis on the trend in the unit cost of nuclear power plants in
Japan was conducted by Marshall and Navarro (1991), who analyzed
the costs of 34 nuclear power plants constructed by the late 1980s. It
should be noted, however, that this analysis did not include the plants
that started operation after 1990, and as described later, Japan hap-
pened to experience great changes in the trends in nuclear costs right
around that year. For this and other reasons, this analysis should be
seen as only partly reflecting the Japanese experience. Meanwhile, as
the cost data for these 34 units were a rare example found in English
literature, the data were subsequently quoted in academic literature
and used for analyses (e.g. Sovacool et al., 2014).
Analyses including the data for the plants that started operation
after 1990 have hardly been conducted so far. This is probably because
of the fact that the open literature on the construction costs are avail-
able only in Japanese. Surprisingly, however, as far as the authors
know, even in the literature published in Japanese by Japanese re-
searchers, quantitative analyses of the cost trends until the Fukushima
accident have not been attempted, except for a preliminary analysis by
the authors of this article (Matsuo and Nei, 2018). This may be because
this issue has not been attracting the attention of policy makers and
researchers, nor has it been the subject of criticism by NGOs, as the
construction costs in Japan have not been escalating after the 1990s, as
described later, unlike in Europe and in the United States.
Relatively new analyses include MIT (2003), which used the “total
project cost” data for Onagawa-3, Genkai-3 and 4, and Kashiwazaki-
Kariwa-3, 4, 6, and 7, as provided by a Japanese analyst or taken from
annual reports by the utilities, and other relevant organizations. Du and
Parsons (2009) gathered construction costs of nuclear power plants that
began operations after 2003, i.e. Hamaoka-5, Higashi-dori, and Shika-2,
from press releases of the utilities and other sources, and used them for
analysis. With these recent data, however, it is not possible to reveal the
full historical trends in construction costs in Japan.
Lovering et al. (2016) probably represents the first attempt in the
literature published in English to show the trend of the construction
cost from the early stage of nuclear development in Japan up to the
Fukushima accident. The data used here were provided by one of the
authors of this article (Matsuo Y.), and are based on informal hearings
with the electric utilities. Fig. 8 in the paper is a clear visualization of
the trends in nuclear construction costs in Japan. This was a part of an
attempt to show the history of construction costs throughout the world,
and seems to have been successful in providing data from a wider range
of countries, not only the United States and France that have been
mainly studied so far. At the same time, from the viewpoint of an
analysis of the Japanese experience, it could be pointed out that the
data are based on informal hearings rather than published sources, and
that the paper only shows a trend in costs, and does not analyze
quantitatively the factor of the changes in the costs. In view of this, we
performed in this article quantitative analyses using official data taken
from published documents.
3. Data and methodology
3.1. Construction costs of nuclear power stations
We used the nuclear power plant construction cost data that appear
in genshiro secchi kyoka shinsei-sho (“Application document for reactor
installment license”) or genshiro secchi henkou kyoka shinsei-sho
(“Application document for the modification of reactor installment li-
cense”), referred to as the Application Documents hereafter (Electric
Power Companies in Japan, 1959–2003). A detailed description of the
data is found in Appendices B and C. It is worth mentioning that the
data include IDC, as well as other costs, which are usually referred to as
the overnight costs.
The impact of IDC on the economics of nuclear power plant con-
struction cannot be overstated. There has been considerable debate on
whether this should be included in the construction costs when we
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Energy Policy 124 (2019) 180–198
conduct analyses (Koomey et al., 2017; Gilbert et al., 2017; Lovering
et al., 2017). In general terms, no one objects to the fact that the cost
including IDC is the “true” cost for the utilities. On the other hand, it
also seems obvious that the best way is to separate these different costs,
if we can, and estimate them separately, since the costs that are directly
affected by the interest rates are quite different in nature from other
expenditures. In practice, however, this issue should be said to depend
on the data obtained.
This study estimated the real overnight cost ZO, the real IDC ZI, and
the real total cost ZT = ZO + ZI, according to the method shown in
Appendix C, using the reported construction costs. In the case of data
for Japan, unlike those for the United States which only report the total
mixed current costs, ZO is calculated in the first place from the reported
overnight costs and the assumed inflation rates. ZI and ZT are estimated
from ZO and the assumed interest rates. ZI is quite different in nature
from the other part of the construction costs, ZO, in that it pro-
portionally varies depending on the interest rates. Taking these situa-
tions into consideration, this study focused mainly on the real overnight
cost ZO, while also evaluating the total cost ZT. When calculating ZO, at
least two methods can be used; i.e. we can use varying values according
to Eq. (C.2) in Appendix C, or use fixed values according to Eq. (C.7).
We tried both methods.
The tables in the Application Documents only show the total cost
figures for some of the plants, i.e. Tomari-3, Higashi-dori, Hamaoka-3
and 5, Shika-2 and Ikata-3, although they are supposed to include IDC.
For these plants, we calculated ZI from the total cost and assumed in-
terest rates in the first place, and then estimated the IDC on the reported
base, RI, assuming the same ratio RI / ZI, which ranges from 0.4 to 0.8,
as other plants of the same utility.
Fig. 1 shows the trends in the share of IDC, i.e. the reported IDC RI,
divided by the reported total cost RT. The share is no higher than 15%
even in the highest case, Tokai Daini, and has considerably been de-
clining after 1990. This is mainly due to the decline in the interest rate.
The figure also shows that the ratio had been rising from 1970 to 1980,
while the interest rate had not been changed significantly. This is partly
because of the upward trends in the construction period, as shown in
Fig. 2. Some doubts remain, however, as the IDC ratio was not declining
during the period from 1980 to 1990, despite the downward trends in
the construction period.
In any case, these situations in Japan differ significantly from those
in the United States, where IDC is said to account for 46% of the total
construction cost (Gilbert et al., 2017). Especially, IDC has not exerted
any large influence on the total cost after 1990 in Japan because of the
low interest rates.
Fig. 3 shows the unit cost, i.e. ZO in 2011 real yen divided by the
gross capacity, versus the year of commercial operation. The unit costs
of the very first plants of both boiling water reactors (BWRs) and
pressurized water reactors (PWRs) are relatively high at around JPY
Fig. 1. IDC share and the prime lending rate.
Y. Matsuo, H. Nei
Fig. 2. Construction period of nuclear power plants.
Fig. 3. Trends in the unit construction cost of Japanese nuclear reactors. Note:
“I&S” indicates that the plant reflects the results of the I&S programs.
200 thousand/kW (USD 2690/kW), but the succeeding plants are less
expensive at below JPY 150 thousand/kW (USD 2020/kW). Re-
markably, the plants that started operation in and after the 1980s are
much more expensive than the former ones, showing a cost hike ex-
ceeding the increase in labor costs. On the other hand, we do not ob-
serve any escalation of unit costs for the plants that started operation
after 1990.
As shown in the figure, most of the plants that started operation
after 1984 reflect the results of the “Improvement and Standardization”
(I&S) programs which took place during FY 1975–1980 and thereafter,
led by the Japanese government, and aiming to achieve higher equip-
ment reliability and operational efficiency. For more details of the
program, the reader is referred to Appendix A.
At the same time, we note that the four plants before the programs,
which started operation in the 1980s, are more expensive than other
plants, showing almost the same level of unit costs as those of the plants
after the programs. These plants are Kashiwazaki-Kariwa-1 (construc-
tion start year: 1979 and operation start year: 1985), Fukushima Daini-
1 (construction start year: 1976 and operation start year: 1982),
Genkai-2 (construction start year: 1976 and operation start year: 1981),
and Ikata-2 (construction start year: 1977 and operation start year:
1982), in the order of unit cost from the highest. As discussed in
Appendix B, these “transitional” reactors are characterized by large
escalation in construction costs during the period of ongoing I&S pro-
grams, although they do not fully reflect the results of the programs.
Out of all the 56 LWRs, 36 reactors had higher unit costs above JPY
200 thousand/kW, of which only four reactors were designed before the
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Energy Policy 124 (2019) 180–198
I&S program. On the other hand, there is no reactor designed after the
program with lower unit cost than JPY 200 thousand/kW. Welch's t-test
shows that the reactors designed after the program had significantly
higher unit costs than those before the program, with a t-value of 8.50
and a p-value of 1.56 × 10–11. This means that with strong confidence,
we can say that any factor without explicit correlation with the I&S
program cannot be thought of as being the major reason for the his-
torical cost changes of Japanese nuclear power reactors, although we
cannot deny the possibility that some other event happening in the
same period, such as possibly any regulation changes or the revision of
the Building Standards Act, as described below, may partly had been a
cause of the changes. We should also note that only the first phase of
the I&S program, which lasted from FY 1975–1977, seems to have had a
great influence on the construction costs, while the effects of the second
and third phases cannot be seen obviously.
The Building Standards Act has been successively revised since its
enactment in 1950. One of the largest revisions was made in 1981, in
the wake of the Miyagi-ken-oki earthquake that took place in 1978.
Although the nuclear cost escalated prior to this revision, we cannot
deny the possibility that the plant manufacturers foresaw this revision
and reflected it in the plant designs.
3.2. Other data
Other data used as explanatory variables in this study include the
following.
3.2.1. Labor cost and material prices
Changes in construction costs are thought to reflect the changes in
labor costs and material prices. Annual wage per capita showed a re-
markable rise in Japan, from nominal JPY 1004 thousand/person (USD
2790/person with an exchange rate of 360 JPY/USD) in 1970 to JPY
4783 thousand/person (USD 33,000/person with 145 JPY/USD) in
1990 (EDMC, 2017), which means that unit labor cost almost doubled
in terms of real JPY during this period. This study used this unit labor
cost in 2011 real Japanese yen, which has already been shown in Fig. 3,
as one of the explanatory variables.
On the other hand, the prices of steel, cement, and other construc-
tion materials roughly escalated in line with the general price level
(Research and Statistics, Department Bank of Japan, 2017). For this
reason we did not use these prices as explanatory variables in this
study.
3.2.2. Power generating capacity
The unit costs of large-scale facilities usually decline with increasing
scale. The effect of this “economy of scale”, however, is controversial
for nuclear facilities, as previously stated. Fig. 4 shows the relation
Fig. 4. Dependence of the unit cost on the capacity.
Y. Matsuo, H. Nei
between the unit overnight cost and the gross power generating capa-
city. A mild decline in the unit cost might be observed in line with the
capacity. The two BWR units before the I&S program, shown as purple
squares, with higher unit costs, represent the “transitional” reactors
Kashiwazaki-Kariwa-1 and Fukushima Daini-1.
The significance of this correlation will be discussed later in Section
4.
3.2.3. Plant construction experience
Past experience of construction, which is in some cases equivalent to
time trends, is considered to be a factor that can have a significant
influence on the construction cost. It is widely known that the costs of
manufacturing usually decline due to learning effects, as obviously seen
in the case of solar photovoltaic panels. In the case of nuclear facilities,
several studies observe similar effects of learning by doing (University
of Chicago, 2004; Jungler et al., 2008), while other studies conclude
that nuclear power is cursed with “negative learning” (Grubler, 2010),
showing increasing costs over time.
In this study we used the experience of reactor construction,
quantified as the number of the plants previously constructed, as an
explanatory variable. We can count the “experience” in many ways, e.g.
by counting the number of LWRs, or that of BWRs and PWRs separately,
or that of the plants constructed by one specific manufacturer.
3.2.4. Construction period
The construction period is usually regarded as a major factor in-
fluencing the cost. Not only the IDC, but also the overnight cost itself is
influenced by the construction period (Harris et al., 2013). We used the
period from the Construction Start Date by IAEA-PRIS, although
somewhat different from the JAIF data as described in Appendix B, to
the Commercial Operation Date by IAEA-PRIS. As can be seen in Figs. 2
and 5, the construction period of Japanese nuclear power plants has
been stable at around five years, and its influence on the unit cost
cannot be seen clearly.
3.2.5. Construction lead time
The construction cost may depend on the frequency with which the
power plants are built. If plants of the same type are built frequently,
short-term learning may lower the cost, while a prolonged interval may
result in higher costs. To estimate this effect, we used the construction
lead time, defined as the period from the construction start date of the
previous reactor to that of a specific reactor, measured separately for
BWRs and PWRs. Fig. 6 plots the construction unit cost versus the lead
time. The PWR with an exceptionally long lead time is that of Tomari-3
(construction start year: 2004), constructed twelve years after Genkai-4
(construction start year: 1992).
Fig. 5. Relationship between the construction period and the unit construction
cost.
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Energy Policy 124 (2019) 180–198
Fig. 6. Construction lead time of Japanese nuclear reactors.
3.2.6. The effect of seismic safety standards
Since Japan is a highly seismic country, particular attention has
been paid to the issues of seismic safety since the early stages of nuclear
development. In 1978, the Atomic Energy Commission formulated the
“Regulatory Guide for Reviewing Seismic Design of Nuclear Power
Reactor Facilities”, which defines the Maximum Design Earthquake
Ground Motion (S1) and the Extreme Design Earthquake Ground
Motion (S2) as the Design Basis Earthquake Ground Motions that the
plant designs should take into account. The magnitude of S1 is de-
termined based on historical earthquake records and active faults, while
S2 is stronger than S1 and considered as equivalent to the earthquake
that could have the largest effect at the site, which is determined based
on seismological theory. In 2006, the Nuclear Safety Commission re-
vised the Regulatory Guide to integrate S1 and S2 into one Design Basis
Earthquake Ground Motion SS, and to additionally formulate the
Elastically Dynamic Design Earthquake Ground Motion Sd. After the
Fukushima accident, the seismic standards have been thoroughly re-
viewed by the NRA. Since it could be thought that S1 and S2 assumed in
the plant designs had been affecting the construction costs, we used
these data as explanatory variables.
3.2.7. Reported number of accidents and failures
Higher safety is always aimed for when improving nuclear plant
designs. Although it is not easy to quantify the risk of major nuclear
accidents due to the very low frequency of such events, it is possible to
measure plant safety with a certain level of confidence by the fre-
quencies of minor accidents and failures.
This study referred to the reported number of accidents and failures
listed in JNES (2013) to assess plant-level safety. Fig. 7 shows the
tendency that newer reactors report smaller numbers of accidents and
Fig. 7. Reported number of accidents and failures.
Y. Matsuo, H. Nei Energy Policy 124 (2019) 180–198

prior to a plant. Mainly to avoid the multicollinearity with the labor

Fig. 8. Average load factor.
failures, although large fluctuations can be seen for the latest reactors,
due mainly to the fact that these have experienced only a small number
of years of operation.
3.2.8. Load factor
As mentioned above, one of the targets of the I&S program was to
achieve higher load factors. Fig. 8 shows the average load factor up to
the Fukushima accident against the year of first commercial operation.
The load factor is higher for the reactors designed after the program
than for those before that. We must be careful, however, in judging this
effect, and a more detailed discussion is provided in Section 4.
3.3. Methodology
Based on the discussion in the previous sections, the unit cost is
regressed by the following equation.
lnUCi = a0 + a1lnCAPi + a2lnLCi + a3lnEXPi + a4 lnCPi + a5lnLTi
+ a6lnSi + a7 PFi + a8 dumTRi + a9 dumISi + a10 dumTYPEi
+ a11 dumFOAKi + ui (1)
where
cost LC, we used the cumulative plant number before and after the first
phase of the I&S program separately.
dumTR is a dummy variable with value 1 if the plant is one of the
four “transitional” ones as described previously, and zero otherwise.
dumIS takes value 1 if the plant was designed after the I&S program.
Since the program took three phases, we considered three dummy
variables corresponding to each phase.
dumTYPE takes 1 if the plant is of a certain type, and zero otherwise.
As the “type” we differentiated the two plant types (BWR or PWR), the
three manufactures (MHI, Toshiba and Hitachi), and twin plants.
dumFOAK takes 1 if the plant is the first one, and zero otherwise. We
considered two dummy variables representing the first BWR or PWR
reactor, and the first BWR or PWR reactor constructed by a domestic
manufacture. These variables measure the learning effect in the very
first stage of nuclear development, in contrast to EXP which measures
the learning effect in the longer term.
After repeated trials using these many explanatory variables, we
reconstructed the "standard model" only with those which significantly
affect the unit cost. The following part of this paper mainly focuses on
this standard model. The results of the analyses including other vari-
ables are shown in Appendix D.
4. Results and discussion
4.1. Standard model
Since Fig. 3 strongly suggests that some event(s) that took place
exactly during the period of the first I&S program was the major factor
influencing the unit cost, we used dumIS123, a dummy variable with
value 1 if the reactor was designed after the first phase of the program,
in the standard model. We also used dumPWR, which takes 1 if the
reactor is a PWR. Since all the reactors analyzed in this study belong to
either BWR or PWR, we could use dumBWR representing BWRs to ob-
tain exactly the same results. dumFOAK takes 1 if the reactor is either
the first BWR (Tsuruga-1) or the first PWR (Mihama-1). We omitted
EXP, CP, LT, S, or PF in the standard model, as none of these variables
had significant effects. Thus the standard model is formulated as fol-
lows:
lnUCi = a0 + a1lnCAPi + a2 lnLCi + a3 dumTRi + a4 dumIS123i
+ a5 dumPWR i + a6 dumFOAKi + ui (2)

UCi: Unit construction cost in 2011 JPY thousand/kW. The unit cost UC, which is the overnight cost ZO divided by the gross
CAPi: Gross capacity in MW. capacity, was calculated in two ways, using varying expected inflation
LCi: Labor cost in 2011 JPY thousand/person-year. rates (Eq. (C.2) in Appendix C), as well as fixed rates (Eq. (C.7)). The
EXPi: Construction experience in units. results are shown in Tables 1, 2. The values in the tables are hetero-
CPi: Construction period in years. skedasticity-consistent ones using the methods of White (1980). The
LTi: Construction lead time in years. symbols ***, **, *, and † in the tables throughout the paper indicate
Si: Design Basis Earthquake Ground Motion (S1 or S2) in Gals. that the coefficients are significantly different from zero at the 0.1%,
PFi: Indexes showing performances of the reactor, i.e. the number of 1%, 5%, and 10% levels, respectively.
reported accidents and failures in 1/reactor-year, or the load factor In this standard model, all the explanatory variables are significant
in percentage points. at the 10% level, irrespective of the method used to calculate the real
dumTRi: Dummy variable representing transitional plants.
dumISi: Dummy variable representing the plants designed after the I Table 1
Result of the regression analysis of the overnight unit cost (Standard model,
&S programs.
variable inflation rates).
dumTYPEi: Dummy variable representing the plant type.
dumFOAKi: Dummy variable representing the first-of-a-kind status. Coef. Std. error t-value p-value
ui: Error term. *
Constant 3.80 1.55 2.45 1.77E− 02
ln CAP − 0.24** 0.08 − 2.87 6.00E− 03
UC is calculated as the overnight cost ZO measured in 2011 real ln LC 0.34† 0.18 1.89 6.52E− 02
Japanese yen divided by the gross capacity CAP. We additionally con- dumTR 0.52** 0.18 2.90 5.57E− 03
ducted an analysis on the real total cost divided by the capacity, ZT / dumIS123 0.67*** 0.11 6.07 1.81E− 07
dumPWR − 0.10* 0.04 − 2.44 1.85E− 02
CAP.
dumFOAK 0.39** 0.12 3.32 1.72E− 03
As EXP, we considered the number of total LWRs, that of BWRs and Adjusted R2 0.812
PWRs, and that of the plants constructed by the three manufactures,

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Table 2 asserted by Marshall and Navarro (1991), the construction costs of

Result of the regression analysis of the overnight unit cost (Standard model, Japanese nuclear power plants show economies of scale, even if IDC is
fixed inflation rates). included. Although it is quite reasonable that large-scale facilities such
Coef. Std. error t-value p-value as nuclear power plants are susceptible to economies of scale, this could
be regarded as one of the striking results of the analysis, taking into
Constant 3.06* 1.45 2.11 4.02E− 02 account that similar studies in the United States and France tend to
ln CAP − 0.24** 0.09 − 2.74 8.66E− 03
exhibit the opposite results.
ln LC 0.44* 0.18 2.50 1.59E− 02
dumTR 0.35† 0.18 1.96 5.61E− 02 The coefficients are larger for dumTR and dumIS123 in Table 3 than
dumIS123 0.52*** 0.10 5.01 7.58E− 06 in Table 1. This reflects the fact that the average plant capacity is larger
dumPWR − 0.10* 0.04 − 2.53 1.45E− 02 for the plants designed after the I&S program than those designed be-
dumFOAK 0.36** 0.11 3.19 2.50E− 03
fore that.
Adjusted R2 0.769

4.2. Other models

overnight cost. Thus, we can say that the unit construction costs of
Japanese nuclear power plants were initially at relatively high levels as
first-of-a-kind reactors and soon declined thereafter. The most influ-
ential event took place during the period from 1975 to 1980, which
exactly corresponds to the I&S program. The regression results indicate
that the unit cost rose by some 70–100% (50–120% if the range of the
standard errors is considered) during this period. The plants that belong
to the “transitional” period right before the I&S program, also saw cost
increases to a smaller extent. The unit labor cost, which almost doubled
from 1970 to 1990, resulted in a cost increase of 26–36% (12–54% if
the standard errors are considered).
The coefficient of lnCAP is significantly negative, indicating mod-
erate economies of scale as shown in Fig. 4, with some 10–20% declines
with a doubling of the capacity.
The significance of the coefficient of dumPWR indicates that PWRs
have been cheaper than BWRs on average, although some of the BWRs
were cheaper than PWRs of the same size, as can be seen in Figs. 3 and
4. We should also note that since Japanese utilities have exclusively
selected BWR or PWR, this variable might reflect factors other than the
technology itself, such as regional differences. The comparison between
the two technologies requires more detailed analysis.
The results using fixed, rather than varying expected inflation rates,
shown in Table 2 compared to Table 1, indicate smaller coefficients of
dumIS123 and dumTR and larger coefficients of LC. This mainly reflects
the relatively high inflation rates until 1980, which declined rapidly
thereafter. They result in lower calculated ZO values for the plants
whose Application Document was submitted in the late 1970s, which
happens to be the period of the first and second phases of the I&S
programs.
Taking into account the higher adjusted R2 value, we used varying
expected inflation rates in the analyses described hereafter, although
both methods do not lead to a significant enough difference to the re-
sults to draw different policy implications.
Table 3 shows the result of the analysis using the total cost ZT, in-
stead of ZO, divided by the gross capacity, as the unit cost UC in Eq. (2).
All the explanatory variables are significant at the 10% level.
Special attention should be paid to the coefficient of lnCAP, which is
significant at the 5% level, although the coefficient is slightly nearer to
zero at −0.20, compared to −0.24 in Table 1. In contrast to what was
Regression analyses adding one or more explanatory variable(s) to
the standard model, using ZO and varying inflation rates, exhibit in-
significance of the added variable(s). Of these, the most striking result is
the insignificance of EXP, although easily foreseen from Fig. 3. An
overview of the results follows:
4.2.1. Construction experience, period and lead time
As the plant construction experience, we considered EXPt, EXPbp,
and EXPm, which represent the number of reactors constructed in
Japan, as BWRs or PWRs in Japan, and by each of the manufacturers,
respectively. We also considered the construction period CP, and the
construction lead time LT, as stated above. None of the coefficients of
these variables were significant, as shown in Appendix D.1.
As can be seen from these results, learning effects could be seen only
at the very first stages, and no learning can be observed after that. At
the same time, as opposed to what is often asserted in studies for the
United States and France, we can see no “intrinsic” negative learning
effect in the case of the Japanese nuclear industry.
As for the construction period, it should be noted that the data
distribute within a relatively narrow range of around 5 years. In cases of
longer-term construction, such as Olkiluoto-3 in Finland, which has
been under construction for over 10 years, the factor could affect the
construction costs.
Lead time does not show a significant effect, either. This means that
the technology does not lose competitiveness by an absence of several
years. It could affect the costs, however, if the lead time expands to
several decades as in the case of the United States and other Western
countries.
4.2.2. Impact of the I&S programs
Fig. 3 seems to show no cost escalation after the first I&S program,
while the average of the unit costs of the four ABWRs reflecting the
third I&S program is lower than those of other reactors. We analyzed
two dummy variables dumIS23 and dumIS3, which take 1 if the plant
was designed after the second and third I&S programs, respectively. The
results indicate the significance of neither of these variables (Appendix
D.2). As we can see from these results, while nuclear plant cost esca-
lation usually takes place with design improvements, such improve-
ments do not always result in cost escalation.

Table 3 4.2.3. Plant manufacturer and the first-of-a-kind status

Result of the regression analysis of the total unit cost (Standard model, variable
An analysis using dumM, which represents the plants constructed by
inflation rates).
Mitsubishi Heavy Industries, instead of dumPWR in the standard model,
Coef. Std. error t-value p-value shows a significantly negative coefficient of the variable (Appendix
*
D.3). This is a matter of course because the company has exclusively
Constant 3.59 1.60 2.25 2.91E− 02
ln CAP − 0.20* 0.09 − 2.23 3.05E− 02 been constructing PWRs in Japan. On the other hand, the dummy
ln LC 0.34† 0.18 1.87 6.78E− 02 variables dumT and dumH, representing Toshiba and Hitachi, respec-
dumTR 0.60** 0.20 2.99 4.41E− 03 tively, which have been in charge of the construction of BWRs, do not
dumIS123 0.77*** 0.11 6.79 1.40E− 08 influence the cost significantly.
dumPWR − 0.10* 0.04 − 2.33 2.38E− 02
In addition to dumFOAK in the standard model, we considered
dumFOAK 0.42** 0.12 3.45 1.16E− 03
Adjusted R2 0.831 dumFOAKd, which takes 1 if the plant is the first BWR or PWR con-
structed by a domestic manufacturer, and is shown to have no

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Y. Matsuo, H. Nei Energy Policy 124 (2019) 180–198

significant influence on UC. This seems to be because the three do-

mestic manufacturers inherited the technologies from GE and WH in the
early stages, and when the three manufacturers started to construct
their own reactors, they had already acquired considerable experience.

4.2.4. Twin plants

dumTWIN, which takes 1 if the plant is one of the twin plants, does
not have a significant influence either (Appendix D.4). Thus, at least
from the Japanese experience, we cannot assert that twin plants are
more cost-effective than single plants.

4.2.5. Seismic safety standards

The Maximum Design Earthquake Ground Motion (S1) and the
Extreme Design Earthquake Ground Motion (S2) do not exert significant
Fig. 9. Trends in annual load factors before and after the I&S program.
influence on the unit cost (Appendix D.5). This may seem surprising
considering the importance of seismic standards for Japanese nuclear
facilities. However, since the main components of a nuclear power plant
have been proved to maintain integrity under very severe conditions
(Ohtani et al., 1992; JNES, 2006), seismic standards affect only a re-
latively minor part of the total system, such as ventilation towers, for
example. We should note that this does not mean that increased safety
measures are not expensive in the future, as those measures usually
include substantial revisions to the system, in addition to what result
from different S1 or S2.

4.2.6. Safety index and load factor

Neither INC, which indicates the reported number of accidents and
failures by JNES, nor LF, which is the average load factor by 2010,
shows a significant influence on UC (Appendix D.6).
Conversely, we estimated the influence of the I&S programs on these
indexes as follows. As for INC, we used the following equation assuming
a Poisson distribution

e−λλk
p (INC=k ) ∝ , lnλ = b0 + b1 dumIS123
k! (3)

where b0 and b1 are parameters (Table 4). The result is significant,

showing that the I&S program actually reduced the number of accidents
and failures by a factor of exp(-0.909)= 0.40, from 0.37 to 0.44 if
taking the standard error into account.
As mentioned in Section 3, the reactors designed after the I&S
programs exhibit higher load factors than the previous ones. We should
be careful, however, in concluding that this proves the higher perfor-
mance of these reactors. In the United States, for example, newly con-
structed reactors have higher average load factors than older ones.
However, Koomey and Hultman (2007) argue that this does not prove
the better performance of the new reactors. Rather, they posit that this
is because of the overall operational improvements of the US reactors.
The load factors of new plants are higher only because they started
operation after the operational improvements, and if we compare the
load factors during the same time periods, old and new reactors make
no significant differences.
In contrast, the reactors after the I&S program in Japan show higher
load factors than the older ones, as shown in Fig. 9, even if we compare
the performances during the same period. The two steep declines after
2000 correspond to TEPCO's scandal in 2002, when all the nuclear
power stations of the company temporarily stopped operation, and the
Niigata-ken Chuetsu-oki earthquake in 2007, when Kashiwazaki-
Table 4
Results of the regression analysis of the reported number of accidents and
failures.
Coef. Std. error t-value p-value
Constant − 0.396*** 0.042 − 9.54 < 2e− 16
dumIS123 − 0.909*** 0.088 − 10.28 < 2e− 16
Fig. 10. Distribution of annual load factor after 1985.
Kariwa nuclear power plant stopped operation.
Fig. 10 shows the frequencies of annual load factors of all the nu-
clear power plants in Japan, from 1985 to 2006 for Kashiwazaki-
Kariwa-1–7 which stopped operation after the 2007 earthquake, and
from 1985 to 2010 for other reactors, rounded to the nearest percentage
point. The average load factor of the reactors after the I&S programs is
higher at 75%, than that of the other pre-I&S reactors at 70%.
We can test the significance of this difference by a simple t-test,
which shows a t-value of 3.95 and a p-value of 8.26 × 10−6, indicating
that the plants designed after the I&S programs have significantly
higher load factors than the previous ones.
In sum, we cannot find a simple correlation between the cost of a
reactor and its performance. What makes a reactor safer and more ef-
ficient is the modification of the design, which explicitly aims for such
improvements, an example of which is the I&S programs in the case of
Japanese nuclear development.
5. Conclusions and policy implications
In this study we quantitatively analyzed the historical trends in
Japanese nuclear power plant construction costs, using data from the
Application Documents submitted by the electric utilities. The most
striking finding is that the unit cost of nuclear reactors in Japan did not
show a significant change after the I&S programs that took place during
1975–1980 until the Fukushima accident in 2011. As described in
Section 2, many studies have mentioned the historical escalation in
construction costs for nuclear power plants in Western countries. In the

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United States and France, such cost increases have usually been at-
tributed to increasing regulations and/or design improvements. Al-
though the Japanese experience is similar to the French in that the cost
escalation seems to be related to design improvements, it has also been
demonstrated that plant design changes do not always result in cost
hikes, and that unit costs can remain roughly unchanged for decades.
Thus we cannot observe negative learning effects “intrinsic” to nuclear
power, but we should rather consider that cost escalation trends differ
largely by country. A wider set of data, including the costs in other
countries, must be analyzed to draw general conclusions.
In the case of Japan, this study suggests that it is not reasonable to
expect any large declines or escalations other than the explicit effects
arising from expected design changes. The 2015 cost estimation by the
government (Power Generation Cost Analysis Working Group, 2015)
assumes the unit cost of nuclear reactors that start operation in 2030 at
JPY 370 thousand/kW (USD 3490/kW) in 2014 real yen plus additional
safety measurement costs of JPY 50.1 thousand/kW (USD 470/kW).
The latter refers to the actual expenses by the utilities to meet the new
regulation requirements, and seems to be a reasonable estimation as the
additional cost for safer nuclear plants constructed in the future. The
former refers to the costs of the recently constructed reactors. From the
results of this study, it can be concluded that adding these two cost
components is a reasonable way to obtain a future cost assumption.
At the same time, we must note that after the Fukushima accident, it
may be difficult to build a new nuclear power plant in Japan at least in
the near future. As shown in Fig. 6, Japan has once experienced an
extension of lead time of over 10 years that did not influence the plant
construction costs. However, we cannot deny the possibility that if the
lead time would extend to several decades, the cost might increase, as
in the cases of Europe and the United States.
The fact that Japanese nuclear reactors exhibit economies of scale
even including IDC is also important. Japanese electric utilities have
constructed nuclear reactors ranging from medium to large size ac-
cording to the demand scale. However, the overall tendency is to
construct larger reactors, in line with technological improvements.
Since nuclear facilities are susceptible to economies of scale, it would be
reasonable to construct larger LWRs in the future rather than small
modular reactors, at least in a country with a large electricity demand
like Japan.
At the same time, we should also pay attention to Japan's low in-
terest rates after the 1990s, which could have been an important factor
behind the significant economies of scale. The analysis also suggests
that one major reason for the stable cost trend after the 1990s could be
found in the fact that the Japanese manufacturers have been con-
structing nuclear power plants with a stable construction period of
around five years, which was not the case in the United States, for
example. We cannot deny the possibility that large-scale plants may
lose relative competitiveness in the event of higher interest rates or
longer construction periods, as suggested by Western studies. In this
regard, we should keep in mind that energy policies aiming to develop
large-scale LWR programs must strive to facilitate funding as well as
mitigate political and socio-economic risks. In the case of Japan, the
foreseeability of the permission and construction processes seems to be
particularly important for future nuclear development, given that the
three nuclear power plants that were under construction at the time of
the Fukushima accident have not yet started commercial operation as of
2018, due mainly to delayed permission processes for complyance with
the new regulatory standards. Electricity market liberalization, which
has been rapidly progressing follwing the Fukushima accident, could
also affect the investment risks of nuclear energy. Since it is highly
uncertain whether the policy measures already enacted in Western
countries, such as loan guarantee and FIT-CfD, would work well in
Japan, this issue is left as an important political challenge for the future.
It could be thought that the FOAK effect observed in this study, i.e.
the cost decline in the very early stage of nuclear development, may
provide some implications to foreign counties. That is, at least a part of
the recent cost increase in Western countries, where nuclear power
plants are being constructed after several decades of suspension, may be
mitigated if several reactors are constructed continuously in the future.
The coefficient of dumFOAK in Table 1, which is 0.39 ± 0.12, indicates
that early learning could reduce the cost by a factor of one third.
However, if the construction cost of Hinkley Point C in the United
Kingdom, which is said to be as high as 6300 pounds per kW,1 is re-
duced by 33%, it is still at a very high level. We should consider that the
overall situations are quite different between Japan in the 1970s and
Western countries with mature nuclear industries. An analysis of recent
cost escalation in Europe and in the United States is beyond the scope of
this study.
Although this study tried to analyze the cost trends of Japanese
nuclear power plants throughout history, more detailed analyses of
several factors, including the cost difference between BWRs and PWRs,
are called for in the future. Also, Lovering et al. (2016) suggests that the
experiences of countries other than the United States, France and
Japan, for example Korea or India, may show quite different trends.
Conducting detailed quantitative analyses with larger data sets is an
important challenge in considering the economics of nuclear power
generation.
Acknowledgment
This study was partly supported by the Environment Research and
Technology Development Fund (2–1704) of the Environmental
Restoration and Conservation Agency of Japan.

Appendix A. History of Japan's nuclear power plant development

A.1 Early stages of nuclear development

Following the start of civil nuclear programs in Western countries after World War II, the Atomic Energy Basic Act was enacted in Japan in 1955.
After 1957, research reactors, including Japan Research Reactor (JRR)-1–4, were constructed, and in 1963, the Japan Power Demonstration Reactor
(JPDR, 12.5 MW) started operation in the Japan Atomic Energy Research Institute (JAERI). General Electric (GE) of the United States designed the
plant, and domestic manufacturers, including Hitachi, Ltd., mainly produced the equipment.
In parallel therewith, to construct and operate a commercial nuclear reactor, the Japan Atomic Power Company (JAPC) was established in 1957.
JAPC adopted the UK-designed gas cooled reactor (GCR) for the Tokai nuclear power plant (166 MW), which started operation as the first com-
mercial nuclear reactor in Japan in 1966. The construction was promoted mainly by GE UK and the domestic Fuji Electric group.
Designs of light water reactors, including both BWRs and PWRs, were adopted for the second commercial reactor and thereafter. JAPC proceeded
with the construction of a BWR by GE and Hitachi group, and in 1970, Tsuruga power station unit 1 (357 MW) commenced operation. Following the
construction of JAPC's plants, nine out of the 10 general electric utilities also selected either BWR or PWR to construct and operate commercial
nuclear reactors. In 1970, the same year as Tsuruga-1, the Kansai Electric Power Co., Inc. started the operation of Mihama power station unit 1 (PWR,

1
https://www.theguardian.com/uk-news/2017/jul/03/hinkley-point-c-is-22bn-over-budget-and-a-year-behind-schedule-edf-admits.

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340 MW) constructed by Westinghouse (WH) and the Mitsubishi Group, and in 1971 the Tokyo Electric Power Co., Inc. (TEPCO) started operation of
the Fukushima nuclear power plant (later Fukushima Daiichi nuclear power plant) unit 1 (BWR, 460 MW) constructed by GE and Toshiba group.
After that, each utility proceeded with the construction of nuclear power plants throughout the country, and, taking over from the original man-
ufacturers GE and WH, Hitachi and Toshiba for BWR and Mitsubishi Heavy Industries (MHI) for PWR became responsible for plant design and
construction.

A.2 “Improvement and Standardization” (I&S) programs

In this way, Japan started its nuclear program with the introduction of British and US technologies, and later established a mass construction
system by the three domestic manufacturers. Subsequently, led by the Ministry of International Trade and Industry (MITI), the I&S programs were
launched to improve the suitability of the designs for Japan, aiming to achieve higher equipment reliability and operational efficiency and to lower
workers’ radiation exposure, among other improvements. The first phase of the program, which started in FY 1975, selected four reactor types, i.e.
the 800 MW-class and 1100 MW-class for both BWR and PWR, and aimed to contribute to improvements with such methods as the enlargement of
reactor vessels and plant automation. The second phase of the program, which started in FY 1978, aimed for the overall improvements of plant
design and systems based on the results of the first phase, attempting to establish the “Japanese type LWR” design. Numerical targets were also set,
such as improvements in the average load factor up to 70% in the first phase and 75% in the second phase, respectively. The results of the first phase
were fully reflected in Fukushima Daini-1 (BWR, 1100 MW, construction start year: 1979) and Sendai-1 (PWR, 890 MW, construction start year:
1979) and later reactors, whereas the results of the second phase were adopted for Kashiwazaki-Kariwa-2 (BWR, 1100 MW, construction start year:
1983) and Genkai-3 (PWR, 1180 MW, construction start year: 1985) and later reactors.
In FY 1981, the third phase of the I&S program was launched, aiming for even greater safety and reliability, as well as improvements in economic
efficiency. The results of this phase were reflected in the advanced boiling water reactor (ABWR) and the advanced pressurized water reactor
(APWR) designs. The ABWR design has been adopted for four reactors, i.e. Kashiwazaki-Kariwa-6 and 7 (1356 MW each, construction start years:
1991 and 1992, respectively), Hamaoka-5 (1380 MW, construction start year: 1999), and Shika-2 (1206 MW, construction start year: 1999). On the
other hand, no APWR plant has been constructed so far.
Before the Fukushima accident in March 2011, a total of 57 commercial reactors had been built and had started operation in Japan, with one
GCR, 32 BWRs including 4 ABWRs, and 24 PWRs. Among them, the Tokai Power Station (GCR, 166 MW) stopped operation in 1998, and Hamaoka-1
and 2 (BWR, 540 and 840 MW) stopped operation in 2009. After the Fukushima accident, Fukushima Daiichi-1 to 6 (BWR, 460–1100 MW), Tsuruga-
1 (BWR, 357 MW), Mihama-1 and 2 (PWR, 340 and 500 MW), Ohi-1 and 2 (PWR, 1175 MW each), Shimane-1 (BWR, 460 MW), Ikata-1 and 2 (PWR,
566 MW each), and Genkai-1 (PWR, 559 MW), a total of 15 units, stopped operation.

Appendix B. Data used in the study

B.1 Cost data in the application documents

Marshall and Navarro (1991) used data from dengen kaihatsu no gaiyou (“Overview of power plant development”) by MITI. This was an annual
publication by the Japanese government in Japanese that contained cost data for all the thermal, hydro and nuclear power stations that were under
construction or planning, starting from the 1950s (although early publications were named differently as dengen kaihatsu no genjou, “Current status of
power plant development”) up to 1994 (MITI, 1961–1999). The cost figures had been repeatedly revised over time, exactly reflecting the changes in
the plant designs and the construction status, and Marshall and Navarro (1991) explained that they used the final figure compiled by the Japan
Atomic Industry Forum (JAIF). Unfortunately, although the Ministry of Economy, Trade and Industry (METI) has continuously been publishing this
series of books even until the present, detailed cost data have no longer been listed since the 1994 publication. Thus, it is impossible to obtain data
for all the nuclear power plants in Japan from this data source. As such, Lovering et al. (2016) show the trends in construction costs based on
informal hearings with the utilities, as stated in Section 2.
In contrast, we used the cost data that appear in genshiro secchi kyoka shinsei-sho (“Application document for reactor installment license”) or
genshiro secchi henkou kyoka shinsei-sho (“Application document for the modification of reactor installment license”), referred to as the Application
Documents in this article (Electric Power Companies in Japan, 1959–2003). These are the documents that the utilities submit to the government to
receive permission for the construction or the modification of nuclear facilities, and they are easily accessible at the National Diet Library or at the
Nuclear Regulation Agency in Tokyo. A large part of these documents is dedicated to a description of the details of the nuclear facilities, while
Appendix 3 of the documents, an example of which is shown in Table B1, lists the costs involved in construction.
It should be noted that in many cases the figures in the Application Documents were revised several times, as was the case in dengen kaihatsu no
gaiyou. When there are changes in the specifications of a nuclear facility, the utility submits a new Application Document to the government, and in

Table B1
Construction costs appearing in the Application Document for Genkai-3 and 4 (JPY million).
Unit 3 Unit 4

Land 5,391 0
Buildings 34,980 23,387
Structures 15,219 7,384
Machinery 276,293 244,386
Other equipment 6,266 8,927
Temporary facilities 20,276 5,073
General & administrative expense 35,555 29,119
Interest during construction 17,941 11,439
Sharing related cost 1,579 1,085
Contingency 3,200 6,200
Total 416,700 337,000

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case the construction costs undergo major revisions due to the changes in the reactor specifications, the cost figures are shown again in a similar form
as in Table B1. In this study we used the last figures shown in this form in the Application Documents.
These three kinds of data obtained from dengen kaihatsu no gaiyou, the Application Documents, and informal hearings, are thought to be based on
the same source, that is, the data that each electric utility disclosed to the government during the period of planning and construction. Since the data
are frequently modified across time, the figures differ slightly depending on which annual value is taken. For example, the construction cost of
Kashiwazaki-Kariwa-3 used in this study, which is JPY 336.8 billion according to the Application Document submitted in 1986, coincides with the
figure in dengen kaihatsu no gaiyou published in the same year. Although this is the last figure that appears in the Application Documents, the figures
in dengen kaihatsu no gaiyou continued to be modified throughout the construction period. The final figure is JPY 325.3 billion, which appears in the
document published in 1993, the year of first commercial operation, and is exactly the same as the data obtained by the hearings. It happens to be
possible to confirm by a document of the local government (Niigata Prefecture, 2012), that this figure is indeed the final one. We must also note that
not all the data from the hearings indicate the final value. For example, the figures for Tomari-1 to 3 of Hokkaido Electric Power Company exactly
coincide with the ones in the Application Document. Since it is known that the cost figure continued to be revised after the Document according to
dengen kaihatsu no gaiyou, we can conclude that it finally took a somewhat different value, which may not have been made public in any of the
documents.
As mentioned above, this study used the last figure found in the Application Documents. Firstly, this is because, as previously explained, dengen
kaihatsu no gaiyou published after 1994 contain no cost data, and the data obtained by the hearings seem to indicate costs at different time points
depending on the company. Secondly, and more importantly, only the Application Documents contain the breakdown of the expenses as shown in
Table B1. We should pay special attention to the fact that “interest during construction” (IDC) is included here. Both Marshall and Navarro (1991)
and Lovering et al. (2016) regard the cost data from dengen kaihatsu no gaiyou or the informal hearings, which correspond to the “Total” figure in
Table B1, as “overnight costs”, or the costs excluding IDC. In this regard the two studies seem to have made serious mistakes, although we must state
here clearly that for the latter study, the responsibility lies with one of the authors of this article, who gave Lovering et al. incorrect information.
It should also be noted that the figures in the Application Documents are usually estimated costs in the design stages, rather than the actual costs
spent by the utilities. In many cases, it is supposed to be close to the final cost, but there are exceptions. One striking example is Hamaoka-5, whose
total construction cost is JPY 435.0 billion including IDC, according to the Application Document submitted in 1997. Since one of the press releases
from the utility (Chubu Electric Power Co., Inc, 2005) reveals that the actual total construction cost for the plant was JPY 360.0 billion, which is
exactly the same as the figure in the hearings, we can see that the cost underwent significant declines after the submission of the Document. This
study used this figure in the press release, rather than that in the Application Document, exceptionally for Hamaoka-5, as the discrepancy is large
only for this reactor, as long as we can confirm this using published documents. Generally speaking, it would be more appropriate to use later values
and values with a more detailed breakdown. In any case, we should always be aware that the results of analyses could be somewhat different
depending on which data are used.
We calculated the unit construction cost, dividing the real construction cost by the gross power generating capacity. While our main focus is on
the real overnight cost ZO, we also analyzed the real total cost ZT.
Table B1 shows the data for Genkai-3 and 4, which is a typical example of “twin plants.” We should pay attention to the asymmetry in the figures;
i.e. the costs for such items as “Land”, “Structures” and “Temporary facilities” are larger for unit 3, and smaller or zero for unit 4. This is because
these figures for unit 3 actually include expenses common to both units. In this regard, we used the average cost of the two plants for twin plants. The
reactors assumed as twin plants in this study are: Tomari-1 and 2, Fukushima Daini-3 and 4, Kashiwazaki-Kariwa-2 and 5, 3 and 4, 6 and 7, Ohi-1 and
2, 3 and 4, Takahama-3 and 4, and Genkai-3 and 4. Among other plants, for example, Onagawa-2 and 3 are both BWRs constructed by Toshiba, with
the same capacity of 825 MW, but since they were not constructed at the same time, we did not regard them as twin plants in this study.
The analyses in this article excluded Tokai nuclear power plant, since it is the only non-LWR commercial reactor in Japan. It would be sufficient
to mention that the plant is much more expensive than other reactors, with reported overnight cost at JPY 27 billion as a mixed current value, which
is almost equivalent to 2011 JPY 760 thousand/kW, reflecting the fact that it is the first commercial reactor and is small in size.

B.2 Construction costs of “transitional” reactors

The four "transitional" reactors described in Section 3.1 are characterized by large escalations in construction costs from the initial application to
the final stage. Tables B2 and B3 show the submission year and the reported total construction cost in each Application Document for Fukushima
Daini and Genkai power stations, respectively. The total cost of Fukushima Daini-1, for example, showed a sharp rise from JPY 98.6 billion in 1972 to
JPY 272.8 billion in 1976. As for Genkai-2, the cost rose from JPY 65.8 billion in 1975 to JPY 91.5 billion in 1976, then to JPY 133.2 billion in 1979.

Table B2
Construction costs appearing in the Application Documents for the Fukushima Daini nuclear power plant (JPY million).
Reported month Unit 1 Unit 2 Unit 3 Unit 4

Aug. 1972, partly revised in Jul. 98,600

1973
Aug. 1976 272,800
Dec. 1976 199,300
Aug. 1976, partly corrected in Jul. 272,800
1977
Dec. 1976, partly corrected in Apr. 255,800
1978
Aug. 1978 277,400 268,600
Nov. 1979 290,400 255,600
Jul. 1980 317,900 274,700
Gross capacity in MW 1,100 1,100 1,100 1,100
Construction start year 1975 1979 1980 1980
Operation start year 1982 1984 1985 1987

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Y. Matsuo, H. Nei Energy Policy 124 (2019) 180–198

Table B3
Construction costs appearing in the Application Documents for the Genkai nuclear power plant (JPY million).
Reported month Unit 1 Unit 2 Unit 3 Unit 4

May 1970 41,700

May 1970, partly revised in Nov. 41,700
1970
Aug. 1974 65,800
Aug. 1974, partly corrected in Dec. 65,800
1975
Dec. 1976 91,500
Mar. 1977 91,500
Mar. 1977, partly corrected in May 91,500
1977
Feb. 1979 133,200
Oct. 1982 489,500 420,800
Nov. 1983 482,000 406,700
Aug. 1984 468,300 381,700
Sep. 1986 474,200 393,800
Apr. 1990 435,000 349,000
Nov. 1992 416,700 341,500
Aug. 1994 337,000
Gross capacity in MW 559 559 1,180 1,180
Construction start year 1971 1976 1985 1985
Operation start year 1975 1981 1994 1997

Likewise, the cost of Ikata-2 rose from JPY 79.5 billion in 1975 to JPY 106.7 billion in 1977, whereas Kashiwazaki-Kariwa-1 shows a more moderate
increase from JPY 386.7 billion in 1975 to JPY 438.0 billion in 1979.
Fig. B1 shows the unit cost (mixed current total cost divided by the capacity) versus the submission year of the Application Documents for
selected reactors (Genkai-1 to 4, Ikata-1 to 3, Fukushima Daini-1 to 4, Kashiwazaki-Kariwa-1 to 7, and Takahama-1 to 4). Each point shows one
Application Document, and the data for the same reactor are connected by a line. Notably, the unit costs have risen more rapidly than the commodity
prices during the period from 1975 to 1980, when the 1st and 2nd phases of the I&S programs were ongoing. This figure suggests that the con-
struction costs for the “transitional” four reactors may have been escalating due to the ongoing I&S program. unlike the succeeding reactors. We
should also note, however, that the unit cost of Kashiwazaki-Kariwa-1, as shown in Fig. B1, was already high at JPY 352 thousand/kW in March
1975, right before the start of the I&S program. To explain this, it would be necessary to suppose that the plant designers had been foreseeing the
trends towards I&S in advance of the official commencement of the program, or that some unknown reasons had been causing the cost escalation of
this single plant only.

B.3 Data table

The data used in this study are shown in Table B4. This table includes the construction start date and the commercial operation date by IAEA-
Power Reactor Information System (PRIS) (IAEA, 2017). The Japan Atomic Industry Forum (JAIF, 2017) reports the construction start date earlier
for some plants, while the commercial operation dates by both sources are almost interchangeable. The construction start date by IAEA-PRIS is
roughly consistent with the concrete pour date by JAIF.

Appendix C. Correction of the cost figures

It is not appropriate to use the cost figures reported by electric utilities as they are, resulting in the need for some preliminary corrections. This

Fig. B1. Trends in the reported unit construction costs. Note: Shaded area (1975–1980) denotes the period when the first and the second I&S program took place.

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 Table B4
Data used in the study.
Construction Start Commercial Capacity Plant type Manufacturer Improvement & Construction cost (mixed Construction cost excl. IDC Submission year of the
(IAEA) Operation (IAEA) (gross, MW) Standardization current JPY billion) (mixed current JPY billion) Application Document
Y. Matsuo, H. Nei

JAPC Tokai Mar− 61 Jul− 66 166 GCR GE (UK) – 29.5 27.0 1959
Tokai daini Oct− 73 Nov− 78 1100 BWR− 5 GE – 171.4 146.4 1976
Tsuruga 1 Nov− 66 Mar− 70 357 BWR− 2 GE – 30.0 27.7 1966
2 Nov− 82 Feb− 87 1160 PWR M(4 MHI 1st 372.3 319.7 1980
loop)
Hokkaido Tomari 1 Apr− 85 Jun− 89 579 PWR M(2 MHI 1st 280.0 248.3 1984
loop)
2 Jun− 85 Apr− 91 579 PWR M(2 MHI 1st 181.0 160.2 1984
loop)
3 Nov− 04 Dec− 09 912 PWR M(3 MHI 2nd 292.6 n.a. 2003
loop)
Tohoku Onagawa 1 Jul− 80 Jun− 84 524 BWR− 4 Toshiba 1st 212.3 188.4 1980
2 Apr− 91 Jul− 95 825 BWR− 5 Toshiba 2nd 267.2 255.0 1988
3 Jan− 98 Jan− 02 825 BWR− 5 Toshiba 2nd 369.0 356.1 1996
Higashidori Nov− 00 Dec− 05 1100 BWR− 5 Toshiba 2nd 428.0 n.a. 1998
Tokyo Fukushima 1 Jul− 67 Mar− 71 460 BWR− 3 GE – 42.2 40.6 1969
daiichi
2 Jun− 69 Jul− 74 784 BWR− 4 GE/Toshiba – 51.0 48.4 1968
3 Dec− 70 Mar− 76 784 BWR− 4 Toshiba – 53.1 50.6 1969
4 Feb− 73 Oct− 78 784 BWR− 4 Hitachi – 51.0 48.7 1971
5 May− 72 Apr− 78 784 BWR− 4 Toshiba – 59.4 56.6 1971
6 Oct− 73 Oct− 79 1100 BWR− 5 GE/Toshiba – 164.8 144.2 1975
Fukushima daini 1 Mar− 76 Apr− 82 1100 BWR− 5 Toshiba – 272.8 237.9 1977
2 May− 79 Feb− 84 1100 BWR− 5 Hitachi 1st 255.8 231.3 1978

192
3 Mar− 81 Jun− 85 1100 BWR− 5 Toshiba 1st 317.9 294.7 1980
4 May− 81 Aug− 87 1100 BWR− 5 Hitachi 1st 274.7 251.9 1980
Kashiwazaki 1 Jun− 80 Sep− 85 1100 BWR− 5 Toshiba – 438.0 394.5 1980
kariwa
2 Nov− 85 Sep− 90 1100 BWR− 5 Toshiba 2nd 369.4 325.5 1983
3 Mar− 89 Aug− 93 1100 BWR− 5 Toshiba 2nd 336.8 316.3 1986
4 Mar− 90 Aug− 94 1100 BWR− 5 Hitachi 2nd 342.9 321.1 1986
5 Jun− 85 Apr− 90 1100 BWR− 5 Hitachi 2nd 418.5 368.4 1983
6 Nov− 92 Nov− 96 1356 ABWR Toshiba 3rd 418.5 413.5 1991
7 Jul− 93 Jul− 97 1356 ABWR Hitachi 3rd 375.8 370.8 1991
Chubu Hamaoka 1 Jun− 71 Mar− 76 540 BWR− 4 Toshiba – 53.1 49.4 1976
2 Jun− 74 Nov− 78 840 BWR− 4 Toshiba – 81.2 75.4 1976
3 Apr− 83 Aug− 87 1100 BWR− 5 Toshiba 1st 419.4 n.a. 1983
4 Oct− 89 Sep− 93 1137 BWR− 5 Toshiba 2nd 372.0 348.3 1988
5 Jul− 00 Jan− 05 1380 ABWR Toshiba 3rd 360.0 n.a. –
Hokuriku Shika 1 Jul− 89 Jul− 93 540 BWR− 5 Hitachi 2nd 235.0 215.0 1988
2 Aug− 01 Mar− 06 1206 ABWR Hitachi 3rd 425.0 n.a. 1999
Kansai Mihama 1 Feb− 67 Nov− 70 340 PWR W(2 WE/MHI – 29.8 28.0 1966
loop)
2 May− 68 Jul− 72 500 PWR M(2 WE/MHI – 36.0 33.8 1968
loop)
3 Aug− 72 Dec− 76 826 PWR M(3 MHI – 61.5 56.8 1972
loop)
Takahama 1 Apr− 70 Nov− 74 826 PWR M(3 WE/MHI – 66.0 62.0 1969
loop)
2 Mar− 71 Nov− 75 826 PWR M(3 MHI – 55.0 50.3 1970
loop)
3 Dec− 80 Jan− 85 870 PWR M(3 MHI 1st 278.1 257.7 1980
loop)
(continued on next page)
Energy Policy 124 (2019) 180–198
 Table B4 (continued)

Construction Start Commercial Capacity Plant type Manufacturer Improvement & Construction cost (mixed Construction cost excl. IDC Submission year of the
(IAEA) Operation (IAEA) (gross, MW) Standardization current JPY billion) (mixed current JPY billion) Application Document
Y. Matsuo, H. Nei

4 Mar− 81 Jun− 85 870 PWR M(3 MHI 1st 203.9 186.4 1980
loop)
Ohi 1 Oct− 72 Mar− 79 1175 PWR W(4 WE/MHI – 108.7 98.8 1972
loop)
2 Dec− 72 Dec− 79 1175 PWR W(4 WE/MHI – 77.6 71.1 1972
loop)
3 Oct− 87 Dec− 91 1180 PWR M(4 MHI 2nd 480.0 459.7 1989
loop)
4 Jun− 88 Feb− 93 1180 PWR M(4 MHI 2nd 270.0 258.0 1989
loop)
Chugoku Shimane 1 Jul− 70 Mar− 74 460 BWR− 3 Hitachi – 35.0 34.3 1969
2 Feb− 85 Feb− 89 820 BWR− 5 Hitachi 2nd 320.0 277.2 1983
Shikoku Ikata 1 Sep− 73 Sep− 77 566 PWR M(2 MHI – 48.2 44.4 1972
loop)
2 Aug− 78 Mar− 82 566 PWR M(2 MHI – 106.7 95.2 1977
loop)
3 Oct− 90 Dec− 94 890 PWR M(3 MHI 2nd 304.0 n.a. 1989
loop)
Kyushu Genkai 1 Sep− 71 Oct− 75 559 PWR M(2 MHI – 41.7 38.6 1970
loop)
2 Feb− 77 Mar− 81 559 PWR M(2 MHI – 133.2 117.7 1979
loop)
3 Jun− 88 Mar− 94 1180 PWR M(4 MHI 2nd 416.7 398.8 1992
loop)
4 Jul− 92 Jul− 97 1180 PWR M(4 MHI 2nd 337.0 325.6 1994

193
loop)
Sendai 1 Dec− 79 Jul− 84 890 PWR M(3 MHI 1st 215.1 187.0 1977
loop)
2 Oct− 81 Nov− 85 890 PWR M(3 MHI 1st 228.1 197.2 1978
loop)
Energy Policy 124 (2019) 180–198
Y. Matsuo, H. Nei Energy Policy 124 (2019) 180–198

has repeatedly been pointed out in studies in the United States (Komanoff, 1981; Zimmerman, 1982; EIA, 1986; University of Chicago, 2004). The
reason of this mainly lies in the fact that the figures cannot be regarded as real values. As in the case of the United States, the reported costs by
Japanese utilities are supposed to be in “mixed current prices”, which are a simple summation of nominal values in different years.
Assume that the construction of a reactor starts in year s, and ends in year f. Pt denotes the proportion of real expenditure in year t (s ≦ t ≦ f),
satisfying
f
∑t=s Pt = 1 (C.1)
We denote the real overnight construction cost in year d prices as ZO, d being the publication year of the report. d is usually slightly smaller than s,
but in some cases d lies between s and f, or rather is nearer to f. Nominal annual expenditures are calculated as ZOPtIt, in which the inflation
coefficient It in year t is defined as

f f ⎧1 (t = d )
⎪ t
It = ∏ (1 + iT )/ ∏ (1 + iT ) = ∏T = d + 1 (1 + iT ) (d < t )
T=d+1 T=t+1
⎨ d
⎪∏T = t + 1 (1 + iT )−1 (t < d ) (C.2)
⎩
where it is the inflation rate in year t. The sum of annual nominal expenditure
f
RO = ZO ∑ Pt It (C.3)
t=s

can be regarded as the reported overnight construction cost in mixed current yen. Let rt be the nominal interest rate in year t, and we can calculate
the total construction cost in mixed current yen as
f
RT = ZO ∑ Pt It Dt (C.4)
t=s

where
f
Dt = ∏T =t+1 (1+rT ) (C.5)
Interest during construction (IDC) in mixed current yen is
f
RI = RT − RO = ZO ∑ Pt It (Dt −1) (C.6)
t=s

Following Zimmerman (1982), EIA (1986) and other studies, we assume that the RT and RI calculated by these equations correspond to the total
costs and the IDC reported by the utilities, respectively. We must note, however, that the data in Japan are usually based on estimations right before
the construction. That is, if we calculate the “true” overnight cost ZO from the reported cost RO and the Eqs. (C.3) and (C.2), this means that we are
assuming that the utilities were predicting future inflation rates correctly. Another assumption could be that the utilities were assuming that the
inflation rate in the year of their estimation will last in the future, in which case we should use
t−d
⎧ (1 + id ) (d ≤ t )
It = d −1
⎨∏T = t + 1 (1 + iT ) (t < d )
⎩ (C.7)
rather than Eq. (C.2), to calculate ZO from Eq. (C.3).
It is worth mentioning that the total construction cost in mixed current yen RT is the net present value in year f, which is equivalent to the real
total construction cost in year f price. In fact, from the real overnight cost in year d prices, ZO, we can calculate the real total cost as
f
ZT = ZO ∑ Pt Dt* (C.8)
t=s

where
f f 1+rT
Dt* = ∏T =t+1 (1+rT*) = ∏T =t+1 1+iT (C.9)
and r*t denotes the real interest (or discount) rate. Thus the real total cost in year f price is
f f f f f
∏T = d + 1 (1 + iT )
ZT ∏ (1 + it ) = Z0 ∑ Pt f ∏ (1 + rT ) = Z0 ∑ Pt It Dt
t=d+1 t=s ∏T = t + 1 (1 + iT ) T=t+1 t=s (C.10)
which equals to RT in Eq. (C.4). For this reason Marshall and Navarro (1991) mention the reported RT as the “true cost.” On the other hand, the
reported overnight cost RO coincides with neither the overnight cost in year d price, ZO, nor that in year f price, ZOIf. This is why we must calculate
ZO, rather than simply use the reported values, making assumptions on the inflation rates it and the cost profile Pt. In this regard, we could say that
conducting analyses with the total cost RT could be more reasonable and reliable, if RT is reported correctly.
In the case of the Japanese data, however, the problem is that if we calculate RI from the reported total cost RT and Eqs. (C.3), (C.4), and (C.6),
and assumed inflation rates and interest rates, such as the GDP deflator and the prime lending rate (Bank of Japan, 2017), for example, the results
largely surpass the reported IDC figures (Fig. C1).
One reason for this discrepancy could be found in the fact that Japanese electric utilities have been raising money needed for capital investment
by internal and external funds (FEPC, 2016), and that there is a possibility that the reported IDC do not include financial expenses related with the
internal funds. The actual proportion of internal and external funds, which the utilities exploited for the construction of specific nuclear reactors, has
not been made public.
For this reason, if we use the reported total cost RT for analyses, we will largely underestimate the overnight costs. In this regard, this study

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Y. Matsuo, H. Nei Energy Policy 124 (2019) 180–198

Fig. C1. Reported and estimated interest during construction (ratio to the overnight cost).

estimated the real overnight cost ZO from the reported cost RO and Eq. (C.3). Once ZO is calculated, it is quite easy to estimate the total cost ZT, using
the prime lending rates, for example, although the estimated values are not consistent with and are usually larger than, the reported total costs.
As for the cost profile Pt, we can make a rough estimation using the “construction in progress” (CIP) account found in annual financial documents
of the electric utilities (Electric Power Companies in Japan, 1970–2010). We can decide Pt so that the right-hand side of Eq. (C.3), with the
summation taken up to a year t during construction, rather than the final year f, equals the CIP account in the financial documents. Since each
document only contains the total figure of the CIP account for the construction of all of the nuclear facilities of one utility, we must assume a profile
curve for each utility, and minimize the difference between the estimated and reported CIP accounts.

Appendix D. Results of alternative regression models

This appendix shows the results of alternative regression models, including additional explanatory variables to the standard model. As in the
main part of the paper, the symbols ***, **, *, and † indicate that the coefficients are significantly different from zero at the 0.1%, 1%, 5%, and 10%
levels, respectively. (Tables D1–D6)

Table D1
Results of the regression analyses (Construction experience, construction period, and lead time).
Coef. Std. error t-value Coef. Std. error t-value

lnEXPt lnEXPbp
Constant 3.66† 2.09 1.75 Constant 3.73† 2.22 1.68
lnCAP − 0.24** 0.09 − 2.73 lnCAP − 0.24** 0.09 − 2.69
lnLC 0.36 0.25 1.45 lnLC 0.35 0.26 1.34
dumTR 0.52** 0.18 2.85 dumTR 0.52** 0.18 2.82
dumIS123 0.66*** 0.14 4.80 dumIS123 0.67*** 0.14 4.63
dumPWR − 0.10* 0.04 − 2.44 dumPWR − 0.10* 0.04 − 2.39
dumFOAK 0.39** 0.12 3.29 dumFOAK 0.39** 0.12 3.33
lnEXPt − 0.01 0.05 − 0.10 lnEXPbp −0.003 0.06 − 0.05
Adjusted R2 0.808 Adjusted R2 0.808
lnEXPm lnCP
Constant 4.45* 2.18 2.04 Constant 3.86* 1.54 2.51
lnCAP − 0.24** 0.09 − 2.78 lnCAP − 0.26** 0.08 − 3.44
lnLC 0.26 0.25 1.04 lnLC 0.34† 0.18 1.87
dumTR 0.52** 0.18 2.86 dumTR 0.52** 0.17 3.01
dumIS123 0.70*** 0.13 5.53 dumIS123 0.69*** 0.11 6.32
dumPWR − 0.11* 0.04 − 2.42 dumPWR − 0.10* 0.04 − 2.43
dumFOAK 0.39** 0.13 3.05 dumFOAK 0.40** 0.12 3.24
lnEXPm 0.03 0.05 0.57 lnCP 0.09 0.17 0.53
Adjusted R2 0.809 Adjusted R2 0.809
lnLT
Constant 3.87* 1.53 2.53
lnCAP − 0.24** 0.08 − 2.94
lnLC 0.33† 0.18 1.85
dumTR 0.54** 0.18 2.96
dumIS123 0.68*** 0.11 6.33
dumPWR − 0.10* 0.04 − 2.41
dumFOAK 0.40** 0.12 3.35
lnLT − 0.01 0.02 − 0.86
Adjusted R2 0.809

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Y. Matsuo, H. Nei Energy Policy 124 (2019) 180–198

Table D2
Results of the regression analyses (I&S programs).
Coef. Std. error t-value Coef. Std. error t-value

dumIS23 dumIS3
Constant 4.08* 1.90 2.14 Constant 3.47* 1.66 2.09
lnCAP − 0.24** 0.09 − 2.76 lnCAP − 0.22* 0.09 − 2.39
lnLC 0.31 0.21 1.43 lnLC 0.36† 0.19 1.96
dumTR 0.53** 0.19 2.84 dumTR 0.50** 0.18 2.86
dumIS123 0.67*** 0.11 6.03 dumIS123 0.67*** 0.11 6.05
dumIS23 0.03 0.07 0.44 dumIS3 − 0.10 0.07 − 1.43
dumPWR − 0.10* 0.04 − 2.31 dumPWR − 0.11* 0.04 − 2.55
dumFOAK 0.38** 0.14 2.79 dumFOAK 0.42** 0.13 3.23
Adjusted R2 0.809 Adjusted R2 0.811

D.1 Construction experience, construction period, and lead time

lnUCi = a0 + a1lnCAPi + a2lnLCi + a3 dumTR i + a4 dumIS123i + a5 dumPWR i + a6 dumFOAKi + a7 ADDi + ui (D.1)

ADDi = lnEXPti : Cumulative number of LWRs constructed previously.

lnEXPbpi : Cumulative number of BWRs or PWRs constructed previously.
lnEXPmi : Cumulative number of BWRs or PWRs constructed previously by the same manufacturer.
lnCPi : Construction period.
lnLTi : Construction lead time.

D.2 I&S programs

lnUCi = a0 + a1lnCAPi + a2lnLCi + a3 dumTRi + a4 dumIS123i + a5 dumISi + a6 dumPWR i + a7 dumFOAKi + ui (D.2)

dumISi = dumIS23i : dummy variable with value 1 if the plant was designed after the second I&S program and zero otherwise.
dumIS3i : dummy variable with value 1 if the plant is an ABWR and zero otherwise.

D.3 Plant manufacturer and the first-of-a-kind status

lnUCi = a0 + a1lnCAPi + a2lnLCi + a3 dumTRi + a4 dumIS123i + a5 ADDi + a6 dumFOAKi + ui (D.3)

ADDi = dumMi, dumTi, dumHi : dummy variables with value 1 if the plant was constructed by Mitsubishi Heavy Industries, Toshiba, and Hitachi,
respectively, and zero otherwise.
or
lnUCi = a0 + a1lnCAPi + a2lnLCi + a3 dumTRi + a4 dumIS123i + a5 dumPWR i + a6 dumFOAKi + a7 dumFOAKmi + ui (D.4)

dumFOAKmi : dummy variable with value 1 if the plant was the first BWR or PWR constructed by a domestic manufacturer, and zero otherwise.

Table D3
Results of the regression analyses (Plant manufacturer and the first-of-a-kind status).
Coef. Std. error t-value Coef. Std. error t-value

dumM dumT
Constant 3.80* 1.61 2.36 Constant 3.73* 1.78 2.09
lnCAP − 0.26** 0.09 − 2.95 lnCAP − 0.24** 0.08 − 2.93
lnLC 0.35† 0.18 1.92 lnLC 0.35 0.21 1.66
dumTR 0.53** 0.18 2.91 dumTR 0.54** 0.17 3.16
dumIS123 0.68*** 0.12 5.89 dumIS123 0.67*** 0.13 5.09
dumM − 0.09* 0.04 − 2.09 dumT 0.07 0.05 1.45
dumFOAK 0.35** 0.12 2.82 dumFOAK 0.40** 0.12 3.28
Adjusted R2 0.808 Adjusted R2 0.804
dumH dumFOAKm
Constant 3.38* 1.66 2.04 Constant 3.48† 1.89 1.84
lnCAP − 0.23* 0.09 − 2.66 lnCAP − 0.23* 0.09 − 2.54
lnLC 0.39* 0.19 2.01 lnLC 0.37† 0.21 1.80
dumTR 0.54** 0.18 3.03 dumTR 0.52** 0.18 2.93
dumIS123 0.66*** 0.12 5.36 dumIS123 0.67*** 0.11 5.88
dumH − 0.02 0.06 − 0.43 dumPWR − 0.09* 0.04 − 2.19
dumFOAK 0.41** 0.12 3.29 dumFOAK 0.36*** 0.10 3.53
Adjusted R2 0.798 dumFOAKm 0.07 0.12 0.56
Adjusted R2 0.798 Adjusted R2 0.809

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Y. Matsuo, H. Nei Energy Policy 124 (2019) 180–198

Table D4
Result of the regression analysis (Twin plants).
Coef. Std. error t-value

dumTWIN
Constant 3.78* 1.55 2.44
lnCAP − 0.23* 0.09 − 2.47
lnLC 0.33† 0.18 1.85
dumTR 0.52** 0.18 2.92
dumIS123 0.68*** 0.11 6.06
dumPWR − 0.09* 0.04 − 2.23
dumFOAK 0.40** 0.12 3.31
dumTWIN − 0.02 0.04 − 0.42
Adjusted R2 0.808

Table D5
Results of the regression analyses (Seismic standards).
Coef. Std. error t-value Coef. Std. error t-value

lnS1 lnS2
Constant 3.41* 1.66 2.06 Constant 3.36* 1.62 2.07
lnCAP − 0.24** 0.08 − 2.87 lnCAP − 0.26** 0.08 − 3.18
lnLC 0.31 0.19 1.64 lnLC 0.28 0.21 1.36
dumTR 0.54** 0.19 2.88 dumTR 0.54** 0.19 2.90
dumIS123 0.67*** 0.12 5.75 dumIS123 0.67*** 0.12 5.55
dumPWR − 0.09* 0.04 − 2.21 dumPWR − 0.10* 0.04 − 2.59
dumFOAK 0.35** 0.12 2.85 dumFOAK 0.33* 0.13 2.58
lnS1 0.11 0.10 1.14 lnS2 0.17 0.14 1.21
Adjusted R2 0.813 Adjusted R2 0.815

Table D6
Results of the regression analyses (Performance indexes).
Coef. Std. error t-value Coef. Std. error t-value

INC LF
Constant 3.64* 1.44 2.53 Constant 3.87* 1.59 2.43
lnCAP − 0.26** 0.09 − 2.95 lnCAP − 0.25** 0.08 − 3.10
lnLC 0.37* 0.17 2.23 lnLC 0.37* 0.18 2.07
dumTR 0.54** 0.17 3.09 dumTR 0.55** 0.19 2.96
dumIS123 0.70*** 0.11 6.22 dumIS123 0.69*** 0.12 5.63
dumPWR − 0.10* 0.04 − 2.50 dumPWR − 0.06 0.06 − 1.07
dumFOAK 0.35* 0.14 2.46 dumFOAK 0.37** 0.12 3.22
INC 0.11 0.10 1.11 LF − 0.30 0.28 − 1.10
Adjusted R2 0.812 Adjusted R2 0.812

D.4 Twin plants

lnUCi = a0 + a1lnCAPi + a2lnLCi + a3 dumTRi + a4 dumIS123i + a5 dumPWR i + a6 dumFOAKi + a7 dumTWINi + ui (D.5)

dumTWINi : dummy variable with value 1 if the plant is one of the twin plants, and zero otherwise.

D.5 Seismic standards

lnUCi = a0 + a1lnCAPi + a2lnLCi + a3 dumTR i + a4 dumIS123i + a5 dumPWR i + a6 dumFOAKi + a7 ADDi + ui (D.6)

ADDi = lnS1i : Maximum Design Earthquake Ground Motion (S1).

lnS2i : Extreme Design Earthquake Ground Motion (S2).

D.6 Performance indexes

lnUCi = a0 + a1lnCAPi + a2lnLCi + a3 dumTR i + a4 dumIS123i + a5 dumPWR i + a6 dumFOAKi + a7 ADDi + ui (D.7)

ADDi = INCi : Reported number of accidents and failures.

LFi : Average load factor.

197
Y. Matsuo, H. Nei
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