SAPPORO, Japan/TOKYO -- Hokkaido Gov. Naomichi Suzuki said Friday he would be willing to approve the restart of a reactor at the northern prefecture's sole nuclear plant.

"I believe that utilizing nuclear power is a realistic option available for the time being," Suzuki said during a Hokkaido Legislative Assembly meeting.

The No. 3 reactor at the Tomari Nuclear Power Station has passed new national regulatory safety standards, which Suzuki cited as a reason he is ready to give the green light.

"A restart is expected to lower electricity rates and ensure a stable supply amid an expected increase in electricity demand," the governor said.

The plant can only be restarted with the governor's consent. Suzuki is expected to make the decision official following discussions in Hokkaido's assembly.

"Securing a carbon-free power source will lead to economic growth in Hokkaido as well as a reduction in greenhouse gas emissions," Suzuki said.

Electricity demand in Japan is spiking amid the buildup of data centers for artificial intelligence and the construction of semiconductor plants.

Demand is expected to increase in nine of the 10 areas served by major regional power companies, according to the Organization for Cross-regional Coordination of Transmission Operators. The sole exception is the area covered by Shikoku Electric Power.

Hokkaido is expected to see power demand growth of 13% -- the sharpest among the regions -- over the next decade. This is due in part to the arrival of data centers. SoftBank is set to begin operation of a data center in Tomakomai city in the next fiscal year.

Rapidus, Japan's state-supported chipmaker, is building two semiconductor plants in Hokkaido, with the production of cutting-edge semiconductors scheduled to begin as soon as fiscal 2027.

"Hokkaido especially is expected to see an increase in renewable energy sources with unstable power generation in the 2030s, and restarting Tomari's Unit 3 will contribute to a stable supply," said Go Matsuo, managing director at the Tokyo-based Energy Economics and Society Research Institute.

Suzuki has said restarting the Tomari nuclear plant would help develop Hokkaido's local economy by attracting businesses.

Following the disaster at the Fukushima Daiichi nuclear plant in 2011, operators have worked to ensure reactor safety in accordance with the Nuclear Regulation Authority's new standards.

Fourteen reactors have been restarted to date, but 13 are concentrated in western Japan. The only reactor that has resumed operation in Japan's eastern half is the No. 2 reactor at the Onagawa Nuclear Power Station in Miyagi prefecture.

Niigata Gov. Hideyo Hanazumi announced last week that he would approve the restart of two reactors at the Kashiwazaki-Kariwa nuclear power plant. The resumption of operations at this plant and at Tomari would further expand the use of nuclear power in eastern Japan.

Japan's overall electricity demand is expected to climb 6% over the next 10 years, raising concerns about supply shortages. Electricity rates remain elevated, meaning nuclear power will become increasingly critical in propping up the domestic industry.

It is significantly less costly to power a nuclear power plant than a thermal plant. Fuel for a nuclear plant costs 1.9 yen (1 cent) per kilowatt-hour, according to estimates by the Ministry of Economy, Trade and Industry.

On the other hand, a coal-fired plant needs 6.3 yen worth of fuel per kilowatt-hour. Fuel for a plant running on liquefied natural gas costs 9 yen.

Such discrepancies impact electricity bills. The average household served by Hokkaido Electric Power will pay a 9,376 yen bill in December, according to an announcement Thursday. That is about 2,000 yen higher compared with the least expensive region served by Kyushu Electric Power.

In the areas of western Japan served by Kyushu Electric and Kansai Electric Power, nuclear energy accounts for 30% of the power generation mix. Customers in those regions have lower rates compared with eastern Japan.

TOKYO -- Tokyo Electric Power Co. Holdings (TEPCO) looks to finally restart a nuclear reactor 14 years after the Fukushima Daiichi disaster, but the plant operator still faces an uphill battle in rebuilding its finances, including a mountain of debt and a distrustful public.

The governor of Niigata prefecture in central Japan on Friday gave the green light for TEPCO to restart the No. 6 and No. 7 reactors at the Kashiwazaki-Kariwa nuclear power plant for the first time since 2012.

If the startup preparations for reactor No. 6 proceed smoothly, control rods will be removed by January, making it operational. Commercial operation is expected to begin before the end of March next year.

While the restart will help improve its cash flow, TEPCO's full-scale business restructuring will depend on how many nuclear reactors it can get up and running.

Kashiwazaki-Kariwa has reactor Nos. 1 through 7, and No. 7 has already passed a national safety inspection. The construction of a safeguard facility against terrorism is currently underway at No. 7, which will be ready to restart after August 2029. While a shortage of personnel remains an issue, extending the grace period for installing the facility would allow for a faster restart.

TEPCO is considering decommissioning Nos. 1 and 2. It has not applied for permission to restart Nos. 3 to 5, which would require additional investment in safety measures. Given its weak finances, those costs could be too much for the company to bear.

Construction of a planned nuclear plant in northern Japan's Aomori prefecture has been suspended since the March 2011 earthquake and tsunami that knocked out the Fukushima Daiichi plant.

In late 2017, Kashiwazaki-Kariwa passed new safety standards established by the Nuclear Regulation Authority after the Fukushima disaster. In January 2018, the head of the Agency for Natural Resources and Energy appealed to Niigata's governor to allow the restart of the plant in a bid to obtain local consent.

But from 2020 on, a series of problematic incidents came to light, including fraudulent use of employee ID cards and inadequate anti-terrorism measures. The NRA imposed a de facto ban on operations at Kashiwazaki-Kariwa in 2021, halting the restart process. The ban was lifted at the end of 2023, but distrust of TEPCO remains deeply rooted.

In a survey of Niigata residents released by the prefecture in November, 69% of respondents said they were concerned or somewhat concerned about TEPCO operating nuclear power plants.

"Restoring the trust of the local community will not be easy," TEPCO President Tomoaki Kobayakawa has said. The company is taking steps, including establishing a council in October to externally monitor the plant's operations.

The 2011 Fukushima Daiichi nuclear disaster left TEPCO saddled with debt to the Japanese government. The total cost of dealing with the incident, including decommissioning the plant and compensating victims, comes to 23.4 trillion yen ($150 billion), with TEPCO alone needing to cover 17 trillion yen.

The company temporarily secured funds by borrowing from the government, and it has been repaying 500 billion yen of this debt per year.

But worsening earnings in recent years have hampered its ability to make those payments. TEPCO announced in October a net loss of 712.3 billion yen for the April-September half amid the mounting cost of preparing for debris removal -- a particularly tough step in decommissioning Fukushima Daiichi.

TEPCO's turnaround plans are based on the premise of a restart at Kashiwazaki-Kariwa. Bringing one reactor back online is expected to improve the utility's earnings by 100 billion yen a year, in part by lowering its procurement costs. A restart will make it easier to set revenue and spending plans, in turn facilitating borrowing from banks and issuing debt.

Restarting the No. 6 reactor at Kashiwazaki-Kariwa is just one step in the turnaround process. TEPCO faces heavy upfront spending on safety measures and expanding transmission capacity. Capital spending in fiscal 2024 totaled 860 billion yen, the highest of any year going back to 2011.

With debris removal not expected to get fully underway until fiscal 2037, decommissioning costs are likely to overshoot the 8 trillion yen estimate.

Since Japan liberalized the retail market for electricity in 2016, emerging power providers have been peeling customers away from TEPCO. Other utilities that have restarted nuclear plants have been bringing down their rates to compete.

TEPCO, on the other hand, set its current rates on the assumption that two of its nuclear reactors are online. "Even with a restart, it'll be hard to cut our rates," a TEPCO executive said.

TEPCO's free cash flow was negative for seven straight years through fiscal 2024, for a total of 1.7 trillion yen in the red. It had 621.8 billion yen in cash and deposits as of September, down roughly 40% from a year earlier. Even after the No. 6 reactor resumes operation, it will take several years for cash flow to turn positive.

"It's a drop in the bucket toward a turnaround," a TEPCO executive said.

Japan now has 68 nuclear reactors built or in the planning stages, according to the Federation of Electric Power Companies of Japan. Of these, 14 are in operation, 12 are pending review or otherwise on track toward restarting, and 24 are slated for decommissioning, with the rest having no applications to restart.

Construction of new nuclear power plants and expansion of existing ones, which had been halted since the Fukushima Daiichi disaster, is getting back underway, with Kansai Electric Power starting site surveys this year. If TEPCO's governance frays, public opinion on nuclear power could sour again, potentially affecting other utilities' plans as well.

TOKYO -- Startup Helical Fusion has signed an energy deal with a supermarket chain, in a first for Japanese nuclear technology that aims to replicate the power of the sun.

The deal with Aoki Super marks the first power purchase agreement (PPA) signed by a Japanese fusion startup and comes as the government signals further support for the industry amid increasing international competition to commercialize the technology.

Under the agreement announced on Monday, Helical will supply electricity from its fusion power plant to the Nagoya-based supermarket operator sometime in the 2030s. Aoki is an investor in Helical.

The fusion startup is currently building a demonstration device for component and system validation and aims to have a full-scale, operational pilot plant generating electricity before 2040. The electricity would be supplied by the pilot plant, it said, but the companies did not disclose further details, such as the amount to be provided.

Nuclear fusion PPAs are rare, with only a handful of companies worldwide having signed one. U.S. startup Helion Energy agreed a deal with Microsoft in 2023, promising to deliver fusion energy by 2028, while another U.S. startup, Commonwealth Fusion, made similar agreements with Google and Italian oil major Eni, both signed this year.

"No matter how much technology is developed or money is invested, if there are no end users, the industry will lack a clear path forward, making it hard" for people to commit resources and investment, Helical Fusion CEO Takaya Taguchi said at a news conference.

"The fact that we received a concrete interest [to use the generated electricity] is a major development. By showing that there is an 'exit,' we can encourage others to join the fusion industry," he added.

Fusion energy harnesses the same reaction that powers the sun. In the reactor, hydrogen isotopes -- typically deuterium and tritium -- are heated to temperatures higher than those in the sun's core, forming a superhot gas called plasma. In this state, the atomic nuclei fuse, releasing vast amounts of energy.

Fusion can generate huge amounts of energy from small quantities of deuterium and tritium, and it releases no carbon dioxide or long-lasting, high-level radioactive waste. It is also considered safer than conventional nuclear power, which creates energy through the splitting of atoms, in a reaction called nuclear fission.

The energy generated is converted to heat, which boils water into steam to spin a turbine that generates electricity, much like conventional power plants.

Research has been going on for decades, with the technology difficult to commercialise. But the industry believes it is now a question of when, not if, significant power generation can be achieved, fueling massive investment and creating international competition.

U.S. companies have accounted for the bulk of the nearly $10 billion in public and private funding, but industry insiders have highlighted China's rapid progress.

A recent report by the Special Competitive Studies Project (SCSP), a nonprofit think tank founded by former Google CEO Eric Schmidt, estimated that China had "mobilized at least $6.5 billion towards commercialization-relevant fusion projects since the start of 2023" in the most conservative estimation, "in a range that could be as high as $10 or $13 billion."

Japan's fusion industry is expecting increased government backing as new Prime Minister Sanae Takaichi is a known supporter. The government, aiming to demonstrate power generation from fusion in the 2030s, has designated nuclear fusion as one of the 17 strategic fields in which to funnel investments, and is looking to include an allocation of 100 billion yen ($645 million) for the development of the industry in the supplementary budget for this fiscal year.

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