The unexpected magnitude of the disaster at the Fukushima Daiichi nuclear plant in Japan has led to a substantial reevaluation around the world of the safety of nuclear power, and has taken a toll on the values of companies engaged in the business.
The ongoing battle to control radiation has also caused German Chancellor Angela Merkel to backtrack from an unpopular decision to keep aging nuclear power plants open. Instead she has now ordered the closure of all plants that began operations earlier than 1980, so that safety checks can be performed.
On Wednesday the Huffington Post reported that General Electric, the company that designed all six of the reactors at Fukushima Daiichi, lost $10 billion in market value since March 11. GE also built three of Fukushima’s reactors. Hitachi, which runs Fukushima Daiichi along with GE, saw its shares fall by 6.3% on Monday before regaining some lost ground. It had been reported by MarketWatch that Toshiba, which built one of the Fukushima reactors, fell 10% on Monday as well.
Analysts, viewing the renewed discussions concerning the safety of U.S. nuclear power plants, especially in parts of the country near earthquake fault lines, have cut expectations for the companies that build and run them, as well as the mining companies that bring in nuclear fuel. Steve Fleishman, analyst at Bank of America/Merrill Lynch, was reported by The Wall Street Journal to have cut ratings for Entergy and for Scama Corp., which is in line to build two nuclear power plants in South Carolina.
Reuters reported that Merkel had originally pushed just last fall to keep all 17 of Germany’s nuclear power plants open past the dates originally set for their closure, a decision that was unpopular at the time. In view of the situation in Japan, however, she closed seven power plants for a three-month “moratorium” period so that they could be evaluated for safety concerns.
She told her parliament on Tuesday, "We will use the moratorium period, which we deliberately set to be short and ambitious, to drive the change in energy policy and accelerate it wherever possible, as we want to reach the age of renewable energy as quickly as possible."
Despite the situation in Japan, however, her decision was unpopular even with her own party, and Norbert Lammert, speaker of parliament and a member of Merkel’s CDU party, questioned the decision’s legality and asked why the Bundestag had not been consulted on the decision.
Merkel, however, stood firm, saying, "The nuclear law provides precisely for this: shutting down a plant temporarily until the authorities have achieved clarity about a new situation."
Businesses are pushing for the plants’ reopening if they pass their safety inspections; the Social Democrats, Merkel’s opposition, have called instead for them to be closed permanently by emergency law after accusing her of closing them merely for political gain.