Positive news from Japan as two additional reactor restarts have been granted preliminary approval.

Event: Japan’s Nuclear Regulatory Authority (“NRA”) has announced that it has granted preliminary permission to Kansai Electric Power Company for the latter to make changes to reactor installations at two units located at its Takahama nuclear power plant.

Bottom line: Positive – With this approval, the number of approved reactors in Japan rises to four. The previously approved Sendai reactors are currently undergoing final safety checks and are expected to be restarted early in 2015. Reactor restarts are viewed by many as a key market catalyst as some investors remain sceptical on whether it will actually occur.

• A 30-day public consultation period will commence with which the NRA will render its final decision. This is the same process that occurred when the NRA gave preliminary approval for the Sendai reactors in the summer. We expect those reactors to restart early in 2015.

  • Along with the 30-day consultation period, Kansai will be expected to gain approval from local authorities and at the prefecture level. Officially the federal government has final say in the matter but it appears that they will require all levels of government to endorse the restarts.

• It should be noted that this announcement comes a few days after pro-nuclear Shinzo Abe's Liberal Democrat Party was re-elected in a general election – thereby reaffirming its mandate to restart reactors.

• With the approval of these two reactors, the number of safety assessment applications that are under review now stand at 17. We expect additional applications for assessment in the future.

• Cantor Fitzgerald Canada Research forecasts that 32 reactors will ultimately be restarted (2015: 9, 2016: 10, 2017: 12, 2018: 1).