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Japan's biggest nuclear operators forging alliance

According to media reports, Japan's biggest nuclear operators are discussing a potential partnership to overcome a crisis in the sector caused by the Fukushima nuclear disaster seven years ago.

Japanese business daily Nikkei reported on Wednesday that the country's four biggest nuclear companies — Tokyo Electric Power Company (Tepco), Hitachi, Toshiba and Chubu Electric Power — have signed an agreement aimed at building an alliance that would initially focus on decommissioning old reactors.

That could be extended to building and maintaining nuclear plants, with the moves likely to spur a broad realignment in Japan's nuclear industry, Nikkei reported.

Read more: Japan's nuclear mishap underlines industry malaise

The news agency Reuters said on the same day that a source, who was not authorized to speak with the media, had confirmed the report, saying that the agreement was intended to provide a framework for the talks.

However, the four companies refused to comment when contacted by several news media outlets, saying only that they had regular discussions with each other as well as with other nuclear operators and plant builders.

Read more: Japan marks 7th anniversary of tsunami and Fukushima nuclear disaster

In March 2011, Japan's nuclear industry was hit by a massive nuclear accident, when a tsunami and earthquake hit Tepco's Fukushima reactor causing a meltdown. The incident highlighted a series of regulatory and industry shortcomings that undermined public trust in a sector that once provided about 30 percent of Japan's electricity supply.

Against this background, a domestic cooperation would make sense, said Tom O'Sullivan, the founder of energy consultancy

Mathyos Japan. "Four balance sheets are better than one when it comes to nuclear risks," he told Reuters.

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Forced cooperation?

According to Nikkei, the plan was being backed by the country's Ministry of Economy, Trade and Industry (METI). It quoted an unidentified ministry official as saying that it was now "impossible for a private company to be in the business by itself." Officially however, METI declined it was leading the effort.

After Fukushima, calls have been mounting to reorganize the industry, which has 10 independent nuclear power companies in total. At the moment, nine reactors have been restarted, while utilities have had to spend billions of dollars on upgrades and alternative fuel supplies.

Read more: Japan approves restart of two nuclear reactors at Ohi power plant near Kyoto

The shakeup has already forced Tepco and Chubu to merge their fossil fuel power businesses under a venture called JERA. Nonetheless, the two companies are still waiting for permission to restart their nuclear units amid strong resistance from local populations.

Before the Fukushima disaster, Japan boasted 54 nuclear reactors in operation. In addition to the six Tepco reactors shut down in its wake, there are plans to decommission nine other units.

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