The cost of scrapping the damaged Fukushima No. 1 nuclear power plant is set to rise to hundreds of billions of yen annually from the previously projected ¥80 billion a year, according to a new government projection disclosed Tuesday.

Under the projection by the Ministry of Economy, Trade and Industry, and based on the estimated 30-year time frame to complete the decommissioning, the total cost will likely exceed the ¥2 trillion initially forecast by Tokyo Electric Power Company Holdings Inc.

The plant was ravaged by the March 2011 Great East Japan Earthquake and tsunami and three of its reactors subsequently suffered meltdowns.

METI presented the estimate at a meeting of a panel of experts set to discuss reforming Tepco’s management and helping finance the decommissioning work.

The ministry also presented the panel with a plan to spin off Tepco’s nuclear power business, aiming to cover the decommissioning cost through aligning with other utilities.

“The panel is considering ways in which Tepco can secure (decommissioning) funds while avoiding an increase in public burden,” Chief Cabinet Secretary Yoshihide Suga said at a news conference. “It is still discussing the issue.”

The utility’s business has taken a heavy blow in the years since the nuclear crisis first began as it wears the costs of cleaning up contaminated areas as well as compensating the people and businesses affected by the incident.

The growing costs of decommissioning Fukushima No. 1 and rising competition in electricity sales as a result of market deregulation prompted Tepco to seek fresh government assistance in July.