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Indonesia must consider nuclear power in base load to responsibly reach 35GW

  • Will Hickey

    The Jakarta Post

Jakarta | Thu, June 4, 2015 | 06:19 am

After the Fukushima nuclear power plant disaster caused by a tidal wave in March, 2011, Japan and several other countries questioned their nuclear commitment. Japan then took all of its nuclear power plants (NPP) offline; Germany soon followed suit. Other countries such as France and South Korea, while reviewing their NPPs, depending too heavily on them for total electrification of their countries (77 percent and 31 percent, respectively), could not.

The alternative to taking NPPs offline was to ramp up fossil fuel usage (coal, gas and diesel fuel) to make up for the electrical shortages. This was great for politics and immediate safety concerns, but horrible for the environment in the long term.

President Joko '€œJokowi'€ Widodo has now sought an ambitious 35 gigawatt (GW) electric expansion, which includes electricity generation, transmission and distribution. A total of 25GW of this would be provided by independent power producers (IPP) and state electric company PLN would provide the other 10GW.

Recently, headlines have roared that IPP are '€œready to go'€ and want to invest badly in these projects; the administration has vowed to remove people (and laws) that get in the way.

Land acquisition for the transmission of these projects has been simplified. Seems doable.

Unfortunately, if one looks closely at the type of power generation proposed, most new generation is via cheap, coal-burning plants brought online.

A visit by this writer to energy consultant Wood-McKenzie in Singapore, which provides detailed design and planning advice to energy companies, confirmed this: Fossil fuels are going to rule the day to get to 35GW in Indonesia.

There is some planning for geothermal (steam) and hydro (dams) but these alternative energies are few and far between.

Geothermal would be the most positive option for Indonesia, but technology and capital costs are high along with convoluted legal and tariff issues.

Few investors want to venture into this area without explicit guarantees. Simply, hydro and geothermal projects are expensive and slow going, and fossil fuels, especially with falling prices, are very appealing right now.

Coal is literally dirt cheap, around US$60 ton, and liquefied natural gas (LNG) is plentiful in Indonesia.

To be clear: The only way Indonesia is going to reach this ambitious electrification goal, to be able to seriously tick the '€œdoable'€ box, with current limits on land acquisition and to be taken credibly at the Paris climate accords meeting in December, is through nuclear power (that is building nuclear reactors), which, however unpalatable, must be considered in the energy roadmap base load. There is simply no running away from it. Here are few reasons why.

Only NPP can create the economies of scale necessary for broad electrification. A nuclear power plant complex can be designed and commissioned in five years, which would reach the 2019 goal.

There are several countries with proven and easily financed NPP technology that can make this happen, France with EdF and South Korea with KEPCO to name two. China and India also have nuclear technology for sale, along with  the US (GE) but US technology with a soaring dollar right now may be too costly.

Russia (Rosatom) has recently signed on to build a nuclear power plant with National Atomic Energy Agency (Batan), perhaps in Batam, but for Indonesia to allay or minimize possible concerns over a catastrophe or disaster, they must go with the companies that have excellent operations records and where there are transparent governments that will actually report and highlight any safety issues, in order to build skills competency that will avoid problems.

Once a reactor is brought online, the cost of generating electric is very cheap, in terms of upfront capital costs, fuel acquisition and enrichment and long-term environmental impact.

The discount rate means the higher the costs, the longer the project takes to complete, meaning higher realized electric prices.

In all cases nuclear is cheaper than any other energy generation with the exception of dams in China on huge rivers (which Indonesia does not have).

China has significantly lower environmental standards and, most importantly, for their expansion projects.

We can also see all types of coal and gas are more costly than nuclear, with wind and solar being prohibitively expensive.

Of course there is definitely the risk of disaster.

But that could happen with any project. Indonesia would need to enforce an ironclad safety standard, benchmarked to the best and safest NPP practices available that would have to be non-negotiable and corruption free, with the severest of penalties if compromised.

It is of note that Vietnam is in the early stages of beginning its first NPP, using Russian and Japanese technology. Each NPP brought online is expected to generate 1GW of capacity.

The alternative to nuclear (and geothermal/hydroelectric) is simply to dot the archipelago with smog and acid spewing cheap coal-fired plants. Make no doubt about it, getting to 35GW by 2019 will require many of them.

The cheapest coal available (including dirty brown coal), as part of a '€œmine to mouth'€ economic development plan, will be burned in remote Indonesian places where environmental oversight is lax in order to keep costs low and generate higher profits for operators.

This will add considerably to the fossil fuel footprint, which if global warming is the end result, will directly threaten many islands and people'€™s way of life.

Indonesia pronounced its carbon mitigation policy in Copenhagen to reduce emissions by 26 percent in 2020 from business-as-usual levels but bringing more and more coal fired plants online will clearly turn that wish list on its head and place Indonesia in the camp of fence-sitting countries, such as India and Brazil, who argue consistently for a differentiation policy (an exemption to keep polluting, as developed countries did in the past).

Simply, Indonesia cannot now default to coal-fired plants for expediency. If a responsible safety mindset can be created, nuclear energy is proven technology for a stable electric base load, which will benefit Indonesia immensely, both for energy expansion and world climate-change leadership.

The writer is associate professor and capability advisor for the School of Government and Public Policy in Jakarta.