Can Asia make it on non-nuclear options alone?

Simon Tay Today Online 20 Jul 11;

Japanese Prime Minister Naoto Kan has called for an end to the country's nuclear energy programme. This follows a similar pledge by German Chancellor Angela Merkel. Before the triple tragedy that struck Japan and problems with the Fukushima nuclear reactors, such decisions would have been unimaginable.

Predictions were instead for a nuclear energy renaissance, with the promise of abundant, cheap power that is low in carbon emissions. Post-Fukushima, long-standing minorities of anti-nuclear protestors have gained wider support in society.

But is going non-nuclear a workable policy? Or is it simply caving in to popular but temporary and perhaps overstated fears?

In Japan, Mr Kan's call is already facing opposition from pro-nuclear energy companies and Liberal Democratic Party opposition politicians. With his low poll ratings, some suggest neither he nor the policy will last.

Beyond the shadow of Fukushima, others across Asia must take into account a wider energy challenge. In the global financial crisis, worldwide energy consumption paused. But Asia continues to grow, despite the dour economic outlook in the United States and Europe, and so does its energy needs. Some talk of a power shift to Asia, but what is most certain is that Asians need more power.

Yet supply has been hit by uncertainties in the Middle East. Although we have not seen major disruptions, prices for crude oil are fluctuating, ranging up to US$120 per barrel, and most predict the long-term trend will be upwards.

Asia is not well positioned in this. The regional economies need but mostly are not self-sufficient in energy. China and India have few domestic energy sources, other than to use pollutive and carbon-heavy coal. Imports from the Middle East remain critical but look to be increasingly risky and expensive.

This sets the context for nuclear energy ambitions across Asia.

The Chinese intend to roll out the grandest nuclear power plant building programme seen in history. Countries in South-east Asia with no prior experience in large-scale, nuclear power generation - Vietnam, Indonesia, Malaysia and Thailand - plan to build their first plants.

Post-Fukushima, Beijing has called for a pause in order to relook at safety issues. Other Asians however continue to push time lines, notably Vietnam and Malaysia. In many cases, their own citizens are not consulted, despite public concerns over environmental protection, human health and safety.

The overarching context of energy policy seems lost in the anxiety to push ahead with nuclear plants. Vietnam, Indonesia and Malaysia continue to subsidise energy, increasing government burdens as oil prices rise. Their artificially low energy prices increase waste and destroy incentives to build new capacity, and invest in energy efficiency and alternative technologies.

Moreover, aside from China, others in Asia project only small percentages of their total energy needs will come from nuclear power. Indonesia targets to meet just 5 per cent of its needs from nuclear by 2025.

Given safety and security concerns, the South-east Asian nations seem to be risking a considerable amount for relatively small returns.

In contrast, studies suggest that energy efficiency measures can achieve at least the equivalent savings in power needs with safe, off-the-shelf technology at a much lower cost. Renewable energy currently costs more but with technological advances, may prove viable in the medium term.

It is in this context that Asians should watch what happens in Germany and Japan. Each derives around a hefty 30 per cent of its energy mix from nuclear. From this scale, it will take considerable effort to develop sufficient alternatives while keeping the lights on. Germany has already increased generation from renewable sources from 6 per cent in 2000 to some 16.5 per cent today.

It is not clear that these countries will persist and succeed. But if these two major industrialised economies can wean themselves off nuclear power, they can pioneer a path for others to follow to meet energy needs as their economies grow, while lowering carbon. From this, others in Asia can learn non-nuclear options.

For now, facing Asia's energy dilemma, policy-makers should consider a middle path. The option for nuclear energy need not be taken off the table until alternatives are demonstrated to produce sufficient, affordable and sustainable energy. But the other extreme to avoid is a headlong rush to nuclear power without a full and deliberate consideration of its full cost and potentially hazardous risks.



Simon Tay is chairman of the Singapore Institute of International Affairs. The SIIA's ASEAN and Asia Forum convenes on Aug 4 with a focus on economic opportunity, energy needs and environmental concerns in the region.