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Wood Mackenzie’s South East Asia Gas and Power Service recently published ...

Wood Mackenzie’s South East Asia Gas and Power Service recently published a report analysing nuclear power as a possibility for the region. The report says that Vietnam and Thailand will be the first to see nuclear plants come online in the region, but from 2025 at the earliest. Elsewhere in Indonesia, Malaysia and Singapore, nuclear power will unlikely be commissioned. Head of South East Asia Gas and Power Research, Graham Tyler says: ‘South East Asian countries are exploring the possibility of harvesting nuclear energy because electricity demand in the region is expected to triple by 2030, with an average growth of 6%/y. This implies 200 GW of net capacity additions by 2030 across the region. Strong economic growth and declining local, cheap gas reserves will see an increasing challenge to governments in maintaining energy security of supply. We see Thailand and Vietnam leading the way in nuclear power generation, although at the very earliest from 2025, and we think it will more likely happen only a few years beyond that.’ Thailand has recently started speeding up its process for nuclear power development but will have a challenge in getting public support. They have to consider long-term security of fuel supply and increasing demand as piped gas reserves are set to deplete, increasing dependence on LNG, while public opposition will limit coal’s role. For Vietnam, Wood Mackenzie says the immediate focus should be on meeting short-term power shortages. However, in the long term the government will support nuclear diversification. Wood Mackenzie says that Indonesia will not need to opt for nuclear energy with domestic coal, geothermal and gas resources available and also the higher costs involved in building nuclear due to its earthquake prone geology make it less attractive. Peninsular Malaysia is more likely to pursue the option of coal-fired plants as there are no strong political incentives or economic benefits as pull factors. Lastly, Singapore has no firm plans for nuclear energy and neither of the technologies deemed most appropriate have proven to be commercially viable. Tyler outlines the three phases of nuclear power development: ‘Firstly, governments need to set up a comprehensive nuclear legal framework with regulatory systems and operation plans. Secondly, an independent regulatory authority needs to be set up to implement the operation plans according to International Atomic Energy Agency (IAEA) standards. Lastly, there needs to be supervision during implementation as well as continued international commitments to maintain the confidence of neighbouring states.’ ‘No countries currently exploring nuclear power in the region have completed the first phase of the process, although some have embarked on the second phase. We therefore believe that the prospect of nuclear power being installed by 2020, as targeted by Vietnam and Thailand, appears to be too optimistic. Their current stage of development is inconsistent with the lead time required to construct a new plant.’ The report’s breakeven analysis shows that the most economic form of meeting energy security requirements will still be coal-fired plants. Tyler summarises: ‘Locally sourced natural gas will be an option, but because the region’s gas resources are declining, nuclear is an alternative given that the price of LNG is also likely to be high. Wood Mackenzie’s analysis shows that the move to nuclear power is more a strategic decision to diversify fuel options than based on economics.’

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