Indonesia should make nuclear energy a viable option

by Satya Hangga Yudha Widya Putra

This article was originally published in Globe Asia.

Indonesia is a democratic archipelago nation that consists of 255 million people, 13,000 islands, separated into 34 different provinces. It is a resource-rich country with a demographic dividend and a growing economy. As a nation, Indonesia
 still relies heavily on fossil fuels as a primary component in both its energy and power mix.

In 2014, non-renewable energy accounted for 88% of total electricity generation, making Indonesia one of the largest greenhouse gas emitters 
in the world. After participating in
the COP21 meeting that took place in Paris in December 2015, the country set ambitious goals to reduce its CO2 emissions. Indonesia plans on slashing its CO2 emissions by 29% by 2030,
but with international assistance, the percentage can rise to 41%.

To reach these targets it is imperative for Indonesia to cut back its use of coal and accelerate its progress on renewable energy, natural gas and, more importantly, begin to enact its long-studied nuclear power plants
for electricity generation. Although implementing green energy, boosting use of natural gas and slashing the utilization of coal seem rational and doable, the Indonesian government has given nuclear power a NIMBY
(not in my back yard) response by making it the last option for the next 30 years in its National Energy Policy (Government Regulation No. 79/2014) instead of a viable option.

Globe Asia September 2016 Hangga Image 2

Karaha Geothermal station, one of Pertamina’s total project from beginning to transmission

This does not mean that Indonesia does not have any ongoing nuclear projects. Currently, there are three, located in Serpong (30 MW G.A. Siwabessy Multipurpose Research Reactor), Bandung (250 kW TRIGA Mark II Reactor) and Yogyakarta
(100 kW TRIGA Mark II Kartini Reactor). These three reactors are used to produce isotopes for research purposes in agriculture and the pharmaceutical industry.

Indonesia is at the forefront
of nuclear research and feasibility studies in Southeast Asia, but there
has not been a slither of action to commercialize nuclear energy for electricity in either the executive or legislative branches of the Indonesian government. Plans and proposals were put in place, but never came to fruition.

Considering that nuclear is a form of power generation that does not produce CO2, that has a high energy and power density, a high capacity factor (92%) and value (0.1 – 1.65 GW) and a heat rate of 10,400 Btu (33% efficiency), this is a major hindrance for a nation that is trying to limit its carbon footprint, carbon intensity (tCO2e/MMBtu), and CO2 emissions.

The Indonesian government must however consider several elements before committing any form of investment in nuclear energy. Nuclear power plants have to be situated along the coast since they require vast amounts of water. Considering that Indonesia is located along the Ring of Fire, it is a nation notorious for having some of the largest earthquakes, volcanic eruptions and tsunamis in the world. Hence, it is crucial for
the Indonesian government to place any nuclear plant in a relatively safe location.

Experts and managers will have 
to deal with the challenges of seismic hazards and the risk of radiation leakages. Areas in Indonesia that are suitable include Muria (three different locations in Central Java), Banten, Bangka Island in Bangka-Belitung (two locations, Muntok in West Bangka
and Permis in South Bangka), and
 in Kalimantan. These are all on the northern side of the Indonesian islands and far from tectonic subduction zones. In other words, they do not sit on the Ring of Fire.

Bangka is far from volcanic activity. It has a low seismic hazard, has experienced no tsunami warnings, and has a small population. Site evaluation of both Muntok and Permis suggests they are suitable for a power plant with 10 GWe capacity that can meet over 40% of demand in Sumatra, Java and Bali. These three islands
are the main centers of demand, reducing the challenges of building sub-sea cables for transmission and distribution of electricity from the nuclear power plants.

Collaboration between national and provincial governments is essential in driving the growth of nuclear
energy in these potential locations.

The Indonesian government and
the National Nuclear Energy Agency (BATAN) need to maintain working relationships with experienced nuclear countries like the United States and Russia along with the International Atomic Energy Agency (IAEA) to write and help enact proper safety procedures and create a legal framework for both foreign and domestic companies that want to promote and use nuclear energy in Indonesia.

While a thorium-based nuclear power plant cannot be developed into nuclear weapons, does not pose the risk of a melt-down and can burn nuclear waste, there are several challenges associated with uranium. Uranium
can be used for nuclear weapons,
cause a melt-down, and emits waste.
As a result, a legal framework needs
to be created that revolves around reprocessing used fuel to recover uranium and plutonium for reuse in electricity production, as mixed-oxide fuel in conventional reactors and fast neutron reactors rather than chemical weapons.

To further ensure minimal catastrophe or disaster, Indonesia must work with companies that have excellent operational records and transparent governments that are willing to report or highlight any safety issues. Indonesia should allocate a portion of its proposed energy-security fund (DKE – Dana Ketahanan Energi) for a spent fuel storage space for its nuclear power plants.

With help from third parties, Indonesia will have to sign a memorandum of understanding on nuclear energy. In this memorandum, the country should adopt proper procedures and make the risk of earthquakes a top priority.
These other countries can also aid

Indonesia in providing the necessary technologies. Much of the safety regulations depend on standards in areas such as radiation protection, predisposal management and emergency preparedness and response, and should include standards on how strictly these rules are put in place.

Furthermore, the Indonesian government should create a national nuclear energy policy that revolves around mining for nuclear fuel, processing and extracting nuclear fuel from ore, producing electricity through the use of nuclear power, storing and enriching spent nuclear fuel, and nuclear fuel reprocessing.

Since nuclear power plants take time to build and have a high upfront fixed cost, the government needs to be able to properly allocate its state budget so it can fulfill the necessary funding. To drive out fossil-fuel-fired power plants, Indonesia can impose a clean power plan (CPP) or carbon tax ($/tCO2) to discourage the use of coal and make nuclear more competitive.

Because of the 9.0 Richter scale Tohoku earthquake and tsunami
in 2011 that caused the Fukushima nuclear accident in Japan, Indonesia has to increase public awareness about the risks and benefits of these reactors through education and
the dissemination of information.
The nation needs to build tsunami walls and bridges, acknowledge
the public’s point of view, submit recommendations, and increase safety standards.

These responsibilities would fall under the authority of Indonesia’s Nuclear Regulatory Agency (BAPETEN), which regulates and licenses nuclear applications. The agency is subject to review by the IAEA.

Though nuclear has a high
capital expenditure and a very low operational expenditure cost ($/MWh) that situates itself to the right of a merit order graph, its marginal cost
of generation and variable cost is less than most sources of energy. Nuclear’s marginal cost of generation is low since nuclear reactors cost a fraction of what utilities pay for gas and coal-fired power plants.

If Indonesia can successfully rely on nuclear energy, then it will save long-run costs regarding capital, fuel enrichment and acquisition, and long-term environmental impacts.
The discount rate implies higher
costs, which means that the longer
the project takes to complete, the higher the realized electric price. If well-established, nuclear can have
a competitive power price over coal (¢5.6/kWh), natural gas (¢4.8/kWh), wind (¢18.4/kWh) and solar (¢23.5/ kWh). Nuclear can always meet demand during base-load, medium- load and peak-load hours. With regards to the chemicals needed for nuclear energy such as uranium and thorium, Indonesia has an abundant amount of these in the country. West Kalimantan has deposits of uranium and Bangka Belitung has thorium. So, unlike Japan; it does not need to rely on imports.

Nuclear power plants can be
a driver for the country to meet President Joko Widodo’s goal of 35 GW worth of power to meet the nation’s energy needs. Only nuclear power plants can create the economies
of scale necessary for widespread electrification.

A nuclear power plant can be designed and commissioned in four to five years. Indonesia should be able to build a 10-MW experimental power plant because the country already has research reactors, safety laboratories, waste treatment centers, and enough experts. Over time, the more nuclear power plants Indonesia constructs, the higher the learning rate on its experience curve, thereby reducing the levelized cost of energy (LCOE). Considering that neighboring

countries such as Vietnam, Thailand, and potentially Singapore are building and taking advantage of nuclear energy, it does not seem rational if Indonesia does not start generating power using nuclear for the sole reason of safety. Why? Because if any of these Association of Southeast Asian Nations (ASEAN) countries suffers

a nuclear accident, then Indonesia will be affected, with or without its own nuclear power plants. These countries could sell excess capacity of electricity from their nuclear power plants to Indonesia, with a potentially detrimental effect on Indonesia’s energy sector.

It is apparent that Indonesia has all the capabilities to begin taking advantage of nuclear for power generation; it just has to turn this dream into a reality.

Satya Hangga Yudha Widya Putra is graduate student in global affairs with a concentration in environment/energy policy at New York University.

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