The vast growing economic development in South East Asia (ASEAN) region leads to the increase of energy demand particularly electricity. Almost all the ASEAN member countries are planning to develop nuclear power plant in the near future, despite having quite enormous number of renewable energy potential such as geothermal (Indonesia and Philippines), high solar radiation (between 3 - 5 kW/m 2/day), biomass and hydro the countries still required more sophisticated and more reliable source of power for its based load such as nuclear power. Philippines has built the first nuclear power plant back in 1980 in Bataan, however the commissioning of this plant was postponed due to the political power turbulence. The question whether nuclear or renewable energy could be the best option in term of cost effectiveness will be assessed in this paper. The optimization methodology has been used by using GAMS (General Algebraic Model), the econometric based on time series (1999-2010) is used to predict the increases of national power generation up to year 2030. The increases of electricity demand is assumed to be linear with the increased country GDP (Gross Domestic Products) and population. The optimization predicted that In Malaysia, the renewable energy could be the best option, since it shows lower cost compare to the fossil fuel based power plant. Geothermal in the Philippines shows cheaper to be commissioned compare to fossil fuel and nuclear power plant. While Indonesia the cost of nuclear still not competitive enough compare to fossil fuel, mainly due to cost of subsidy.
Despite having more than 28,000 billion barrels of oil reserves, the member countries of ASEAN (Association of South East Asian Nations, perhaps except Brunei Darussalam) are predicted to become a net importer of oil in the next 5 - 10 years. Apart from oil reserves, the region has some other natural resources potential such as natural gas and coal, however these resources are fastly depleting due to the rapidly growing economy in this region. Anticipating to this downward movement of fossil energy resources, most countries have begun developing renewable energy and even consider developing nuclear power plants to reduce their dependence on fossil energy and in some respects to help mitigate the impact of climate change.
The reserves on natural gas, for instance in Indonesia and Malaysia alone, are proven to be more than 5.5 TCM (Terra Cubic Meter) or almost 50% of the reserve available (over 15 TCM) in the whole Asian region. The total reserves of more than 4300 MMT (Million Metric tones) coal in Indonesia and Thailand (both bituminous and lignite) represent the biggest fossil fuel reserves in the region [
Indonesia is ranked fifteenth in the world coal proven reserves, much lower than China which holds the third largest coal reserve (ca 115,000 MMT). The region total final coal consumption increased from 248.7 Mtoe in 1997 to 1620 Mtoe in 2006, to meet the electricity need which gradually increased from 369 TWh in 2000 to 3600 TWh in 2010 [
The oil price boom in 2007-2008 was the crucial moment for policy makers in ASEAN member countries to consider reducing its dependence on fossil fuels by shifting to other renewable energy resources. According to the prediction by Asian Center of Energy (ACE) [
Energy Planning frequently consists of three typical growth scenarios: high, low, and medium (moderate). These types of scenarios sometimes are dangerous since people generally think that the moderate scenario is the one that is most likely to happen [
Currently, most of the planning scenarios for power generation are aimed at reducing CO2 or Green House Gases (GHG), with somewhat less consideration on economic factors. Yet, it is important to show a possible future energy scenario based on its economics merits. Power generation mix which shows minimum cost required to produce electricity is still crucial, as the region is facing the situation where vast growing development (with various priority, from poverty alleviation to infrastructure development), will lead to financial constraints. The cost of generated power not only limited to fossil fuel as major mainstream concerned but also includes the expenses of investment (construction and demolition) operation and maintenance cost and last but at least, which most of the researcher are avoiding is the cost of subsidies. As reported by Koplow subsidies to the nuclear fuel cycle have often exceeded the value of the power produced, it is accounted approximately 70 to 200 percent of the projected value of the power [
This article analyse the issues using top down approach with consideration to various cost variables (such as investment cost, decommissioning cost and cost of subsidy), with the objective of finding the least cost possible in the three main developing countries in ASEAN region:
Malaysia, the Philippines and Indonesia.
Various cost variables had been used as constrain in the model, the future electricity demand for each countries predicted by using econometric, and the optimization model has been developed by using General Algebraic Model (GAMS). As seen in
The data on electricity consumption and production was collected from various sources [7,8], while the cost of power generation was collected from IEA and NEA [
result of both models then compared and analyzed.
It is important to develop energy planning in the countries with vast growing economies like in the ASEAN Region, since economic and energy are strongly interrelated. Various studies show a close inter-relationships between the economic development and the energy use (particularly electricity) [
Some countries in the ASEAN region had produced reports on energy planning in short term (5 years) to long term (30 - 40 years). In the case of Indonesia, the National Energy Planning whichcovers 30 - 40 years in the future has passed the National Energy Council (DEN) review and was submitted to the Parliament (DPR RI) early 2011.
Meanwhile, based on APEC Report (2006), Malaysia planned to increase their electricity consumption up to 274 million TWh by 2030 [
The Philippines Energy Plan (2009-2030) [
The study from which this article is based compares the result of the simulation model (reference) input by government energy planning for year 2030 among three countries in the ASEAN Region, namely Malaysia, the Philippines and Indonesia with cost-effectiveness using cost-optimization model, which shows the optimum power generation mix (based on minimum cost required).
In the cost-optimization model, some parameters from many resources has been used (see
The model also takes into account some constraints by means of power plant capacity, power plant efficiency, power plant lifetime and plant factor (capacity factor). The definition of constraints is the limitation or boundaries where the result of the computation will refer to the limitations given by input; for instance, on power plant capacity, we use maximum capacity determined by the government for certain power plant by fuel type (e.g. capacity of hydro based power plant in 2030 for Philippines is 6.6 GW), then the computational process will limit of those maximum capacity given by the input.
Plant efficiency refers to how effective the power plant to convert primary energy to electricity, the plant efficiency used in the model is ranged from 20% (geothermal) to 85% (Hydro and Nuclear). Capacity factor is a value used to express the average percentage of full capacity used over a given period of time [
The assumptions on Gross Domestic Product (GDP) and population growth have been applied and the estimation calculation was based on the information given by the respective government (as seen in
Philippines assumes gaining more than double its GDP and increases its population by more than 20 million by 2030. Electrification ratio in Indonesia will reach 85% and 100% for both Malaysia and the Philippines, with the assumption that the average losses of transformation and distribution around 5% - 10% for all studied countries.
Malaysia’s economy is expected to grow moderately over the outlook period with an annual average growth rate projected at 4.8 percent. The strongest growth will be from the industry (mainly the manufacturing sector) and the services sectors, attributing shares of 54 and 46 percent to total GDP in 2030 respectively. The electricity demand in Malaysia will increase by 4.7 percent per year over the outlook period, to reach 274 TWh in 2030. The growth in electricity demand is heavily influenced by strong demand from the industrial sector, which is projected to increase at 5.4 percent annually over the outlook period.
The reference scenario (government plan) for the Philippinees according to the analysis conducted by the government is considering green electricity mix, includeing wind power, geo-thermal and hydro as renewable resources and nuclear, as the alternative resources [13, 15].
For the Indonesian case, the projection shown by the National Energy Planning (NEP) was based on the recommendation from Dewan Energi Nasional (The National Energy Council). The Council’s recommendations for 2030 assumed the utilization of all kinds of energy (including fossil energy and nuclear) without discrimination, reliance on renewable energy sources, with consideration with three main aspects (energy security, economic growth and environmental protection). The assumption uses estimation on 190 GW as maximum capacity and 910 TWh generating power in 2030.
The similarities of the future power generation mix in
these three different countries are the willingness to install NPP in year 2030 or even earlier. Malaysia plan to have 17% NPP share in its power generation mix, while Philippines and Indonesia plan to have 14% and 4% respectively. So is the willingness to increase its renewable energy in the future without considering the economical potential (especially the cost cycle of the power generation) that may occur in the next decades is acceptable enough?
The Philippines is a country which has relatively large geothermal potentials and lutilization, the government plan in 2030 shows the geothermal power plant will share approximately 10 percent to the total energy mix, but the cost efficiency model resulting otherwise. The government should increase its capacity up to 63% of its share or in more than 19 GW in 2030 to coup with the electricity demand. The country is also famous for its strong winds, therefore the governments is planning to install wind power generation as the backbone of its electricity generation. However the cost of wind turbine shows a huge burden for the government to carry, therefore instead of increasing the wind power generation, it is suggested to increase its coal power generation up to 17% from its share (
Indonesia is the largest archipelagic country in the world which covers 1,906,240 km2 land area and consists of 17,506 islands. Indonesia has a thriving economy at the intersection of the Pacific and Indian oceans, between Asia and Australia and it is located at 95˚ to 141˚ eastern longitude, and latitude between 6˚ North and 11˚8' South 47 [
From the perspective of cost effectiveness in Indonesia, the model revealed that it is necessary for the country to maximize its renewable energy potentials (primarily geothermal and hydropower) (see
2030. As a result, the country is compeled to rely on fossil fuel particularly the natural gas and coal, asit is predicted that the cost of crude oil will drastically increase during the next 10 - 20 years.
As for nuclear power, according to IAEA [
But in the aftermath of the recent accident at Fukhusima Dai-ichi, Japan, and due to some hidden costs of NPP (such as cost of subsidies and recovering cost, decommissioning of the plant and waste treatments which in many cases are not included in the energy generation cost calculations), the nuclear power generation will likely be much more costly. Compare to the rather competitive proce of fossil fuel which the countries has relatively high coal and natural gas reserved.
However the market condition of NPP might change if thorium were to be used for the next generation of NPP (for which the we predict to happen in the next 30 - 40 years), or if the next generation of nuclear power plant comes into place, such as High Temperature Gas-cooled Reactor (HTGR), which is predicted to be commercialized by 2030 and its price is cheaper by one third compared to the current nuclear reactor generation [
On the other hand, the shares of renewable energy in Indonesia will definitely increase if the efficiency of to convert the resources to energy is increasing. Inline with the development of high efficiency technology in order to reduce cost of transformation and loss decentralized type power generations is necessary (since the country consist of thousand island), decentralized RE technology such as Concentrated Solar Power (CSP), Solar home system (SHS), biofuel/biodiesel small refinary in the next 30 - 40 years.
We believe that the analysis using the model discussed in this article will be of benefit to the policy maker sin considering what kind of power generation mix suitable for the country in the next 10 - 20 years or even longer term (>30 years), taking into account the life cycle cost of various power plants from fossil energy based, renewables to nuclear energy.
The model also suggested that from present to 2030 the cost of renewable energy technology will gradually reduced and the cost of fossil fuel and uranium will increase. The combination for optimum power generation mixture based on cost shows some countries, which have enough fossil fuel, should utilize its resources (such as Indonesia for coal and NG and Philippines for coal) as well as maximize its renewable energy potential (Geothermal, Wind and Solar). Rather than continue planning to develop NPP based on current technology such as Boiled Water Reactor (BWR) and Pressurized Water reactor (PWR) technology. It is necessary to develop the model up to year 2050, which author think that nuclear may be one of the possible options for the region, therefore some necessary acts for acknowledging and learning the new technology of NPP such as policy and human resources is important. Other stories will be tremendous energy efficient measure in order to reduce the high demand of electricity demand in the next 20 - 40 years.