Singapore-based think tank moots nuclear inclusion in Asean Taxonomy

A SINGAPORE-based independent think tank has proposed the inclusion of nuclear power generation in the regional sustainable finance framework to open up financing options for such projects in South-east Asia.

The appeal came as the Asean Taxonomy, following its update in March to include coal phase-out activities, still made no mention of nuclear activities, while the European Union (EU) Taxonomy had made provisions for them last year.

The policy brief, published by the Centre for Strategic Energy and Resources (CSER) on Aug 1, highlighted that players in Indonesia, Thailand, the Philippines and Vietnam are exploring the development of small modular reactors (SMRs) as a way to decarbonise power grids.

Despite the controversy around nuclear power – due to concerns around nuclear weapon proliferation and accidents – more policymakers have been considering its potential as a cheap and efficient non-fossil energy source, especially with advancements in SMR technology.

SMRs feature small cores that produce far less heat than those in conventional reactors, so they are much less likely to overheat. With a power capacity of up to 300 MW per unit – about one-third of the generating capacity of conventional reactors – they are envisioned for industrial applications or remote areas with limited grid capacity.

But the authors said it is “uncertain” whether the regional projects could progress, as public and investor sentiment remains cautious towards nuclear power plant development here. 

The Asean Taxonomy taking a leaf from the EU Taxonomy could change that, and stimulate the robust public-private partnerships essential to the transition to a low-carbon energy future, they said. 

The policy brief’s authors are CSER co-founder and CEO Victor Nian, and Erik Dagorn, the nuclear projects director at French certification company Bureau Veritas.

“Without action to provide more support for nuclear power, efforts towards energy transition will be harder and more costly in Asean,” they said.

In response, Eugene Wong, the CEO of Sustainable Finance Institute Asia, which hosts the Asean Taxonomy Board (ATB), told The Business Times (BT) that the board has not made a call on nuclear energy as it is prioritising technology that is already in use.

In a separate statement to BT, another ATB representative said the taxonomy is intended to serve as a “common building block” that enables an orderly transition and fosters sustainable finance adoption by all Asean member states. “Its ongoing development will thus prioritise economic activities that are already a common feature in most or all (member states),” the representative said.

Nevertheless, ATB will “continue to review activities” that can be included to support decarbonisation and an orderly transition in Asean, he said. Fundamental to being included, however, is a need for the economic activities to meet the taxonomy’s environmental objectives, which are intended to be universal and applicable to all Asean member states, in line with national environmental laws, he added. The objectives include the protection of a healthy ecosystem and biodiversity.

Asked why countries are not already pushing forward with nuclear power if the technology is already present, Dr Nian said SMRs are still under development with a 2030 timeline to commercialisation, while conventional nuclear technology remains controversial due to the 2011 Fukushima nuclear disaster.

EU as reference?

With the European Commission’s treatment of certain nuclear activities as “transitional” under its Complementary Climate Delegated Act, Dr Nian and Dagorn highlighted in the brief that the EU developments may serve as a “valuable reference point” for Asean.

Take for example the Do No Significant Harm (DNSH) screening criteria used by both the EU and Asean taxonomies. It rules out activities that significantly harm other environmental and social objectives while checking the box on climate change mitigation.  

The authors noted that the European Commission’s Joint Research Centre had studied nuclear energy’s DNSH aspects to find no science-based evidence suggesting that nuclear energy does more harm to human health or to the environment than any other electricity production already included in the EU Taxonomy.

The authors added that studies have shown that nuclear power, when assessing the number of fatalities per kilowatt hour produced, is “one of the safest energy sources, second only to solar”.

“Unlike renewables, nuclear energy is a stable baseload power source,” Dr Nian told BT, while pointing out that renewable energy, in any case, would not be able to reach the scale required to meet Asean’s future energy demand.

Rather, rapidly scaling up renewables would introduce problems with the power grid due to intermittency and weak grid infrastructure, Dr Nian said, adding: “This is not a problem that can be simply solved by adding battery storage.”

With nuclear energy, Dr Nian said, it is possible to attract infrastructure investment partners to help modernise the power grid and enhance the resilience of existing infrastructure to meet a higher standard. “All that would... come with the benefits of creating more business opportunities for the local companies, generating more jobs, and training a skilled workforce,” he also said.

Time is of the essence, he added. “Nuclear (power) is quickly moving from an option to a necessity, given the regional energy, economic and environmental goals. If (it) is not included in the taxonomy in time, sustainable financing would not be available to nuclear energy projects,” he said.

“That means while the EU is enjoying sustainable financing for nuclear projects, Asean is blocking our own opportunity for reducing the cost of nuclear energy deployment by not including nuclear in the taxonomy.”

Radioactive waste

Opposing voices have spoken of the difficulty in handling the huge loads of toxic waste associated with nuclear power production. In addressing this, Dr Nian said nuclear power plants do not produce as much radioactive waste as portrayed by anti-nuclear groups “under normal circumstances”.

To demonstrate, he said a typical nuclear fuel pellet weighing 10 g produces the same amount of energy as 1.3 tonnes of coal, six barrels of crude oil, or 962 cubic metres of natural gas.

With 8.8 g of the pellet being uranium – the useful part for producing energy – a 1 GW nuclear power plant produces just around 21 tonnes of spent fuel a year. This is the radioactive waste that needs to be treated, sealed and stored underground. SMRs produce a fraction of this, being much smaller in capacity, he noted.

He added that there are “very stringent” international requirements on spent fuel and radioactive waste management, and some nuclear vendor states offer spent fuel or waste take-back as part of the offering to newcomer countries, which can help address part of the problems.