The case for nuclear energy

Electricity is an essential component of socio-economic development for any society. Every aspect of human advancement requires easy access to an economical source of electricity.

Electricity can be generated through various fuels and technologies, each with its own pros and cons. However, electricity cannot be economically stored, and the demand-supply balance must be maintained in real time. As a result, expanding the electricity supply system is always subject to a range of considerations. It is widely accepted that relying on a single fuel or technology to meet all the electricity needs of a sizable country like Pakistan is not advisable.

Pakistan has several options to meet its growing electricity demand, including coal, gas, oil, nuclear, and VRE (variable renewable energy, such as wind and solar). Selecting the right combination of these options is essential for an optimal supply mix. However, forming this mix requires policies that are crafted with a long-term vision and an assessment of future needs. The electricity generation industry is investment-intensive and requires substantial lead time for full expansion. Therefore, considerations such as economics, environmental impact, supply security, system operation constraints, economic impact, and the country's financial situation must all be factored into the capacity expansion strategy.

Indigenous fossil fuels are typically prioritized if they are reasonably available, to capitalize on long-term benefits. However, burning fossil fuels for electricity generation is inherently linked with greenhouse gas emissions, which contribute to climate change. Since climate change is a global issue, efforts are being made to reduce fossil fuel use. These efforts include multilateral treaties and policy instruments aimed at minimizing fossil fuel consumption. For example, the World Bank and the Asian Development Bank have decided not to finance any new fossil fuel exploration or power generation projects.

Hydropower plants with reservoirs are a favored option among electricity generation technologies due to their energy storage capability and socio-economic benefits. However, their potential is limited by natural factors, such as the site's geological structure, location, water inflow availability, and public acceptance. Pakistan is fortunate to have substantial hydropower potential in the north, a reasonable share of which has already been exploited. It is worth noting that. while receding northern glaciers may increase inflow, the IPCC has predicted that water flow may begin to decrease in the latter half of the century.

Run-of-river (ROR) hydropower plants are also an economical and socially accepted option for power generation. In Pakistan, however, electricity generation from ROR plants is seasonal and available at full capacity only during periods of high water inflow in the Indus River System.

Over the past decade, VRE sources, particularly wind and solar, have entered Pakistan’s power market. While onshore wind has limited potential, there is substantial potential for solar power generation. However, VRE sources are intermittent and unreliable, which requires nearly equivalent backup capacity and technologies with high ramp rates to manage fluctuations in supply. As a result, the overall cost of the system rises as the share of VRE increases due to the need for standby capacity.

Nuclear technology represents one of the highest levels of engineering precision achieved by humanity. The rigorous safety standards associated with nuclear energy make it capital-intensive and challenging to implement. Nuclear technology has been in commercial operation for over seventy years and remains a prime choice in many developed countries, thanks to its high capacity factor. However, this technology requires significant efforts in human resource and knowledge development, which only a limited number of countries have successfully achieved. The importance of nuclear energy has recently grown due to concerns about climate change, and during COP28, it was formally included as a solution for addressing global climate change issues.

In recent years, several developing countries have initiated nuclear energy programs. Bangladesh and Egypt are constructing their first nuclear power plants (NPPs), while countries like Saudi Arabia, Jordan, and Uzbekistan are in the process of developing the necessary infrastructure.

In Pakistan, nuclear-generated electricity was first produced in 1972, when the 137MW Karachi Nuclear Power Plant (KANUPP) began supplying power to K-Electric. This achievement made Pakistan the 15th country in the world to establish an NPP. The plant, initially designed for a 30-year lifespan, successfully operated for 50 years before being permanently shut down for decommissioning in August 2021.

Currently, six nuclear power plants (NPPs) with a total gross capacity of 3,530MW operate in Pakistan, with four located in Chashma and two in Karachi. The operating cycle of NPPs at the Chashma site is 14 months, while that of the Karachi site is 18 months, meaning that once fueled, these plants can operate continuously for these periods without requiring additional fuel. This feature makes NPPs a reliable, secure, and stable electricity generation option among thermal power generation technologies.

According to Nepra’s statistics for July 2024, the average fuel cost of Pakistan’s operating NPPs is Rs1.5 per unit. This cost is significantly lower compared to RLNG (Rs26.3 per unit), imported coal (Rs15.5 per unit), local gas (Rs13.9 per unit), and local coal (Rs11.0 per unit). The fuel cost of NPPs is also highly stable, unlike the erratic and sometimes chaotic prices of fossil fuels. Over the past ten years in Pakistan, the average nuclear fuel price has increased from about Rs1.1 to Rs. 1.5 per unit, mainly due to the devaluation of the Pakistani currency.

The low fuel cost of nuclear energy also ranks high on the Merit Order prepared by NTDC for economical electricity generation. Consequently, maximizing the use of NPPs is preferred by operators to keep overall system fuel costs low. Nuclear power contributed around 18 per cent of the total electricity generation in fiscal year 2023-24, with a share of 25.8 per cent in March.

Pakistan's recent slow economic growth has reduced electricity demand, further impacted by the rise of rooftop solar systems. Meanwhile, a significant portion of electricity generation capacity based on imported fossil fuels was added to the system, causing a sharp increase in electricity tariffs.

In this context, some commentators have attempted to label nuclear energy as an expensive option by focusing solely on capacity charges, overlooking the high capacity factor and the low fuel cost of nuclear generation. In reality, the current average tariff for NPPs in Pakistan is only Rs14.8 per unit, which will drop to single digits after debt repayment on the most recent NPPs. The debt period for each NPP is 12 years, while the lifespan of these plants may extend beyond 80 years.

Nuclear power also plays a crucial role in conserving foreign exchange reserves. Despite having more than sufficient installed capacity, Pakistan's power system faces energy (fuel) shortages due to rising energy prices and a lack of foreign exchange reserves. This shortage negatively impacts the country's economy and social life. In this context, Pakistan’s NPPs are essential, as they not only help conserve foreign exchange reserves but also support the country's power system during crises.

Imagining a scenario without NPPs for FY2023-24, the system operator would likely have to rely on imported fossil fuels such as coal, RLNG, and furnace oil. Based on Nepra's reported monthly prices, the additional financial burden on Pakistan’s power system would be around $1.1 billion to $2.3 billion in foreign exchange. Generating the equivalent amount of nuclear electricity with imported coal would require an additional $1.1 billion, with costs rising to $1.6 billion for RLNG and $2.3 billion for furnace oil.

These facts clearly demonstrate that nuclear energy is vital to maintaining low and stable electricity generation costs in Pakistan. The minimal and stable fuel cost of nuclear energy contributes to an affordable, secure, and reliable electricity supply. Therefore, a practical share of nuclear power is essential for a sustainable energy supply system in Pakistan. While other power sources will continue to contribute to the energy mix, nuclear-generated electricity provides the stability needed for Pakistan's power equation.

The writer is the executive director of the Center for

International Strategic Studies (CISS) and a former ambassador.

Email: sarwarnaqvi@yahoo.com