Malaysia's Tenaga Nasional Plans Pre-Feasibility Nuclear Power Study with Korea Electric Power

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Researched by Industrial Info Resources (Sugar Land, Texas)--Tenaga Nasional Bhd (KUL:TENAGA) (TNB) (Kuala Lumpur, Malaysia), Malaysia's major power utility, is strongly rallying for nuclear power in order to ward off an imminent power shortage in the country. The company, along with Korea Electric Power Corporation (NYSE:KEP) (Seoul, South Korea) will be conducting a pre-feasibility study for a nuclear power plant in the region. However, the location of the plant has not yet been finalized.

TNB had considered the nuclear-power option a couple of decades ago, but the alternative was discarded in favor of the newly found natural gas in Terengganu, on which the Malaysian power sector has been thriving since. These gas reserves have been predicted to last only for another decade, after which the country will be forced to fall back on other energy sources, which may not be environment friendly or provide sufficient power to meet the demand. Though other gas fields are present in the region, they will be unable to cater to domestic demand because of long-term export contracts. Given the above options, nuclear energy seems to be the only source that will drive the country's journey toward becoming a developed nation by 2020.

TNB is planning to set up its first nuclear plant by 2025. Company sources reveal that this could be the first of possibly four such plants in the region. The costs associated with the power plant are expected to vary depending on the design chosen. A 1,000-megawatt (MW) plant of U.S. design is expected to cost $4 billion; a Chinese model of the same capacity will cost half the price, while a Russian model is expected to have a price tag of $2.82 billion. In addition to the plant expenses, the company will also spend about $2 billion on feasibility and research exercises. At present, TNB owns and operates several power plants in the Malaysian Peninsular region with a combined capacity of 11,296 MW, comprising a mix of 50% gas, 35% coal, 14% hydro and about 1% of oil-based power.

Malaysia's energy demand is expected to reach 5,172 million tons of oil equivalent by 2013, which indicates a 39.9% growth since 2007. During the same period, the country's power consumption is also expected to rise to 134 terawatt hours (TWh) from 98 TWh in 2007. In this scenario, the country will need twice its present imports of coal to meet the energy demand and will need to obtain plant sites close to the shipping routes to facilitate coal transportation if it chooses coal-fired power. TNB may alternatively generate about 28,000 MW of hydroelectricity from the Sarawak Rivers; however, only 10,000 MW of this could be transmitted to the mainland.

TNB is therefore pushing for a government decision on the nuclear option by 2013 in order to go ahead with its nuclear plant venture. Nuclear power is expected to provide a reliable, reasonably priced source of base-load energy in the coming years. According to the company, the radiation risks associated with nuclear plants have been considerably minimized, with high safety measures undertaken to contain radiation levels within 0.05 millisievert per year, equivalent to a single x-ray examination. Also, there are facilities to reprocess used fuel, the technology which could enable the country to produce weapons-grade fuel which, in turn, would mean international permitting.

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