Open letter to the Honourable Shadow Minister for Energy regarding Malaysia’s Nuclear Plans
The planned reactor will require 800 tons of fuel to start off, and about 400 tons per year to generate the 2GW required. At current prices, of around USD$42 per pound of uranium, this works out to USD$ 1,185,172,800 for initial start off and USD$ 592,586,400 per year of operation, raw fuel costs alone, in today’s Dollar.
By Jeevindra Kumar
First of all, this letter is addressed to a phantom as there needs to be a shadow cabinet before there can be shadow ministers for anything.
Esteemed Minister, the incumbent government is planning to build a nuclear reactor by the year 2021 that will yield 2000MW’s of power for our future energy reserve needs. The cost is estimated by TPTB to be around USD 6.1 billion (2010 Dollars), which is par for the course at the moment.
During this time, China will build 60 reactors of 1000MW each, to reach a capacity of 85 GW, while India will quadruple its nuclear capacity to 20 GW. Leave aside the other minnows that are turning to nuclear power, these two juggernauts alone are expected to raise the demand for nuclear fuel, reactor knowhow and costs to levels not seen since the peak of the Cold War. This raises many questions, and permit me to ask them on behalf of all current and future taxpayers, and future TNB bill payers.
Esteemed Minister, how are we preparing to hedge against the rising costs of building the reactor? What recommendations can be raised to pre empt yet another ‘sweetheart deal’? The private citizen has a few options, but what options are the Shadow Cabinet studying at the moment?
Esteemed Minister, the planned reactor will require 800 tons of fuel to start off, and about 400 tons per year to generate the 2GW required. At current prices, of around USD$42 per pound of uranium, this works out to USD$ 1,185,172,800 for initial start off and USD$ 592,586,400 per year of operation, raw fuel costs alone, in today’s Dollar.
With China stockpiling half its purchase of 5000 tons this year, and the two juggernauts expected to import 28,000 tons per year by 2020, the price we will actually pay is estimated to be closer to USD$250 per pound in today’s Dollars by the time the reactor is operational.
Esteemed Minister, how are we going to hedge against this six-fold increase in raw fuel costs alone, costs which will be borne by future tax payers and bill payers? Action today can save taxpayers and billpayers nearly RM 30 billion the first year, and up to RM 115 billion over the first ten years of operations, in today’s Ringgit. Again, while the private citizen has options to capitalize on these trends, what plans does the Shadow Cabinet have on the shelf?
RM 115 Billion buys many, many, many scholarships.
Esteemed Minister, let us look at natural gas, a commodity which is subsidised to “deserving” entities, excluding private citizens, to the tune of RM 18.9 Billion per year (2009). We are to become net importers in 5 years, according to some upstart analysts from an island nation nearby.
Natural gas has an historical price ratio of around 6 to oil, but is now trading at nearly 15, or two and a half times cheaper than its average price vis a vis oil. In what ways does the Shadow Cabinet feel we can secure our future needs in Natural Gas at favourable prices? Again, even though I repeat myself, private citizens and corporations can capitalize on this, but how is the Esteemed Minister planning to save the tax payers Ringgit tomorrow?
It is easy to look at past numbers and put the blame on the incumbent government, the consequences for which they will face at the hands of the voters. It is not as easy to start planning for the future using existing data, and to pre empt as much pain as possible to the people that are waiting to vote you in power, my Esteemed Phantom Minister for Energy. I do hope that the day will come, when the Shadow Policy Papers produced by the Shadow Cabinet, will show the voters that the stewardship this country lacks is but waiting in the wings.
In the meantime, do not blame the smart money for leaving the country, FDI outflow is as much a result of past and current policies, as a lack of belief in future ones.
