Is nuclear powered electricity a sustainable option for Bangladesh? This is the first part of a two-part op-ed
On September 27, 2017 Bangladesh signed the United Nations’ nuclear disarmament treaty outlawing nuclear weapons. Meanwhile, Bangladesh signed an agreement in August 2017 to send spent nuclear fuel to Russia for its management. Apparently, the two agreements would earn the country confidence of other countries that it has no intention to enrich uranium through recycling the spent nuclear fuel to be produced from its power plant.
Recycling such spent fuel is one of the options some other countries use to develop nuclear weapons. But no doubt it is again an expensive way to earn the confidence. Having the facilities to recycle the spent nuclear fuel could help Bangladesh develop fuel fabrication facilities for its power plants and that could save significant amounts of money in foreign currency every year and could increase the level of energy security of the country.
The contract to send spent nuclear fuel to Russia also earned confidence of local critics of the nuclear power project as they had been opposing the project, arguing that management of nuclear waste was risky for a country like Bangladesh. The critics have other points including shortcomings in economic and infrastructural capabilities in developing a large-scale nuclear infrastructure like the Rooppur nuclear power plant.
It has become a big question whether a country like Bangladesh could afford a $13.21 billion project under 90% of Russia’s supplier’s credit with 1.75% interest plus LIBOR (London Interbank Offered Rate). As of an estimate prepared by the economic relations division under the finance ministry, Bangladesh would have to pay up to $8bn in interest against the Russian credit of $11.385bn for the main construction of the power plant.
The government has also started repayment of the $500m Russian credit invested in the preparatory works to facilitate the main construction of the power plant. It signed the $500m credit agreement in January 2013 and the $11.385bn credit agreement in July 2016.
The Bangladeshi government will repay the $11.385bn Russian credit with interest in 40 equal installments. and it gets 30 years with a 10-year grace period for the repayment. The country’s own investment in the power project alone would be $1.32bn over the project’s implementation period in two phases -- preparatory phase until 2017 and the construction phase until 2025 as the construction phase included provisional operation period of the two-unit power plant until final takeover scheduled for 2025.
Local experts fear that the Rooppur nuclear power project would cost much higher as they believe that the project implementation would be delayed significantly. The local experts’ concerns were echoed in the world nuclear industry’s status report published in September this year. All 53 under-construction nuclear reactors are behind schedule. The pressure of repayment might leave the future government no options but to slash budget allocation for more fundamental projects like health, education, and disaster management.
Finally, the price of electricity from the Rooppur nuclear power plant will be beyond the affordability of the power consumers. The officials related to the project, however, asserted on several occasions that the electricity price will be much less than that produced from coal-fire. Additionally, the government finds no problems in repayment of the credit as the country’s economy and the government’s financial capability would grow significantly in the next 10 years before the repayment of $11.385bn matures.
The debate in financing capacity and long-term impact of heavy debt on Bangladesh’s economy also included the potential rise in electricity price to be generated at the Rooppur nuclear power plant. Although the BAEC in 2015 estimated the price of nuclear power at Tk3 per unit or kilowatt-hours as Levelized Tariff, later it revised the price twice as its key officials said that the price would be Tk 5-5.30 per unit and then they hinted the price at Tk6-7 per unit.
They claimed that the nuclear power company would supply electricity at less than the price at which the companies would supply electricity from imported coal and/or LNG-fired power plants. The BAEC officials also said that the price of the $12.65bn general agreement and operation and maintenance cost to be spent over the plant’s 51-year economic life were considered.
The concluding part of this op-ed will be published on Tuesday.
Rokan Uddin is a senior correspondent at NTV. He can be reached at [email protected] This is an excerpt of a keynote paper presented at a seminar in a hotel in the Capital.