The argument against nuclear energy scored a huge point last week when Toshiba Corp announced that it planned to write off US$6.3 billion and withdraw from the business of building nuclear power plants as a result of a disastrous decision to acquire Westinghouse Electric Co a decade ago.

The Japanese company said its chairman, Shigenori Shiga, would resign after its executives faced intense scrutiny because of the financial mess and years of flawed business decisions, The New York Times reported.

Westinghouse faces spiralling cost overruns at nuclear plant projects in the US, the newspaper said.

Toshiba’s dilemma was captured in a Fortune report entitled “The Real Problem with Nuclear Power”, which noted that concerns about nuclear power have largely centred on the safety issues associated with a potential nuclear meltdown and the risks of having to store toxic waste.

Both of those issues have contributed to a declining interest in nuclear power, it said, but Toshiba’s troubles underscore the real challenge to the energy source: it is really expensive.

Today, the biggest downside to building new nuclear power plants in many developed countries is sheer cost, Fortune said. Data from the US Energy Information Administration shows that building a new plant costs more than US$5,000 per kilowatt of capacity compared with around US$2,100 for the primary type of solar power plants and less than US$1,000 for the most common type of natural gas plant, although these figures vary by region.

Unfortunately, this cost factor is not always openly stated by proponents of the nuclear energy industry.

The US Institute for Energy Research, for one, helps to correct this information gap. In a 2012 analysis, it stated that the costs of electricity generation can be quite low once the capital and finance costs are paid, usually after 20 to 30 years.

Commenting on the Nuclear Energy Institute’s comparison of the production costs for nuclear, coal, natural gas and petroleum generating units, it explains why the website could claim that on average, in 2011, nuclear power had the lowest electricity production costs at 2.10 US cents per kilowatt hour, and petrol-eum had the highest at 21.56 US cents per kilowatt hour.

However, the Institute for Energy Research states that levelised costs, which represent the total costs of constructing new power plants including their capital and financing charges, present a more accurate picture of the true costs of power generation. A new nuclear power plant, for example, has one of the highest levelised costs, especially when compared to coal and natural gas-fired plants, according to the US Energy Information Administration.

The cost factor ought to be an issue of deep concern for Malaysia’s nuclear energy ambitions, which seem to be on a slow but steady course towards fruition.

Last October, Minister in the Prime Minister’s Department Datuk Nancy Shukri confirmed that the Malaysian Nuclear Agency, which she oversees, was making the technical preparations for undertaking a nuclear energy project around 2030, should it be seen as necessary, and if public acceptance could be gained.

In comparison, last November, Vietnam took the historic decision of scrapping its nuclear energy programme after decades of preparation, including a ground-breaking ceremony in 2014 at the country’s first proposed nuclear plant.

Explaining the government’s decision, the CEO of the state-run electricity corporation reportedly said nuclear power was not viable because cheaper sources of power were available.

According to the VN Express newspaper, Japanese and Russian consultants said the cost for two planned facilities had escalated from the original estimate of US$10 billion to US$27 billion. The plants would have to sell power at almost twice the rate approved in the project licence and was not competitive at all, it said.

Another pertinent factor was Vietnam’s rising public debt, which was nearing the government’s ceiling of 65% of GDP, a legislator and former governor of the central bank was reported to have said.

Ironically, in 2015, the International Energy Agency forecast that nuclear power would account for just 1% of electricity generation in the region by 2040.

“All countries in Southeast Asia that are interested in deploying nuclear power face significant challenges. These include sourcing the necessary capital on favourable terms, creation of legal and regulatory frameworks, compliance with international norms 

and regulations, sourcing and training of skilled technical staff and regulators, and ensuring public support,” the agency said in a report.

“The limited role for nuclear can be explained by the high upfront capital costs, limited access to finan-cing, and uneven and tepid public support in the wake of the Fukushima Daiichi nuclear accident. Public opposition has been especially evident in Indonesia, Malaysia, the Philippines and Thailand,” the report said.

The obstacles facing the nuclear power industry in the region do not seem to dampen the enthusiasm of its promoters including Rosatom, the Russian nu-clear energy agency, and China General Nuclear Power Corp, which set up its Southeast Asian headquarters in Malaysia last April with a bullish announcement.

Last June, Thailand’s The Nation quoted a senior Rosatom executive as saying that the agency has cooperation agreements with seven countries in the region, including Malaysia.

Rosatom’s director of international business Nikolay Drozdov told the newspaper that after the (stalled) nuclear power project in Vietnam, Indonesia and Malaysia would likely be the next countries in the region to develop nuclear power.

Interestingly, Geopolitical Monitor, a Canada-based intelligence publication, noted last May: “In the last decade, slowly but steadily, Russia has moved towards building a vast nuclear empire spanning South and North America, Europe, the Middle East, Africa, India, South Korea, Vietnam, China, Malaysia and Indonesia.”

It is noteworthy that the 8th annual Nuclear Power Asia conference will be held in Kuala Lumpur on March 7 and 8, co-hosted by the Malaysia Nuclear Power Corp.

In the light of external challenges to Malaysia’s economy, as reflected in the 2017 Budget, in which prudent spending is a key theme, it will be interesting to see how the country’s nuclear ambitions are moderated by the need to rein in its troublesome deficit.

Vietnam’s recent experience in this regard may hold important lessons.

R B Bhattacharjee is associate editor at The Edge Malaysia

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.