Nuclear Energy for Sri Lanka’s Decarbonized Future
A Sustainable Alternative to Liquefied Natural Gas Dependence
“Energy is part of a historic process, a substitute for the labor of human beings. As human aspirations develop, so does the demand for and use of energy grow and develop.” - David Lilienthal, Atomic Energy: A New Start, 1980
Sri Lanka is evaluating whether to incorporate nuclear energy to her electricity mix. I researched the demands on Sri Lanka’s electricity system; the relationship between energy consumption and prosperity; the provision of reliable, affordable, sustainable, and safe electricity. My policy brief, exploring options and barriers for nuclear energy deployment was published on the Brandeis' Center for Global Development and Sustainability. I conclude as the country explores options on-demand energy sources to complement solar and wind generation, limited financial and human resources should prioritize nuclear over liquefied natural gas (LNG), an expensive and price volatile fossil fuel with questionable climate benefits over coal.?
A few insights are shared here, in the hopes of advancing the conversation about the tradeoffs in energy policy choices. Would love to hear your thoughts.
The Energy Ladder
Access to modern energy (for electricity, cooking, transportation) is necessary for sustainable development. The UN Sustainable Development Goal 7 calls for “affordable, reliable, sustainable, and modern energy for all” by 2030. Studies have shown a positive and significant causal link from energy use to economic growth. After concerted efforts in rural electrification, Sri Lanka celebrated universal electric access in 2016, expanding the associated socio-economic benefits to all her citizens.
Until the mid-1990s, Sri Lanka had largely low-carbon grid, underpinned by hydropower. The country relied on the combustion of expensive oil products to expand electricity generation in the 2000s, and added coal to the mix in 2011. All fossil fuels are imported into the country. In 2022, hydro provided 42% of electric supply, and non-fossil sources totalled 52%. About 18% of Sri Lanka’s electricity generation was intermittent – subject to daily or seasonal weather conditions (9% mini-hydro, 5% wind, 3% rooftop solar, 1% grid solar). Firm resources, those able to provide power on-demand regardless of the time of day or weather, made up the rest (34% major hydro, 32% coal, 15% oil, 1% other renewable).
The above chart demonstrates how the compound annual growth rate (CAGR) of per-capita GDP corresponds to the CAGR of energy consumption from 1990 to 2020 for 18 of the largest emerging economies plus Sri Lanka. Especially at lower levels of consumption, modern energy is key to achieving many socio-economic goals. A World Bank study evaluating cross-country data of more than 60 low-income countries 1985-1999 found that in urban areas, linking households to electricity is the only key factor that reduced both infant mortality rate and under-5 mortality rate, and that this effect is large, significant, and independent of incomes (Markandya & Wilkinson, 2007). Expanding household electricity consumption is especially beneficial to women and girls, who are liberated from the drudgery of menial labour (Bryce, 2020). Further, higher levels of energy allow new income-generating activities: “productive use of energy” versus “consumptive use” (Brew-Hammond & Kemausuor, 2009). The Asian Development Bank (2023) found that a 1% increase in electricity demand in Sri Lanka will lead to a 0.63% increase in per-capita GDP. Grid operator Ceylon Electricity Board in its latest Long-Term Generation Expansion Plan (LTGEP) anticipates that demand growth to compound annually at the rate of 5.2% between 2023 and 2043, an acceleration from the annual growth rate of 4.4% during the previous 15 years.
While electric system reliability is paramount to moving up the technology value chain, severe fiscal mismanagement, exacerbated by pandemic-related shuttering of the tourism industry, drove Sri Lanka into an economic collapse and a humanitarian crisis in 2022 (IMF, 2023). As Sri Lanka is attempting to stabilize the economy with the support of the IMF, lifetime needs for foreign exchange is a key energy security consideration.
Climate Action and Nuclear Power
In 2021, Sri Lanka pledged to achieve carbon neutrality by 2050 (Ministry of Environment, 2021). All the scenarios evaluated in LTGPE have no coal fired plant additions, but the report highlights the need for firm generation sources.
The International Atomic Energy Agency (IAEA) determined in April 2022 that Sri Lanka has engaged the appropriate stakeholders to consider the introduction of nuclear power and has initiated studies to enable the government to make a future decision on the nuclear power program (IAEA, 2022). Many emerging economies are accelerating their plans to build nuclear power (Ahn et al., 2022). The below table summarizes the growing electricity needs in the emerging economies building nuclear power plants (Energy Institute, 2023) and a few key characteristics of these deployments. All projects initiated in the 2010s, are coming online in the 2020s. All countries are looking to expand local high-quality jobs and supply chains as the in-country expertise develops. Russian deployments handle the entire fuel cycle, from uranium supply to spent fuel (waste) disposal.
The Energy Trilemma
An electric system has to balance three main competing objectives: reliability, affordability, and sustainability, in a challenge known as the energy trilemma. As Sri Lanka embarks on prioritizing the climate objective (the sustainability dimension), it behooves the country to evaluate other jurisdictions that have actually achieved deep decarbonization while ensuring reliable and affordable energy.
Jurisdictions that invested heavily in solar and wind energy suffer from energy scarcity and high prices (Peters, 2022). Germany, the global industrial leader, is to invest over half a trillion Euros in energiewende “energy turnaround” between 2000 and 2025 (Düsseldorfer Instituts für Wettbewerbs?konomik, 2016). This program promotes solar, wind, and energy storage, while shutting down nuclear power, driven by fears (David-Wilp, 2022). The resultant high energy prices are a key driver of the country’s recent rapid deindustrialization (Wilkes & Randow, 2023), all while causing avoidable greenhouse gas emissions (Knopf et al., 2014; Partanen, 2021).
Reliable
Unlike most commodities, electricity is a service that requires absolute moment-to-moment continuity in power supply in-line with demand. In all electric grids, firm clean generation sources are necessary to ensure grid reliability. Fuel-based generators can operate for as long as the on-site fuel lasts. Fuel-less systems that harvest wind and solar are dependent on weather conditions to function. The quantum of storage required accelerates rapidly at higher penetration levels intermittent generation. Grid-scale storage beyond a few hours remains extremely expensive (Temple, 2018). Thus, intermittent resources require firm backup generation.
LTGEP shows a heavy dependence on methane gas (“natural gas”) combustion to realize the “70% renewables by 2030” mandate set by the government. With no developed domestic gas source, Sri Lanka would need major investments in LNG infrastructure for this option. LNG is a fossil fuel formed by chilling gas to -127 °C (-260 °F). Liquefaction reduces the volume by 600x, allowing the product to be shipped across oceans. At the receiving port, the liquid is converted back into a gas before piping to a power plant for combustion. The investment in gas-based power plants would be on top of the regasification, pipeline, and storage infrastructure. Liquefaction, storage at sea, and regasification all consume energy, known as parasitical load.
Affordable
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Plant-level costs of solar and wind have come down in the last two decades, and Sri Lanka should look to expand these resources, especially solar. However, jurisdictions that greatly expanded these intermittent resources have seen a disproportionate rise in grid-level costs of electricity (Sepulveda, n.d.), leading to increasing inequity in some jurisdictions like California (Perry et al., 2021). The ratepayer and taxpayer ultimately foot the bill on the electricity system, even when service is degraded through unfortunate policy choices (Angwin, 2020). Most technology-inclusive cost-optimized deep decarbonization models for the U.S. require a major expansion of nuclear energy (Clack et al., 2022; Kim, 2023; Larson et al., 2021; Stein et al., 2022; U.S. Dept of Energy, 2023).
While nuclear plants have higher upfront capital costs, their design life is 2-4x that of other generation sources. With minimal fuel needs, nuclear operating costs do not fluctuate with global fossil fuel prices. LNG prices in Asia have been tied to the price of oil imported into Japan.
Sustainable
In January 2022, the Public Utilities Commission of Sri Lanka issued the guidelines to achieve 70% electricity energy generation through renewable sources by 2030, to build no new coal plants, while reaching Carbon Neutrality in 2050.
Industrial energy systems’ land use footprint is proportional to habitat destruction and biodiversity loss. Nclear’s energy density is orders of magnitude higher than other low-carbon energy sources, leading to minimal life-cycle land productivity. Using a mere fraction of the space needed allows nuclear energy to liberate both humanity and nature (Katz, 2002).
Another sustainability factor is the material needed for energy generation. Extracting the necessary resources (as equipment or fuel) has ecosystem and human health impacts.
While electricity from gas combustion has half the carbon dioxide emissions of coal power (IPCC, 2014), the impact of methane leaks may negate much of the climate gains (Gordon et al., 2023; Howarth, 2019). Methane is a greenhouse gas with the global warming potential 34x that of CO2 on a 100-year time horizon and 86x that of CO2 over a 20-year horizon (IPCC, 2013). Beyond needing energy input, every step of the methane gas supply chain is susceptible to leakage.
Safe
Safety is a key consideration as well. Over six decades of operational data from tens of countries around the world have shown that nuclear energy is as safe as any renewable energy source, despite contrary claims by opponents like Byrne et al. (1988). While most casual observers can name the three largest nuclear accidents in its history, upon reflection we realize that only one of them caused human deaths.
Nuclear Power Options
A major challenge for a country like Sri Lanka is the size of the electric grid vs. the output of a large nuclear plant. CEB deemed that the grid would find it difficult to accommodate a nuclear plant larger than 600 MW (CEB, 2023a). The growing set of Small Modular Reactor (SMR) offerings may be more apt for Sri Lanka than the large reactors deployed in Bangladesh, Turkey, Egypt, and the UAE. SMRs incorporate features such as load following, extended refuelling intervals, applicability for other uses, and passive safety. SMRs hold the promise of converting nuclear plant deployments from large infrastructure projects to factory-manufactured products. This shift aims to significantly reduce project risks, shorten deployment timescales, and lower costs. These units can be deployed as one-off, or combined into sets, based on demand.
The options in the table above were selected on the potential to deploy in the 2030s, based on licensing, supply chain, financing, fuel type, and other factors identified in OECD NEA’s Small Modular Reactor Dashboard (2023b, 2023a).
Facing a deep economic crisis, Sri Lanka defaulted on all international sovereign bonds on May 2018, the first time in her history (IMF, 2023). While working through an IMF restructuring package, foreign financing availability and costs are limited. While this is a barrier for nuclear deployment, the same is true for funding LNG infrastructure.
Conclusion
The below table lays out the options for Sri Lanka’s electricity growth, and how each option fares along the energy trilemma. Energy is the “ability to do work.” Curbing affordable and reliable energy, such as banning new coal power plants, may retard Sri Lanka from climbing the energy ladder of progress. While sustainable, solar and wind are not reliable energy sources. Investing in LNG will be more expensive than coal, ties up precious hard currency, and has unclear environmental benefits.
Kenyan sustainable development leader Calestous Juma (2016) explored how developing countries can overtake developed ones by using platform technologies that enable step-changes in efficiency. Nuclear energy is such a technology, able to underwrite a prosperous and sustainable society. With a long timeframe to study, prepare, and deploy, the earliest the LTGEP expects nuclear energy in Sri Lanka is 2037. With concerted effort, Sri Lanka can meet or beat this timeframe to add nuclear energy to the mix. CEB’s mandate is energy security to benefit all of society, not chase short-term profitability. This outlook makes long-lived nuclear energy assets similar to CEB’s major hydro projects, which helped Sri Lanka achieve past socioeconomic goals.
Juma asserts that a primary function of leadership is to chart new paths for society. Sri Lanka’s present economic crisis presents both risks of stagnation and opportunities for inclusive growth. Decisions about energy, an essential economic input, need to be guided by ethical values that reflect the demand for inclusive innovation, better use of technical advice, a greater public understanding of science, and a proactive adjustment of social institutions.
Given the limited ability to fund major energy infrastructure projects, Sri Lanka needs to carefully consider how to build reliable and sustainable nuclear energy and avoid locking in expensive and unsustainable LNG. Sri Lanka should initiate a competitive bidding process, inviting many nuclear vendors and financiers and choose the best option for the country.?