NATIONAL & REGIONAL ECONOMIC & SOCIAL IMPACT ASSESSMENT OF NUCLEAR POWER PROJECTS IN MALAYSIA by Jamal Khaer Ibrahim, Director, Nuclear Power Programme Development, Malaysia Nuclear Power Corporation (MNPC), Prime Minister s Department & Dr. Mohd Yusof Saari Faculty of Economics & Management, Universiti Putra Malaysia (UPM) IAEA Technical Meeting on Topical Issues in the Development of Nuclear Power Infrastructure 3-6 February 2015 Vienna, Austria 1
2 DEPLOYING NUCLEAR ENERGY FOR POWER GENERATION IN THE NATIONAL ECONOMIC TRANSFORMATION PROGRAMME RATIONALE FOR CONDUCTING NATIONAL & REGIONAL ECONOMIC & SOCIAL IMPACT ASSESSMENT OBJECTIVES, METHODOLOGY, APPROACH & EXPECTED OUTPUT OF NATIONAL & REGIONAL ECONOMIC & SOCIAL IMPACT ASSESSMENT 2
3 INTRODUCTION TO MALAYSIA PENINSULAR MALAYSIA 40% of land area; 80% of population; 90% of electricity demand. STATES OF SABAH & SARAWAK ON BORNEO ISLAND 60% of land area; 20% of population; 10% of electricity demand. MALAYSIA Land Area: 329,733 sq. km. Population: 29.3 million (2012) NUCLEAR POWER GENERATION CONSIDERED ONLY FOR THE PENINSULA 3
4 MALAYSIA AIMING TO BE A HIGH-INCOME ECONOMY BY 2020 RM billion 1,400 1,300 1,200 1,100 1,000 900 800 Real GDP in constant 2000 prices GDP in 2020 at sustained 5.4% growth rate as in 1990 to 2010: RM 869 billion GDP growth in 2011-2020 = 5.4% p.a. High-Income Economy Minimum GDP growth 5.0% p.a. (2011-2020) Minimum GDP for High-Income Economy: RM 840 billion Vision 2020 Target Path RM 1,388 billion in 2020 New Economic Model (NEM) GDP growth target 6.5% p.a. (2011-2020) USD17,500 USD15,329 USD14,818 700 600 500 400 300 200 100 5.4% p.a. actual growth (1990-2010) Real GDP Growth 2011 = 5.1% 2012 = 5.6% 2013 = 4.7% 2014 = 5.5 to 6.0% est. 2015 = 4.5 to 5.5% (revised from 5 to 6%) 0 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 4
5 ECONOMIC TRANSFORMATION PROGRAMME (ETP) 2011-2020 AS ONE OF FOUR PILLARS OF THE NEW ECONOMIC MODEL Tourism Wholesale & Retail Electronics & Electrical (EE) Education Healthcare Palm Oil Communications Content & Infrastructure 12 National Key Economic Areas (NKEA s) 131 Entry Point Projects (EPP s) & 60 Business Opportunities EPP No.11 under OGE NKEA on Deploying Nuclear Energy for Power Generation Source: Malaysia s National Key Economic Areas (NKEA) Laboratory 2010 Oil, Gas & Energy (OGE) including nuclear power Gross National Income (GNI) USD 15,000 per cap. in 2020 2009 = RM 661 billion 2020 = RM 1,733 billion (USD 523 billion) Total Investment Required in 2011-2020: RM 1,419 billion (USD 444 billion at 2010 value) 92% Private & 8% Public Investment 73% Domestic & 27% Foreign Direct Investment 3.3 million additional jobs by 2020 Greater Kuala Lumpur & Klang Valley Agriculture Financial Services Business Services 5
6 ORIGINAL ETP EVALUATION OF GNI IMPACT OF DEPLOYING NUCLEAR ENERGY FOR POWER GENERATION Unit 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Overall GNI contribution Overall investment USD million USD million 1.0 2.1 5.0 7.3 29.1 58.8 73.4 84.7 83.4 71.3 66.4 482.5 7 7 7 7 92 182 576 978 1,447 1,774 1,575 6,652 % Private investment Percent 77 49 57 67 96 98 100 100 100 100 100 Employment (total) FTE 40 200 200 320 1,251 2,697 3,457 3,957 3,757 3,007 2,637 Administrative/ Managerial FTE 1 3 3 4 20 34 37 38 38 36 33 Professional & Technical FTE 37 123 123 172 552 897 881 894 888 868 902 Clerical & Salaried FTE Service workers FTE Production workers, laborers, transport equipment operators FTE 2 74 74 144 679 1,766 2,539 3,025 2,831 2,103 1,702 ASSUMPTIONS Original target date for commissioning first twin-unit nuclear power plant in 2021 & 2022. Single turnkey contract with 85/15 to 80/20 of debt-equity ratio. 100% of 85%-debt in foreign export credit and 18-year repayment. 51% equity by electric utility with 49% foreign partner. Est. USD 8 billion overnight cost for twin unit (2x1,000 Mwe) nuclear power plant; Sovereign guaranteed foreign export credit. Source: Malaysia s National Key Economic Areas (NKEA) Laboratory 2010 6
7 STATUS OF FOUR ENABLERS SPECIFIED IN ETP FOR DEPLOYING NUCLEAR ENERGY FOR POWER GENERATION PUBLIC ACCEPTANCE Current comprehensive national public opinion research; Public fora & consultation based on regulations & guidelines; Formulation of a 10-Year Comprehensive Communications Plan & Strategies on Nuclear Energy. INTERNATIONAL GOVERNANCE New comprehensive nuclear law drafted & includes provisions based on relevant international instruments that will facilitate signing & ratification or accession to international instruments upon enactment of the new law. REGULATORY CONTEXT New comprehensive nuclear law & set of subsidiary regulations, guidelines & regulatory guide drafted & reviewed by IAEA; New Atomic Energy Regulatory Commission to be established upon enactment of the new comprehensive nuclear law. SITE ACQUISITION Site evaluation to be carried out after Government consent to proceed is obtained, based on results of comprehensive national public opinion & consultation on nuclear energy.
8 RATIONALE FOR NATIONAL & REGIONAL ECONOMIC & SOCIAL IMPACT ASSESSMENT Lack of empirical evidences for economy-wide impacts of nuclear power projects on economic & social indicators. Need to assess to what extent nuclear power projects would benefit the economy & societal welfare. Need for detailed analysis at regional levels for a clear quantification of whether economic & social benefits from nuclear power projects would be distributed equitably across regions or States.
9 OBJECTIVES & METHODOLOGY OBJECTIVES: To measure the impacts of nuclear power projects on the economy & society: Economics indicators: Gross Domestic Product (GDP), Balance of Trade and Government revenue; and, Social indicators: household income, job creation & income inequality; To evaluate the differences between our model with the IAEA model. METHODOLOGY: To develop a social accounting matrix (SAM) as the main database; To estimate the structure & size of nuclear energy production & its interlinkages with other economic sectors, especially the ETP NKEA s; To study the relative contribution of nuclear energy production towards economic & social indicators compared to coal-based electricity generation; To study differences between results obtained from our model and that of the IAEA; and, To estimate the regional SAM for regional impact assessment.
10 APPROACH Data Collection & Harmonisation Collecting, compiling & harmonising economic & social statistics from various sources of primary & secondary data at national & regional levels; Data gap analysis & estimation of missing data using appropriate techniques; Collecting & compiling data on detailed input & output structures of nuclear energy production from benchmarked countries & from local energy producers. Estimation of Social Accounting Matrix & Analysis Assembling all required data in a social accounting matrix framework; Balancing the unbalanced social accounting matrix using RAS technique; Constructing another social accounting matrix that embodies a nuclear power sector; Analysing results from modelling assessment to verify the relative contribution of nuclear power production to economic & social indicators; Comparing the results obtained from our model with the IAEA model, using similar data set.
11 APPROACH Estimation of Regional Social Accounting Matrix & Analysis Estimating regional input-output table in Malaysia using hybrid technique (combination of survey & non-survey data); Extending the estimated input-output table to account for primary and secondary income in a SAM matrix; Balancing the unbalanced regional SAM using RAS technique; Detailing economic & social impacts at national level across various regions.
12 EXPECTED OUTPUT Social accounting matrix with nuclear energy sector for 2010 base-year; Regional social accounting matrix for 2010 base-year; Results & analyses drawn from the modelling assessment, including impact assessments on the economic indicators (GDP, balance of trade and government revenues) & social indicators (household income, job creation and income distribution) at national & regional levels; Results that validate the IAEA model; and, Update & refinement of the ETP evaluation of the GNI impact of deploying nuclear energy for power generation.
THANK YOU Jamal Khaer Ibrahim, Director, Nuclear Power Programme Development, Malaysia Nuclear Power Corporation (MNPC), A-1-01 & A-1-03, SME Technopreneur Centre 2, 2260 Jalan Usahawan 1, 63000 Cyberjaya, Selangor Darul Ehsan, Malaysia Tel: ++60-(0)3-8319 4700 Fax: ++60-(0)3-8319 4800 Email: jamal@mnpc.org.my 13