Nuclear energy: Facts and figures
to consider

Dr. Habib Siddiqui

According to a published news report, the Government of Bangladesh is aggressively targeting to set up at least a 1000MW nuclear power plant in the country within a decade. The official sources say that currently the Government has received three preliminary proposals from Russia, China and South Korea.
   The news should come as no surprise given the Government's promise and commitment to mitigate the appalling energy shortage in the country. With all the added emphasis on limiting harmful greenhouse effects, it is safe to assume that nuclear energy remains a viable option to meeting Bangladesh's growing energy needs. It has no "carbon footing" and does not cause climate change. On the other hand, its disadvantages involve the unsafe nature of the process and the exhaustibility of its fuel, e.g., uranium for thermal fission reactors and plutonium for breeder reactors (note: the latter material can be used directly to making "dirty" bombs, while the former requires sophisticated concentration before it can be used in a weapon).
   
   Basic ingredient
   As Bangladesh explores her nuclear option, it is important that we have a good understanding of this technology. The processes used in nuclear power industry start with mining. The basic ingredient is uranium which has the advantage of being an enormous source of energy, and it is easily and cheaply transportable. It exists in nature in three isotopes: U-238 (99.284%), U-235 (0.711%) and U-234 (0.005%). The uranium content is referred to as triuranium octaoxide, U3O8., which is the most common (and stable) form found in nature. Uranium dioxide, UO2, is the form in which uranium is most commonly used as a nuclear reactor fuel. At ambient temperatures, UO2 will gradually convert to U3O8.
   Currently, the fuel price of U3O8 is around $50/lb. It is highly likely that the price would reach $100/lb with growing demands, which would inevitably trigger more exploration of mines and their profitable recovery. Experts estimate that the global reserve is around 4-5 million tons. At current global consumption of approximately 77,000 tons/year, this reserve will last only for 65 years. This reserves-to-production (R/P) ratio of 65 is well below coal and only 50% more than oil or natural gas.
   
   7.5% of global energy
   Today, nuclear energy supplies only 7.5% of the total global energy consumption, corresponding to 17% of the global electricity consumption. With growing concerns on carbon emission, it is safe to assume that this percentage will grow in coming decades. Unlike fossil fuel based energy options, the nuclear industry is only 55 years old with the first plant built in 1954 in the USSR. Since then, some 575 nuclear power plants have been built around the globe, including 125 in the USA. As of 2008, the installed capacity of all the running plants in the world is 413 GW of which 119 GW is in the USA.
   The actual electric production, however, is only about 300 GW (and approx. 100 GW in the USA) giving an asset utilization of 73% globally (and 84% for the USA). Of all those plants built since 1954, 439 are still operating, 119 have been shut down. However, since decommissioning of nuclear plants is a highly complicated and expensive process, only 17 (of those 119) plants have really been decommissioned. According to an industry expert, Bela Liptak, three nuclear plants were started in 2007, and currently another 35 are under construction (The Future of Nuclear Energy, Control Magazine, March 2009).
   
   TMI-2 nuclear accident
   In the USA, in the post-Three Mile Island (TMI-2) nuclear accident (1979) period, because of mounting concerns on safety of operation, risk to living beings plus hazards related to safe disposal of nuclear waste, all applications to build nuclear plants were turned down. Of the already built plants, 13 have been permanently shut down, and 10 have completed their decommissioning. Even after all these years, most Americans don't favor having a nuclear plant built in their neighborhoods.
   The total investment to build an average power nuclear plant is estimated to be over $4 billion. (The typical life of a nuclear power plant is 30 to 60 years.) In spite of such high capital costs (and the need to internalize all waste disposal and decommissioning costs), nuclear energy is, in many places, competitive with fossil fuel for electricity generation. If the social, health and environmental costs of fossil fuels are also taken into account, nuclear is outstanding. In this regard, the 2001 report of a major European study of the external costs of various fuel cycles, focusing on coal and nuclear, ExternE, is quite revealing. It shows that in clear cash terms nuclear energy incurs about one tenth of the costs of coal. The external costs are defined as those actually incurred in relation to health and the environment and quantifiable but not built into the cost of the electricity.
   If these costs were in fact included, the EU price of electricity from coal would double and that from gas would increase 30%. These are without attempting to include global warming. Nuclear energy averages 0.4 euro cents/kWh, much the same as hydro, coal is over 4.0 cents (4.1-7.3), gas ranges 1.3-2.3 cents and only wind shows up better than nuclear, at 0.1-0.2 cents/kWh average.  (Note: these are the external costs only.)
   
   Fuel cost
   As to the overall breakdown of fuel cost, it is worth noting that uranium has to be processed, enriched and fabricated into fuel elements, and about half of the cost is due to enrichment and fabrication. A January 2007 analysis shows that to make 1 kg of Uranium as UO2 reactor fuel, the cost of 8.9 kg of U3O8 is (USD) $472 (@ $53/kg), the conversion cost for processing 7.5 kg of U (@ $12/kg) is $90, the enrichment cost is $985 and fabrication cost is $240. That is, the total cost for 1 kg of Uranium as UO2 reactor fuel is $ 1787. At 360,000 kWh of electrical power per kg, this translates into 0.50 cents/kWh. Now if we assume a 100% increase in U3O8 price, while other costs (processing, enrichment, fabrication) remain the same, the total cost will be $2286, i.e., only a 28% increase in overall price to 0.635 cents/kWh. Even when the costs for radioactive spent fuel and the ultimate disposal of this spent fuel or the wastes separated from it are factored in, the total fuel costs of a nuclear power plant in the OECD are typically about a third of those for a coal-fired plant and between a quarter and a fifth of those for a gas combined-cycle plant.
   Fuel costs are one area of steadily increasing efficiency and cost reduction programs. For instance, in Spain nuclear electricity cost was reduced by 29% over 1995-2001. This involved boosting enrichment levels and burn-up to achieve 40% fuel cost reduction. Prospectively, a further 8% increase in burn-up will give another 5% reduction in fuel cost.
   For nuclear power plants any cost figure normally includes spent fuel management, plant decommissioning and final waste disposal. Decommissioning costs are about 9-15% of the initial capital cost of a nuclear power plant. The back-end of the fuel cycle, including used fuel storage or disposal in a waste repository, contributes up to another 10% to the overall costs per kWh, - less if there is direct disposal of used fuel rather than reprocessing.
   The US cost figures for 2007 published by the Energy Utility Cost Group showed nuclear utility generating costs averaging 2.866 c/kWh, comprising 1.832 c/kWh for operation and maintenance, 0.449 c/kWh for fuel and 0.585 c/kWh for capital expenditure. An EU 2007 study, on the other hand, compared electricity cost (US cents/kWh): 5.4-7.4 for nuclear, 4.7-6.1 for coal, 4.6-6.1 for gas, 4.7-14.8 for wind in-shore, and 8.2-20.2 for wind off-shore. In January 2009, CEZ published cost for new nuclear plants at 6 euro cents/kWh (comprising of 3.8 cents for capital, 1.0 for fixed cost and 1.2 for fuel cost). Nuclear power is very capital-intensive, while fuel costs are relatively much more significant for systems based on fossil fuels.
   Any capital cost figure from a nuclear reactor vendor, or which is general and not site-specific, will usually just be for EPC (engineering, procurement and construction) costs.  This is because owner's costs will vary depending on whether a plant is new or at an established site, perhaps replacing an old plant.
   Long construction periods will push up financing costs, and in the past they have done so dramatically. It used to take eight to ten years to set up a 600-1000 MW power plant in most countries, as it required fulfilling many conditions for a safe and regulated nuclear plant. In Asia construction times have tended to be shorter. For instance, the new-generation 1300 MWe Japanese reactors which began operating in 1996 and 1997 were built in a little over four years, and 48 to 54 months is typical projection for plants today.
   As hinted earlier, in terms of energy generation, one kg of natural uranium is equivalent to 20,000 kg of coal. The fuel's contribution to the overall cost of the electricity produced is relatively small, so even a large fuel price escalation will have relatively little effect. For instance, typically a doubling of the uranium market price would increase the fuel cost for a light water reactor by 28% and the electricity cost about 7%, whereas doubling the gas price would typically add 70% to the price of electricity from that source.
   (This fact is especially important for countries like Bangladesh in coming years with ever declining supply of oil and gas.) There are other possible savings from nuclear fuel. For example, if spent fuel is reprocessed and the recovered plutonium and uranium is used in mixed oxide (MOX) fuel, more energy can be extracted. The costs of achieving this are large, but are offset by MOX fuel not needing enrichment and particularly by the smaller amount of high-level wastes produced at the end.
   The safety record of mining, enrichment and fuel fabrication is fairly good. While nuclear fuel preparation is relatively safe, it is not accident-free. Most nuclear accidents occur in the nuclear reactors themselves. The majority of these accidents are caused by design or operator errors involving either the coolant controls or the fuel rod. Radiation leaks can also occur because of earthquakes, poor waste storage practices, ageing or terrorist attacks. The most important goal is to maintain standard operation of the reactor cooling system. Run-away reactions can evolve too quickly, while plant shut down is slow and complicated. Thus, having backup controls and equipment is more important than in other industrial operations.
   As Bangladesh evaluates vendor information on nuclear power plants, it is important that her decision makers are fully cognizant of this technology so that the best possible deal can be sealed that protects the interest of our people.
   About the author: Dr. Siddiqui studied the counter-current flow limitation phenomena during a loss-of-coolant-accident in a nuclear power plant as part of his graduate research work in nuclear engineering in the early 1980s in the University of California. He can be reached at saeva@aol.com.

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Md. Mostaque Hassan

The Postal Act of 1898 is a century old law. ICT and technological revolution have taken place in the postal services of the developed countries but in this respect Bangladesh still lags behind. In Post Office Act 1898, there was no provision for operating Courier Service in this country. Air Express Service of Biman was closed down on 30 October, 1983. Following the procedures of the cargo regulation of Air Express Service, some Courier Services started similar types of operations like Air Express Service of Biman. Due to increasing demand, gradually this service is being expanded to all urban areas including some Upazilas of Bangladesh. Considering the increasing demand of the Courier Service and persuasion of the Courier Service Association of Bangladesh (CSAB), NBR gave them a SO-28 Code through issuing a SRO-17 in 2000 to operate this business. In 2004, another SRO (SRO # 173) was issued fixing 15% VAT on its services. In 2007 another SRO (SRO # 130) was also issued and enlisted Currier Services as a 'service provider' and reduced VAT rate of its income from 15% to 4.5%.
   Presently, Courier Service Providers have been delivering a number of services in Bangladesh in different categories like dispatching general/ valuable documents, delivering special services, remittance collection, parcel booking, and tie up with international courier services for handling documents to and from overseas countries and so on. The couriers offer services mainly in urban areas as urban areas are potential for courier business.
   
   Legal coverage
   Most of the couriers do not have rural coverage as number of customers is very few. In some special cases, some big courier service providers deliver documents in rural areas but charge higher fees for those transmissions. Couriers do not operate business where they do not profit; because; they have to maintain office, pay staff salary and above all make profit as they invest money and time in this profession.
   The Courier Service Association of Bangladesh (CSAB) and the customers have been demanding to the Government to bring this sector under legal framework. It will help Government to look after the affairs of couriers, monitor the quality of services, ensure transparency and accountability of its operation, fixing appropriate fees and so on.
   
   Nationwide service
   The Post Office Act 1898 is the legal basis for the Postal Department to deliver postal services in Bangladesh. The Postal Department has the nationwide service coverage. It is a very cheap and affordable for all classes of people of the country. The services of the post office are slow and of primitive nature; which do not satisfy a progressive society. The world has been changing rapidly and expectations of the stakeholders have also increased for getting quick service delivery. But the postal services are lagging behind in this respect.
   Courier service providers deliver documents as per desire of the customers with a quick and efficient delivery; which makes the sector trustworthy to the stakeholders. That is why; number of courier service providers has increased over the last few decades due to increasing demand of this service.
   More than 100 courier service providers have been doing their business in this sector employing a huge number of people. At the same time, this sector has been facing a number of barriers and obstacles in operating their business as it lacks legal coverage. The Government has no regulatory authority to monitor this sector, their services are not legally approved, and they do not have access to government facilities, and have no insurance coverage of goods and documents against damage and so on. So, they are sufferers. So, the Government should come up with positive actions for its promotion and expansion.
   Established business sectors, private sectors, bank, financial institution, corporate bodies etc. are the beneficiaries of the courier service. It charges higher fees compared to post office in carrying and delivering documents. On the other hand, government postal service is low-cost and convenient for the poor. So, the poor customers are still having trust on post office.
   Customers have positive feelings about couriers as they are satisfied with quick and efficient service delivery. Customers feel that courier services are to be regulated by the Government; otherwise citizens might be cheated.
   
   Remittance transfer
   Foreign transmissions and remittances are mostly undertaken by the international couriers in collaboration with domestic couriers. As per views of the customers, remittance transfer through couriers is efficient and trust worthy. Beneficiaries stated that, government post office has limited scope to employ people. On the other hand, Courier Services have wide scope to employ people.
   
   Risk analysis
   Post Office Act 1898 doesn't allow handling and delivery of any injurious, indecent and contraband items. Post office has the delegated power to intercept any postal articles suspecting contents of any parcel. As a result, post office can ensure that no contraband item is transmitted by the department.
   On the other hand, the Post Office officials opined that Courier services sometimes carried such suspicious and contraband items. There is no well specified system for courier services to check documents/articles before transmission. Courier service providers mentioned that now they check articles after a series bomb blasts in 61 districts in 2005. The CSAB demanded to the Government to formulate rules to bring them under legal structure and declare it as a service industry. They added that post offices don't have scanners to check injurious or explosive materials. The CSAB demanded that if they have access to finance, access to free import of scanners/equipment/vehicle; they would able to check and identify contraband and explosive items and further improve their service delivery.
   
   Upgrading postal services
   The Postal Department should be upgraded through introducing modern technology, application software, standardised service quality, rationalised custom formalities and ensures track and tracing to expedite international postal services.
   It should introduce electronic remittance services side by side with international money order services, developing private-public partnership and controlling money laundering for better development of international remittance services and increasing foreign exchange reserve for macro-economic stability.
   The Postal Department should introduce computer-based banking services and credit card facilities for postal banking services. It should introduce E-Money Order and mobile phone-based money order services for domestic money order services.
   Computer-based service package for Postal Life Insurance Services and rationalising postal life insurance policies should be introduced.
   Complexities in the administrative process should be rationalised and downsised encouraging policy autonomy for developing new services, customer care, private-public partnership and solving social problems.
   
   Recommendations
   Before formulating rules the authority should share views and ideas with Post Office, Government sectors and the Courier Service Association of Bangladesh, DHL, Federal Express, FBCCI, DCCI, MCCI and some business associations and their suggestions would be reflected in the rules to be formulated for courier service.
   Courier service providers employ more than 1,00,000 people and pay a huge amount of money to the Government exchequer as VAT/Tax. So the Government has to come up with positive approach for promoting this sector to obtain more revenue to the public exchequer.
   Usually courier services charge higher fees than that of the Post Office. That is why the demand for ordinary postal services has not reduced. In the interest of Post Office, lower fees for courier service can be introduced. But fixing maximum fees under the proposed rules might put courier service in a difficult situation to run their business. Because; fees are to be charged depending on price, importance of document and how frequently documents are to be delivered and so on.
   To promote courier service; access to finance, tax-free import of scanners/vehicle/equipments and other facilities are to be given to this sector so that courier service providers can scan documents and identify explosive and contraband articles.
   Courier service should be reformed in such a way that it can undertake financial and remittance related activities; so that money laundering activities can be reduced and Government would get more revenues.
   The CSAB feels that a licensing authority is essential for courier service but that must not be the Post Office because Post Office is also delivering the similar type of services like the CSAB members. The regulatory and licensing authority of the courier service should be the BTRC or a similar type of organisation or the Ministry of Post and Telecommunication.
   Express Indian Council of India (Indian courier service) is not under Indian Postal Department but under an independent authority. Bangladesh can adopt this instance and form an independent regulatory body to regulate courier services.
   However, before regulatory changes are undertaken a comprehensive Regulatory Impact Assessment (RIA) including examination of options based on overview of the practices in the similarly situated countries of the world must be undertaken in a transparent and participatory manner involving all the major stakeholders.
   (Concluded)

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