Power to the people: high-wire act of a plug-in society
Manila, Philippines — Not far from Manila, the giant dome of an unfinished atomic power plant rises above the rice paddies and mango trees. To poor villagers who will someday run their televisions on power from the nuclear reactor, the plant may be as unwelcome as the rumbling, steaming colcanoes on this island nation.
The reason: The plant's electricity will likely cost almost four times the world average for nuclear power.
The 620-megawatt Bataan nuclear plant, whose cost is expected to exceed $2.4 billion, ''will be the most expensive in the world'' when completed by 1985, says Robert Bakley of the Asian Development Bank (ADB).
How could such a poor nation get itself into such an expensive pickle over power?
It's easy, for a poor nation which equates modernization with electrification.
In more than half of Asian nations, less than 10 percent of the people have access to electricity. But of all areas of the world, Asia's electricity growth is the fastest. During the 1970s, a 9.9 percent rise in electricity generation outstripped the economic growth in developing Asian nations. It is projected to rise even higher in this decade - 11.3 percent, according to the ADB.
The Philippines, whose Bataan reactor has run into a host of safety, financing, and management woes, is hardly alone in its power problems, India's industry almost came to a halt in 1980 after a virtual collapse of its coal-fired electric utilities. In 1981, Thailand cut out 1.5 hours of prime-time television broadcasting when its power industry could not meet peak demand. Two years earlier, the government fell after it raised electricity prices.
The dawn of electrified societies has awakened the hope of progress in the region, but it has also brought greater problems.
''Many nations have taken on the American philosophy of focusing on big electricity production at the least cost,'' says Yoon Hyung Kim, head of a group assessing the future of electricity in Asia, sponsored by the East-West Center in Honolulu; the Massachusetts Institute of Technology; and Japan, Taiwan, and South Korea. ''Now they are confused about the future of electricity. The costs are just unknown - the environmental and financing costs.''
The more developed East Asian nations of Taiwan, Japan, and South Korea face a vulnerable future in electricity production. Large nuclear programs launched in the 1970s are jeopardized by a slowdown in the rate of growth for electricity demand. In South Korea, the rate of growth in demand fell from 18 percent in the last decade to a projected 10 percent in the 1980s. In Taiwan, growth in consumption of electricity is projected at 6.9 percent for the 1980s, compared with 13 percent during the '70s. For Japan, the 10 percent rate of growth in consumption during the 70s is expected to fall to 4 or 5 percent in this decade.
As a result, these three nations have 40 to 60 percent excess capacity of electricity, Dr. Kim says. This is expected to continue through the 1980s, posing a heavy financial burden and raising consumers' electric bills by as much as 50 percent.
If another recession hits, the electricity industries of these nations are in big trouble, Dr. Kim says. ''They are certainly learning from past mistakes. One lesson is that they are planning fewer and smaller plants, focusing on conservation and flexibility.''
Japan expects atomic reactors to contribute some 30 percent of its total electricity consumption by 1990, a jump from 13 percent today. The goal is to reduce oil dependency to below 50 percent of total energy use, according to Hiroshi Murata, vice-chairman of Japan Atomic Industrial Forum Inc. But to beat the cost of a coal-fired or natural-gas-fired plant, the reactors have to be operating more than 62 percent of the time. It was not until 1981 that Japan's nuclear plants achieved such efficiency. If technical or safety mishaps strike in the future, the country is vulnerable.
''One of the biggest concerns is that a safety problem in one reactor will force the shutting down of all reactors made by the same manufacturer, even those in other countries,'' Dr. Kim says.
South Korea, which projects that nearly 40 percent of its electricity will come from nuclear plants by 1990, has backed off from at least two new nuclear plants as growth in demand has slowed. Taiwan's current overcapacity, after two plants came on line in 1978 and '80, puts its financing portfolio ''in bad shape for the late 1980's,'' says Dr. Kim.
One measure of a nation's maturity in electricity usage is transmission loss. In the 1950's, for instance, South Korea lost 28 percent of its generated electricity, mainly to stealing and nonbilling. Today, the loss is only 6.6 percent.
Another sign of progress comes when a nation's peak demand is dominated by air conditioning. In Japan, that point was reached in 1968. In Taiwan, it was 1972. For South Korea, 1981. Use of air conditioning is rising rapidly in Asia, spurred by workers bringing air-cooling units home from the Mideast. Many nations are now searchng for ways to run air conditioners in offpeak hours, such as storing up energy in batteries or cooling large pools of water under office buildings.
For much of Asia, the power problem is an undersupply of electricity - and avoiding the mistakes made by electric utilities in neighbor nations with higher growth rates.
In almost all developing nations, use of electricity rises faster than that of any other energy form. It is not only the biggest producer of energy, but also the biggest consumer, using on average 30 percent of primary commercial energy resources, according to Dr. Kim. The electricity industry is usually a nation's biggest consumer of capital as well, eating up as much as 12 percent of available financial resources. And unlike gasoline consumption, it is the easiest part of the energy sector for a government to adjust in reducing oil use.
Up to the early '70s, real electricity costs actually fell. After oil prices rose, most Asian power companies lived off their financial surpluses from the previous good years. When oil prices shot up again in 1979, the situation got tough for politicians in poorer nations who preferred to subsidize electricity costs with tax revenues rather than pass on higher fuel prices to utility consumers.
''Generally, the people who vote are the ones who have electricity,'' says Mr. Bakley of the ADB. ''The politicians say that political stability is more important than running a financially sound power industry.
''The biggest fallacy is that electricity is free, as if it is like air. It isn't free, and the government should not distort the economy by raising taxes to subsidize electricity users. Electric utilities should make money for their countries.'' The ADB recently suspended loans to Indonesia, Sri Lanka, Burma, and Pakistan when they refused to raise electricity prices to reflect actual costs.
Many Asian utilities for the first time are studying the possible use of ''lifeline rates,'' which give lower rates to low-use customers by charging higher rates for heavy electricity use. The political temptation to give a price break to middle-use consumers, however, is too great for some politicians, Mr. Bakley says. The power company in Karachi, Pakistan, for instance, has reduced rates for those using less than 600 kilowatts - 10 times more than the ADB standard.