Introduction
Why ‘Small Modular Reactors (SMRs)’ are attracting attention as a decarbonized power source
There are three main factors behind the renewed interest in nuclear power among ASEAN countries.
Point 1: Increased demand for electricity due to the construction of data centres
When Western and domestic companies expand into South-East Asia, attracting data centres is a key priority. However, whilst ‘a stable supply of electricity’ is required, the current situation is such that sufficient power cannot be secured for energy-intensive operations.
Point 2: Forecast of a significant electricity shortfall by 2050
According to the International Energy Agency (IEA) scenario, an 453 billion kilowatt-hour electricity shortfall is projected across the ASEAN region. This means that, in order to achieve decarbonisation targets, it will be necessary to secure a reliable power supply whilst reducing reliance on conventional fossil fuels.
Point 3: Concerns over crude oil supply due to the deteriorating situation in the Middle East
Amid growing instability in the international situation, the importance of ‘diversifying energy sources’ is being recognized. Consequently, there is a growing re-evaluation of nuclear power generation.
Specific Nuclear Power Plant Roll-out Plans and Technical Comparisons by Country
ASEAN countries are each formulating their own nuclear power strategies. Here is an overview of the characteristics of each country.
| Country | Target year | Output Plan |
|---|---|---|
| Thailand | Until 2037 | Two SMRs (300,000 kilowatts × 2) |
| The Philippines | Until 2032 | At least 1.2 million kilowatts |
| Vietnam/Myanmar | Around 2030 | Agreement with Russia’s Rosatom |
| Indonesia | Around 2035 | Aiming to be the first in the country to bring a nuclear power station into operation |
| Malaysia | Until 2031 | Included in the 13th Plan |
Differences between small modular reactors (SMRs) and large nuclear reactors:
- Output: SMRs are 300,000 kilowatts or less; large reactors are in the 1 million kilowatt class
- Manufacturing method: SMRs can be installed at the point of consumption following factory production
- Cost: Construction costs are expected to be kept down
Focus: The potential for the reactivation of the Bataan nuclear power station in the Philippines
In the Philippines, plans are being considered to recommission the Bataan Nuclear Power Station, which was largely completed in 1984. The reason it has not been in operation since its construction began is:
- The Collapse of a Dictatorship
- The impact of the Chernobyl nuclear power station accident
The International Situation and Technological Superiority: The Current State of Affairs, with China and Russia in the Lead
Key players in the ‘competition for nuclear power plant contracts’:
| Country | Start of commercial operation | Competitive advantage |
|---|---|---|
| China | December 2023 | Technological development, price competitiveness |
| Russia | July 2020 | SMR takes the lead, agreement signed |
| Japan (Hitachi) | – | Rolled out in partnership with US-based GE |
The view that ‘China is the frontrunner’:
‘Price is also a key factor in South-East Asia. China is ahead in terms of technological development and also has a price advantage.’
Aribon Asawinbonpan, Researcher at the Thailand Development Research Institute
Japan’s Position: Potential Applications for Hitachi, Ltd. and Others
Hitachi has formed a partnership with US-based GE Vernova to develop nuclear power plants in South-East Asia, and the view is that ‘Japanese firms are also making moves’. However, they may be at a disadvantage in terms of price competition compared to China and Russia.
Supplementary Information: Security Risks and Future Prospects for Nuclear Power Plants in ASEAN
Important note:
- Introduction of nuclear power to a nuclear-weapon-free zone: Although Asia is known as a ‘nuclear-weapon-free zone’, the introduction of nuclear power stations into ASEAN carries security risks
- Impact of the situation in the Middle East: Due to instability in crude oil supplies, securing alternative power sources has become an urgent priority.
- Growing momentum: There is no likelihood that the current trend will ‘come to a halt for the time being’
According to Mr Aribon, a researcher at the Thai Development Research Institute, ‘the trend towards the introduction of nuclear power is unlikely to stop for the time being’, and plans are currently underway in various countries.
Comparison with renewable energy:
According to Associate Professor Somboon Rassami of Thammasat University:
‘The output from solar and wind power is unstable, and there are limits to renewable energy. The options are limited.’
Head of the Department of Nuclear Engineering, Chulalongkorn University, Thailand’s leading university
Summary: ASEAN countries exploring new options during the energy transition
Behind the seemingly sensational phrase ‘the introduction of nuclear power’ lie the specific challenges facing the countries of South-East Asia. This is not merely a question of technological choice, but a dilemma concerning how to reconcile economic growth and the need to secure a power supply whilst honoring international commitments to ‘decarbonization’.
In the business world, ‘power shortages’ are emerging as a real cause for concern, driven by factors such as the attraction of data centers and the tightening of environmental regulations. Against this backdrop, with Western companies demanding environmental considerations and ASEAN nations desperately seeking a stable power supply, this situation can be seen as part of the process of shaping a new energy order within the international community.
Of particular note is the shift away from conventional large-scale nuclear reactors towards ‘small modular reactors (SMRs)’. This is not merely a technological innovation, but the result of a drive to achieve practical benefits such as ‘reduced construction costs’ and ‘ease of installation’. This approach, which involves manufacturing the reactors in a factory and then installing them at the point of consumption, is particularly effective in emerging markets such as those in South-East Asia.
However, we must not lose sight of the reality of price competition. China and Russia are leading the way in SMR development and have gained a competitive edge in terms of price. This is a decisive factor for ASEAN countries, which place greater emphasis not only on ‘technological superiority’ but also on the more practical consideration of ‘economic rationality’.
There is also an important perspective to consider in terms of security concerns. In Asia, which is known as a ‘nuclear-weapon-free zone’, the introduction of nuclear power stations could prompt cautious scrutiny at the international level. However, the reality is that, at present, there is a growing need for energy diversification in response to practical challenges such as ‘uncertainty over crude oil supplies due to the deteriorating situation in the Middle East’.
The implications for Japanese companies are clear. Whilst leading firms such as Hitachi are partnering with US-based GE Vernova to expand into South-East Asia, they must recognize that they may be at a disadvantage in terms of price when competing with China and Russia. Rather than emphasizing ‘technological superiority’ alone, it will be important to adopt an approach that takes into account ‘contributions to the local economy’ and ‘environmental considerations’.
