Nuclear power is cheaper

I am in Middletown Pennsylvania. Three Miles Island nuclear power plant is visible from my bedroom window. There is always a plume of white steam rising up its tall chimneys in the horizon. Pennsylvania produces a lot of its electricity from nuclear plants and the power is much cheaper compared with that in its neighbouring state of New York. Before moving to this place last year, my son was living in Albany in New York State. Observing very generous use of electricity, I enquired their monthly power bill. His answer left me wondering. Their bill ranged only between 50 to 100 dollars which appeared too low to me considering the air conditioning and heating use. He informed me that their monthly power bill in Albany was in the range of 400-500 dollars for nearly the same use of electricity.
There were two things that his answer struck me with. State tariff of electricity is different depending on its cost of generation and that nuclear power of old plants with paid-up cost was very cheap. It was like the hydel power from cost paid Mangla and Tarbela plants back home. I was tempted to visualise this model for replication in Pakistan. It may be useful to devolve generation and distribution of power to the provinces like it is here in the US. Transmission could remain central in view of the national grid. It would create a healthy competition to generate least cost power to vie for attracting investment in industry and commerce on that basis.
Least cost power follows a set of global criterion: (1) Optimal technology like combined cycle turbines with waste heat recovery versus the simple steam turbines with low thermal efficiency etc, (2) optimal fuel choice that has the lowest per unit cost of generation. For example, use of oil results in high cost electricity. It makes no economic sense to import oil for power generation; one can instead import end-use optimal fuels like natural gas or coal. Nuclear fuel is relatively inexpensive. Although nuclear power plants have comparatively higher capital cost but the plants run well over 40 years and the levelized unit cost is relatively low. This is what made the state of Pennsylvania go for it in a big way, (3) power plants are strongly subject to the economies of scale. Smaller plants have higher unit cost of generation. It is important to exploit the economies of scale curve and pick the optimal size for different technologies, (4) location of new power plants needs to be selected closer to existing or planned load centres to avoid power transmission over long distances resulting high losses. In our case use of cheaper imported or local coal will provide lower cost power near the coast or close to Thar as the case be.
For Punjab, it would be uneconomical to transport coal from the coast or Thar to places like Sahiwal or Faisalabad. Punjab could buy a piece of land next to Gadani Coal Power Park and transport electricity by wire to Sahiwal and Faisalabad etc, instead.
The devolution of power generation should result in producing cheaper and efficient power. The provinces would not have to blame the centre for unsatisfactory power supply and load shedding. This would be in line with the golden principle of subsidiarity. It would be comparatively advantageous to Punjab if it opted for large-sized nuclear power plants located in Chashma area. The two nuclear plants K-2 and K-3 of 1100MW each under construction in Karachi are also expected to be installed in Chashma, but Punjab could go for nuclear plants of 1100 MW even beyond the two already planned to be installed in Chashma.
KPK would have big comparative advantage in going more for hydroelectricity. It was once indicated that the Province has plans for installing 25000MW new hydel capacity. Small and medium-size hydel power plants interspersed through the length and breadth of the province will also bring about development of local infrastructure and promote development of remote areas.
Balochistan would have lower cost electricity if it went flat out for household solar or mini grids served by local power complexes with solar and wind power generation. Closer to natural gas fields or gas pipelines it would provide least cost electricity installing modern combined cycle gas turbines with high thermal efficiency. This is the least developed province with a scanty population density of about 19 persons per square kilometre. Sources of cheap power would incubate development and transform the lives of the semi-primitive inhabitants in the country side.
Sindh has a wide choice of lower cost power: natural gas fuelled modern CCGT, modern coal fired plants near mine mouth in Thar, wind power in the vast corridor with harvestable wind and building further on nuclear power beyond K-2 and K-3 under construction. In the long past Sindh had attracted massive investment in industry due to cheaper gas from Sui and cheaper hydel power from Tarbela. They could now create even cheaper power from multiple options to give a greater boost to industrial, commercial and technological sectors of economy.
The government should create a composite task force comprising representatives of federal government, provinces and energy experts to provide way forward for devolution of power generation to the provinces. The country is lagging a full revolution behind, it has not even gotten into initial throes of industrial revolution while the world including our arch rival in the East is going for the information revolution that is bringing in its fold the innovative knowledge economy which has begun to make substantial contribution to matured and sagging industrial economies. The devolution and rejuvenation of power sector in Pakistan would help skip ground to catch up with knowledge economy.
The federal government may concentrate on improving the regulatory mechanism on the lines of the American Federal Energy Regulatory Commission by giving Nepra the autonomy that FERC enjoys. The government may not realise it but by jealously guarding its stranglehold of energy sector it is keeping the country from leaping forward.
There is a great merit in allowing private sector power plants to sell power to bulk consumers anywhere in the country through common grid that charges for the transmission service. The most regressive system of IPP power plants that are insensitive to the cost of fuel and resultantly the cost of generation introduced in 1994 needs to be changed. The bus bar tariff of electricity at the plant gate should be inclusive of the fuel cost. Liberating the power sector would create conditions of economic take-off that we have been missing over decades when country after country shot past us. I am still abroad and when you are away from your country it makes you observe every successful mode and model with an innate desire to replicate it back home. This may sound wishful but it is a natural sentiment nonetheless.