Risky Investments: Nuclear Energy in the Developing World

David Lin
January 17, 2019

Submitted as coursework for PH241, Stanford University, Winter 2018

The Nuclear Energy Promise

Fig. 1: Picture of a Model of Vietnam's Planned Ninh Thuan Power Plant. (Source: Wikimedia Commons)

Nuclear energy has consistently pushed to the forefront of debates of energy solutions in the developing world. Between 2002 and 2030, energy demands in developing countries are expected to grow at twice the pace of their developed counterparts. [1] However, energy economies dependent on fossil fuels like coal and gas are not sustainable by virtue of both their implicit resource scarcity and their environmental consequences like climate change. At a glance, nuclear power emerges as the energy panacea, providing highly efficient energy production at low costs. With nearly zero carbon emissions, nuclear energy would mitigate climate change and reduce local environmental risks. In the long term, nuclear power could create a more diversified energy economy that is less dependent on volatile resource prices. Indeed, whereas a doubling in natural gas prices would increase energy generation costs by 70 percent, a doubling in uranium prices would only increase generation costs by 5 percent. [2] In recent years, China and India epitomized the potential of rapid growth in nuclear power production in developing countries. [3] However, this success is not so easily extrapolated to other developing countries that exist on all ends of the spectrum of wealth, regional stability, and political structure. Like many other silver bullet solutions, nuclear energy carries several risks that need to be weighed in the context of each developing nation.

Cost Debate

For a time, Vietnam appeared to be the promising newcomer in nuclear development, having established multi-billion power projects partnered with Russia and Japan (see Fig. 1). In November 2016, Vietnam's National Assembly rejected these plans due to declining alternative energy costs and slowed economic growth reducing energy demands. [4] This development is symptomatic of the larger financial obstacle nuclear energy presents in developing nations. For many poorer countries, the high startup costs of a nuclear program would come at the expense of more immediate issues like education and poverty reduction. [3] Even if this justification could somehow be made, the necessary infrastructure does not exist in many countries. Of the 31 developing countries in 2010 expressing interest in nuclear energy, 17 of them had electric grids too small to accommodate a reactor. [5] Moreover, many countries have lowered nuclear energy as a priority upon evaluating underexploited other alternative energy solutions. For instance, sub-Saharan Africa has only accessed 32 percent of the region's hydroelectric potential. [3]

Nuclear Proliferation

Beyond the costs, the biggest danger of nuclear energy for civilian use is the risk of nuclear proliferation. Intuitively, any country receiving nuclear assistance would be able to develop a nuclear weapons program with a much-reduced startup cost. Historically, recipients of nuclear assistance were 360 percent more likely to develop or acquire nuclear weapons. [6] This effect is particularly pronounced in low security environments where nuclear weapons might be perceived as a powerful military deterrent. The risk of nuclear weapons at the hands of unstable governments poses a serious international security threat that cannot be taken lightly.

© David Lin. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.


[1] "World Energy Outlook: 2004 ," International Energy Agency, 2004.

[2] "International Status and Prospects of Nuclear Power," International Atomic Energy Agency, GOV/INF/2008/10-GC(52)/INF/6, August 2008.

[3] J. Goldemberg, "The Limited Appeal of Nuclear Energy," Scientific American, 1 Jul 07.

[4] V. T. Khanh, "Vietnam Scraps Plans for Its First Nuclear-Power Plants," Wall Street Journal, 10 Nov 16.

[5] "International Status and Prospects of Nuclear Power," International Atomic Energy Agency, GOV/INF/2010/12-GC(54)/INF/5, Septemper 2010.

[6] M. E. Brown et al., eds., Going Nuclear: Nuclear Proliferation and International Security in the 21st Century (MIT Press, 2010).