The Philippines Sees the (Nuclear) Light – Watts Up With That?

By Joseph Somsel

The Philippines is a tropical country of 113 million people, with beautiful beaches, dense rainforests, 11,000 islands, and a smiling, hardworking, and educated population. English is an official language, unifying its multitude of native languages ​​and dialects, allowing its “foreign workers abroad” to return billions in remittances and savings annually to the country’s economy. What it does not have are extensive indigenous energy resources; high electricity prices have hurt it competitively against its neighbors in Southeast Asia.

What they also have is a roaring democracy: Filipinos returned the “party” to the “political parties.” With the next elections on May 9the, high electricity prices and unreliable service have become a campaign issue. The outgoing Dutarte administration has been criticized by the main presidential candidates for not doing enough about these high prices (presidents have only one 6-year term). While President Dutarte is most famous internationally for his “extrajudicial treatment” of shabu (methamphetamine) to restore civil order and because of his delicate geopolitical balancing act between China and the United States, his administration has been active behind the scenes preparing for an eventual adaptation of nuclear power in the generation mix. This has included a detailed cost study by the Koreans to restore and commission the Bataan Nuclear Power Plant (BNPP), put into caretaker mode in 1986 and never going critical. The International Atomic Energy Agency (IAEA) was also invited to design a government action plan that has already been partially promulgated. The government has tentatively identified 10 sites for possible new reactors. The climax was when Dutarte formally issued Executive Order No. 164 at the end of February which stated flatly: “The National Government is committed to the introduction of nuclear energy technology in the State’s energy matrix for power generation.”

There are two main causes of the long-term increase in electricity prices. One is the rapid depletion of the country’s main offshore natural gas field, which currently powers 20% of generation. The aggressive attitude of the Communist Chinese towards ownership of resources in the area, be it fish, coral reefs or oil/gas, hampers further investment in expanded exploration and development in the South China Sea. The second was the signing by the previous administration of Benigno “Noynoy” Acquino of the Paris Agreements in April 2016. He promised that the Philippines would give up permits for new coal plants that are not yet in the regulatory process. In exchange, the Philippines was promised funding for the development of alternatives; the money has not arrived to date. Coal currently provides almost 60% of the kWh sold and is fueled primarily by Indonesian bituminous at a fuel cost of around $3 USD per million BTU.

Dutarte’s Department of Energy future energy plan, published in January 2022, expected that the way forward (without nuclear power) would be a big shift to imported liquefied natural gas (LNG) and a massive expansion of photovoltaics ( PV). LNG deliveries on the spot market in Tokyo Bay have been running at $8 USD per million BTU (long-term contracts may be a bit lower) before the Ukraine War caused massive disruptions in supply. demand and prices. Some expansion in hydropower was forecast, but recent calls for more projects failed to secure the expected bidders, even with attractive “feed-in rates.”

How do the candidates seeking to succeed Dutarte expect to lower electricity prices when current options under the Paris Agreements replace $3 coal and $2 natural gas with $8+ LNG and Chinese-made PV? An aggressive nuclear power program may not immediately reduce current bills, but it will at least provide some price and supply stability while reducing COtwo emissions Germans and Filipinos today may be sharing the same regrets about their earlier decisions to shut down nuclear power.

Joseph Somsel is a longtime nuclear engineer (with an MBA) and public energy policy analyst. He can be found further elaborating on the Philippine energy situation in the April 2022 issue of the International Journal of Nuclear Engineering.

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