Fuel import savings from nuclear seen lowering power costs, raising competitiveness

By Beatriz Marie D. Cruz, Reporter

A SHIFT to nuclear power will save on fuel import costs and lower power bills, making the Philippines a more competitive destination for investors, a legislator said.

“(Foreign investors) want to build [manufacturing companies] using Filipino labor, but their savings are wiped out by high energy costs,” House Nuclear Energy Committee and Pangasinan Rep. Mark O. Cojuangco told BusinessWorld on the sidelines of a tour of the Philippine Nuclear Research Institute (PNRI) in Quezon City on Tuesday.

Mr. Cojuangco said legislators will not need to propose incentives to build nuclear facilities, saying that “the incentives are already built in.”

He said among the expected savings will be the cost of bringing in conventional fuel in bulk.

“You can fly nuclear fuel on a single airplane and get rid of the massive shipping infrastructure for fossil fuels,” he said.

Alberto Dalusung III, Energy Transition Advisor of the Institute for Climate and Sustainable Cities, said via e-mail, “Nuclear’s advantage is that it has a very high fuel energy density. Thus, its transport cost will be much lower.”

Mr. Dalusung added, “Most renewables, including solar, wind and hydro, do not have a fuel cost since they are indigenous and readily available.”

Khevin A. Yu, Energy Transition Campaigner at Greenpeace Philippines, said there is no assurance that harnessing nuclear energy will be cost-efficient.

“Government cannot intervene and would have to rely on private sector investment that is now focused on transitioning to renewable energy,” Mr. Yu said via chat.

The Japanese government spends an estimated 1 trillion yen annually on damage caused by the Fukushima Daiichi Nuclear Power Plant meltdowns following the 2011 earthquake.

Asked about nuclear plant safety given the Philippines’ vulnerability to natural disasters, Mr. Cojuangco said these concerns can be addressed by a geological site evaluation.

“Locate the plant high enough so that it’s tsunami proof then you engineer the seismic design to be strong enough to withstand any possible earthquake in the Philippines,” he said.

He added that the Bataan Nuclear Power Plant (BNPP) was built at 18 meters above sea level, higher than the Fukushima Daiichi Nuclear Power Plant, which was built at 10 meters above sea level.

Preciosa Corazon B. Pabroa, Nuclear Services Division chief of the PNRI, said a regulator would be tasked with safe nuclear energy use, noting the expected mandate of the proposed Philippine Atomic Energy Regulatory Authority (PhilATOM).

“It won’t be dangerous as long as it is managed… this is why we need a regulator to make sure nuclear power plants are safe,” Ms. Pabroa told BusinessWorld.

House Bill No. 7049 seeks to create PhilATOM, which will have “sole and exclusive jurisdiction to exercise regulatory control for the peaceful, safe, and secure uses of nuclear energy and radiation sources in the Philippines.” The measure was approved by the House Nuclear Energy Committee on March 22.

Under the bill, PhilATOM will oversee the construction and operation of nuclear or radiation facilities. It will also acquire, manufacture, import, export, store, and dispose of nuclear and radioactive materials in accordance with safety standards set by the International Atomic Energy Agency.

The regulator will collect a fee not exceeding P0.02 per kilowatt-hour (kWh) to support its operations. Funding will also come from the budget, and contributions, grants, bequests, and donations from domestic or foreign sources.

The measure also allocates P0.06 per kWh of electricity generated to the Radioactive Waste Management Fund, which will finance the disposal of spent fuel. The fund will be held in trust by the Development Bank of the Philippines.

According to the bill, the minimum elevation of Emergency Diesel Generators serving nuclear power plants was also set at 18 meters above sea level.

PhilATOM’s council will be composed of a radiation expert, engineers, a nuclear lawyer, and either a physicist, geologist, or chemist, according to the bill.

The National Disaster Risk Reduction and Management Council must also create a national emergency plan in the event of a nuclear or radiological emergency.

In 2017, South Korea offered $1.19 billion to rehabilitate the BNPP, which has been mothballed since 1986 due to safety and corruption concerns. If operated, the BNPP is expected to generate 620 megawatts of electricity, equivalent to 5% of Luzon’s energy requirement.

“We have an asset that we can make use of,” Mr. Cojuangco said. “We can validate if it’s well-built or not; we have the specifications. The Koreans that are running the same type of plants are telling us we can run that in five years.”

The House of Representatives aims to pass the bill on second reading when session resumes on May 8.