ELEVENTH HOUR: Can nuclear energy lower electricity costs in the Philippines?

Published June 16, 2022, 10:41 PM

by Climate Reality Project Philippines

There has been a lot of talks happening on nuclear energy because of President Rodrigo Roa Duterte’s executive order to include it in our energy mix and President-elect Ferdinand Marcos Jr.’s campaign promise to install at least one nuclear power plant and to consider the revival of the mothballed Bataan Nuclear Power Plant.

Both the outgoing and incoming administrations seem to be keen on nuclear energy, but these questions remain: “Can it really lower electricity costs in the country and is it really worth investing our resources into given the falling costs of renewable energy?”

Why electricity rates in the Philippines are high—at around P9.00 per kilowatt-hour (second highest in Southeast Asia, next to Singapore)—is that we heavily import fossil fuels, such as coal, oil, and gas, for energy use. Almost 80 percent of our country’s power generation is sourced from fossil fuels, while the rest is from renewables, such as solar, wind, hydro, geothermal, and biomass.

Electricity rates in the Philippines are high—at around P9.00 per kilowatt-hour (second highest in Southeast Asia, next to Singapore). (Unsplash.com)

Nuclear energy is not seen to lower electricity costs in the Philippines precisely because we would still have to import uranium or plutonium as nuclear fuel. As in the case of fossil fuels, price volatilities and foreign exchange in the global market will likely be passed on and shouldered by the consumers due to automatic fuel pass-through provisions in power purchase agreements.

Handling and storing nuclear waste and decommissioning power plants will also entail costs. Looking at other countries, the US has allocated US$44.3 billion to build a permanent nuclear waste disposal facility, the funds for such were sourced from the consumers. Meanwhile, in Japan, 11 nuclear power companies have to spend US$123 billion to implement government-mandated safety measures, maintain facilities, and decommission power plants. These do not consider costs from accidents or damages from disasters, extreme weather, or terror attacks just yet.

As nuclear power plants take 10 years on average to be constructed (often subject to massive cost overruns and completion delays), the Institute for Energy Economics and Financial Analysis (IEEFA) said that nuclear energy “will likely become obsolete as more cost-effective, domestic renewable resources come online.” But one might ask: “How about the Bataan Nuclear Power Plant (BNPP)?”

The BNPP—which was mothballed due to safety concerns and corruption issues in 1986 but which the government has also continued paying about P40 million to P50 million a year for its maintenance—is still hounded by environmental and safety concerns, especially in the issue of handling and storing radioactive nuclear waste, which remains radioactive for thousands of years.

As early as 1979, this was brought up by Justice Minister Ricardo Puno who was appointed by Ferdinand Marcos, Sr. to chair the Commission on the Safety of the BNPP and who released a report which found that the power plant is “a potential hazard to the health and safety of the public” and needed “fundamental changes and additional safeguards” such as adequate core-cooling systems and storage and disposal for nuclear waste.

This brings to mind nuclear disasters that happened in Pennsylvania in US (1979), Chernobyl (1986), and Fukushima in Japan (2011). While the Philippine Institute of Volcanology and Seismology (PHIVOLCS) and Philippine Nuclear Research Institute (PNRI) assert that there’s no fault line near the BNPP, according to geologist Kelvin Rodolfo, Ph.D., the Lubao Fault runs right through Mt. Natib, which is near the power plant.

These are critical considerations for the next administration, but what is seemingly clear is that nuclear energy is not likely to reduce power rates in the country and would likely entail more costs to meet advanced technological requirements to ensure the safety of its operations.

What is welcome from Marcos Jr.’s plans is to no longer use fossil fuels and instead utilize renewables. Increasing the share of renewables in our power generation mix is projected to lower electricity rates because renewables are abundantly and domestically available (therefore, no need to import) and the costs of renewable energy technologies are decreasing and becoming more cost-competitive. This, while renewable energy also significantly reduces greenhouse gas emissions, which promote cleaner air, help limit global warming, and mitigate the impacts of climate change.

It’s a peculiar case for the Philippines whose outdated nuclear power plant figures in a renewable energy transition that’s already well underway. Will Marcos Jr. revive the BNPP and in so doing also revive his late father’s legacy? Or will he champion renewable energy and realize the benefits to consumers and the environment?

I hope he makes a wise decision.

About the author

Ian Soqueño is a Climate Reality Leader and a strategic communications professional with engagements in the public and development sectors. He is currently the Plastics and Energy Campaign Lead of The Climate Reality Project Philippines.

 
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