TORONTO – Heeding key lessons learned from various energy markets, the Department of Energy (DOE) is keen on pushing for ‘premium incentives’ so the government could eventually entice investment-dollars for the country’s nuclear ambitions as reinforcement in the future energy mix.

Energy Undersecretary Sharon S. Garin indicated that the investment perks will be among the policy concerns that the department will be working on with Congress so investors will be lured to stake capital for nuclear power projects.

“I hope Congress can give them major tax breaks – equivalent or even more than what are currently being given as incentives to the RE (renewable energy) sector, because nuclear investments really have huge upfront costs,” she stressed.

Garin emphasized it has yet to be sorted if there is a need for a new law on the set of stimulus that must be extended for nuclear power projects; or these can already be amalgamated into the existing Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.

For RE projects, in particular, it was prescribed that developers can avail of seven-year income tax holiday (ITH), duty free importation of equipment, accelerated depreciation, net operating loss carryovers as well as value added tax (VAT) zero-rating privilege.

Garin admitted there is nothing definite on the table yet how nuclear investments will ultimately be incentivized, but she acknowledged that this is a major policy matter that the DOE will discuss with Congress and its peer-agencies, primarily the Board of Investments of the Department of Trade and Industry as well as the Department of Finance.

For both large scale and the small modular reactor (SMR) types of investments in the nuclear sector, it is reckoned that the magnitude of investments could run from $4.0 million to $7.0 million per megawatt, hence, even for SMR technology at 300-megawatt configuration would require capital outlay of more than $2.0 billion.

When the investment perks for nuclear will be fleshed out, Garin opined that “government must consider the long-term impact of such infrastructure – including the country’s bid for energy security because this will provide electricity for 60 to 100 years; and will also generate jobs for our people for several decades."

The energy official added “the skill set for the workforce and parts of the supply chain that can be localized eventually must be factored in, because this will be a game-changer. And there would also be long-term impact on inflation if we could bring down the cost of electricity in the long run; plus of course, the significant impact on the GDP (gross domestic product) – so the nuclear projects must really get the best incentives.”

On the legislated act that must spur capital flow for nuclear, Garin said the DOE is batting for a comprehensive law to underpin nuclear power projects, similar to how the Electric Power Industry Reform Act (EPIRA) was framed -- in such a way that it already covered all segments and the entire supply chain of the power sector.

In Canada, in particular, at least four laws have been legislated to extensively cover its nuclear industry – and these measures to a great extent provided high level of comfort to its investors. These laws include the Nuclear Energy Act, Nuclear Fuel Waste Act, Nuclear Liability and Compensation Act and the Nuclear Safety and Control Act.

Beyond ensuring the highest standard of safety in nuclear facilities’ operations under the oversight of the Canada Nuclear Safety Commission (CNSC) as federal regulator, it was primarily noted that no investor would risk capital for nuclear power installations if the government or market will not institutionalize liability and compensation policies or regulation.

As explained, the liability and compensation policy shall govern warranted settlements of compensation to civil liabilities and damages in the event of nuclear accidents that may cause injuries, damages to properties or even deaths.

“In our proposal in the Executive version, it’s comprehensive…it defines what is the role of the DOE and what will be the role of the other government agencies, including PhilATOM (Philippine Atomic Energy Regulatory Authority), so there are provisions on liability and compensation; there’s safety and security and we have waste management … so we can have that Omnibus Nuclear Law,” Garin conveyed.

She qualified that since the Senate version of the Nuclear Bill is still under deliberations, the DOE will be working closely with the legislative branch so they can push for specific policy matters that must be integrated in the final version of the law.