PHILIPPINES | COVER STORY


Table 1: Summary of Philippines Electricity Options Source


Fuel Costs per mmBTU


Coal LNG PV


Hydro Nuclear


$3 $8 0 0


$0.0046*


1.7 PhP 3 PhP 0 0


0.23 PhP


Fuel Costs Per kWh


Capital Cost per KW


$2000 $1000


$650-750


Capacity Factor Lifetime (approx) %


70 to 90%


load following 18%


varies with site varies with site $3000*


90%


Note: Additional Operations and Maintenance (O&M) expenses also vary with unit size and fuel type. Source: Various * World Nuclear Association, remaining data is from Philippine Energy Plan or other government sources.


years 40 30 20 60 60


The Philippine energy plant to 2040 Indirect but quantitative support for the nuclear option comes from the Philippine Energy Plan: 2022-2040, released in January. It predicts a 7% per annual growth in electricity consumption. The largest generation sources today are coal at 57.2% (mostly imported bituminous grade from Indonesia with some domestic sub-bituminous) and natural gas at 19.2% (all domestic from the offshore Malampaya field, which is in sharp decline). The future of coal is not bright. Indonesia imposed a one


month ban on exports during January due to heavy buying from China, which revealed the Philippines’ dependency. In addition, since 2015 the Philippines has been a signatory to the Paris Accords, promising to forego new coal generation. The energy plan through 2040 predicts a doubling of


natural gas consumption, from liquefied natural gas (LNG) imports. Two terminals with regasification facilities have been approved for construction, which together will replace the Malampaya field and supply current needs. Five other applications have been approved but not given the go- ahead for construction. Hydro has a 7% market share and that is planned to double by 2040 to 14%. Unfortunately, new hydro, even run-of-river, almost inevitably means flooding rice-growing areas. The country already has to import rice, its staple, and displacing rice for electricity will be a hard decision. An earlier “Feed-in-Tariff” scheme on the European model has been indefinitely extended for run-of-river hydro as it barely exceeded half its target even at the guaranteed price of $0.12/kWh. The energy plan had no specific sites for new hydropower. The biggest increase in market share is expected to be


in PV, up from 1.36% to 14.56% in the growing market. The expected investment by 2040, just for PV, is $22 billion in reference scenario. The last Feed-in-Tariff offering for solar was $0.18/kWh. The use of solar is explicitly caveated in the plan with a need for up to 20% capacity backup from gas. As in many countries, renewables including PV are


granted a number of tax advantages to stimulate investment such as a seven-year income tax holiday, no import duties, lower property taxes, zero Value Added Tax (VAT) on sales, tax credits for domestic equipment, and complete exemption of taxes on sales of earned carbon tax credits. A net metering programme for commercial and industrial


customers with over 100kW demand who add PV was recently started.


Is there a role for nuclear? So how does nuclear power fit into the country’s plans? While the formal energy plan assigns nuclear power neither an explicit role nor market share, it does acknowledge the government’s current nuclear assets as well as preparations for a possible revival of nuclear. The options are to revive Bataan, build afresh, or do both. In 2017 Korea Hydro and Nuclear Power (KHNP) estimated


that Bataan could be brought into service in four years at a cost of roughly $3000/kW. Whether this includes a power uprate is unknown, but two similar plants in the US were uprated by about 15%. The design dates back to 1972 and has not had the extensive safety enhancements seen in the rest of the global fleet of light water reactors. Publicly available videos on YouTube as recently as 2019 show a well-kept plant, at least cosmetically. The caretaking efforts by the government have been funded at about $1 million per year, a non-trivial effort given the low labour costs in the Philippines. However, the plant location on a peninsula on the South China Sea is exposed to warm and humid salt air. The Korean inspection and estimate of the plant in 2017 should be expected to document as-found conditions requiring expensive repairs. The other nuclear option is new build. The Philippine archipelago consists of over 1000


inhabited islands. The interconnections between islands are weak and limited as demonstrated during December’s typhoon Odette: 1.1 million people on the island of Bohol lost their sole connection to the main Luzon grid. With minor on-island generation (diesel gensets and small hydro linked to irrigation dams) power was tightly rationed for two months. This weak grid and dispersed load puts an upper limit on


single generator capacity. Only one or two sites are capable of supporting a single conventional large light water reactor. The size of the 630MWe Bataan plant works because it is close to Manila, the largest load centre. This makes small modular reactors (SMRs) a good fit for


the country’s needs. Projected capital costs from vendors like NuScale and General Electric Hitachi (GEH) are running about $3000/MWe with a six pack of NuScale modules (VOYGR-6) rated at 462MWe and a twin unit BWRX-300 plant at 600MWe. A 2021 study by the Philippine government identified ten potential sites. While base loading of nuclear plants has been the rule around the globe, one would expect greater demand for load-following operations in the smaller, more loosely linked grids of the Philippines. U


www.neimagazine.com | April 2022 | 25


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