PHILIPPINES NUCLEAR MARKET | SPECIAL REPORT


Table 1: Gaps between forecast capacity needs and current projects across the three Philippine grids in MW Grid


Capacity (MW) Luzon Visayas Mindanao


2023 13,125


2,691 3,395


2040 36,101


8,827 8,751


Committed Additions (MW)


9,706 563 539


Bataan NPP (MW)


630 na na


12,640 5,573 4,817


Gap (MW)


The markets The Philippines once had electric system largely owned and run as a government integrated monopoly known as National Power Corporation (NPC or “Napocor”). This system was largely privatised in the 1990s into the “Genco/Transco/ Disco” model. Except for a number of major hydroelectric projects and the diesel plants of their “Missionary Electrification” programme on micro-grids, NPC sold off all its generation assets while the government retained ownership of the transmission system. Generation not treated as “legacy” and still owned by NPC is privately owned. Prospective generators need certification by the Department of Energy before arranging power purchase agreements with Discos or ancillary services contracts with the Transco and then making arrangements for eventual grid connection. The transmission system is now operated as a 25-year


concession under the winning bidder, the National Grid Corporation Philippines (NGCP). They operate the system, maintain it, and expand it. Expansion to connect new generation is planned on five year development cycles and the O&M plus new capital costs are charged, after a rate case review by the Electricity Review Commission (ERC), as a separate charge on rate payer monthly bills. The government retains ownership of the hardware and the land it is on.


The end-users interface with the local distribution outfits,


or Discos. The largest by far, Meralco, serves the Manila metro area with several other load centers also retaining privately-owned discos. Most customers outside the big cities are served by coops. The Discos usually arrange PPAs directly with specific Gencos, although NGCP also operates a five minute spot market for the Luzon and Visayas grids.


Nuclear market penetration Given the long-lead transmission planning publicly available, nuclear power plants fit in doing what they do best – base load. The Philippines is one of the fastest growing economies on the planet with electrical load demand growth to match. The Department of Energy (DoE) published demand estimates out to 2040 which NGCP then designs their grids to support. That demand is growing at 6 to 7% per annum.


The specific demand forecasts through 2040, shown in


Table 1 above, reveal the gaps between forecast capacity needs and current projects. Some new generation is considered “committed” in that the project is certified by the DoE, has a PPA, and has financing. In addition, the Bataan Nuclear Plant (630 MWe) looks like the first nuclear plant to come on-line, following a restoration, probably between 2028 and 2030. The gap therefore represents the new generation capacity that is not yet “committed” that needs filling by 2040. Can nuclear help fill the gaps? That question can be approached in two ways. First, by checking on grid size limitations and NGCP suggested connection points. Once practical considerations are covered, it is possible to postulate two scenarios – one with a 20% market share for nuclear and a second for a 40% market share. From there it is then possible to estimate what type and what number of reactors will fit where. The Luzon grid has a 500 kV line stretching from Lingayen


Bay and the Sunl 1,200 MWe coal plant on the north down to the east side of Manila before curving back west to Cavite on the south shore of Manila Bay. This is called the “Luzon Backbone”. Future plans will extend a branch of the 500 kV line to the northeast from Lingayen Bay to pick up future generators on Northern Luzon and also a run down the west coast of Zimbales to complete a loop circuit of the province and back to Manila. Figure 1, left, from the NGCP planning document shows


the recommended generator connection points. Note that there are only a two planned 1,200 MWe connection points and a single 1,000 MWe connection point. However, private communications suggests that up to a four unit LWR plant could be accommodated on the 500 kV backbone circuits with adequate lead times for planning. While smaller SMRs (small modular reactors) of the


300 MWe class could be accommodated, economics of scale suggest that larger LWR reactors would have a lower levelised cost of power if the grid can handle the power. The traditional operating criterion of a grid not having a single unit greater than 10% of grid demand would currently be satisfied for any single 1000 to 1,400 MWe LWR unit; further demand growth would further satisfy that rule of thumb.


Table 2: Potential for nuclear penetration on each of the Philippine grids Capacity (MWe)


Main grids


Luzon Visayas Mindanao


2023 13,125


2,691 3,395


2040 36,101


8,827 8,751


Committed Additions


9,706 563 539


Bataan NPP


630 na na


Gap


12,640 5,573 4,817


20% share


2528 1115 963


LWRs 2


4 3


SMRs


40% share


5056 2229 1927


LWRs 4 7 6 www.neimagazine.com | October 2023 | 27


SMRs


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