|Energy Analytical Update | November 13, 2019
Authors: Riley Smith
|ENERGY ANALYTICAL UPDATE|
Philippines Continues Efforts to Develop Civilian Nuclear Power as Other ASEAN Countries Roll Back Plans Due to Costs, Regulatory Concerns
On October 30, the International Atomic Energy Agency (IAEA) presented to the Department of Energy its 19-point Integrated Nuclear Infrastructure Review (INIR) on the Philippines’ readiness to adopt civilian nuclear power as an energy source. The report indicated that the Philippines needs to hold more public consultations on developing civilian nuclear energy, put in place the necessary legal and regulatory framework, particularly with regard to dealing with nuclear security and radioactive waste, and address infrastructure deficiencies before adopting civilian nuclear power. The INIR report is the first of three such reports and covers the IAEA’s initial findings on the Philippines’ practices it has implemented as it moves towards potentially developing civilian nuclear power. The report also includes recommendations for the integrated work plan that is currently being developed by the Department of Energy-Nuclear Energy Program Implementing Organization (DoE-NEPIO). DoE is slated to meet with the IAEA again from November 12-15 in Vienna, Austria, to discuss the findings of the INIR report.
With the Malampaya gas field – the country’s only domestic source of natural gas, from which nearly a quarter of Luzon’s electricity is generated – expected to be depleted within the next few years and brownouts and blackouts continuing despite the Philippines having some of the highest electricity rates in the region, improving the Philippines’ energy security has been a focus of Secretary of Energy Alfonso Cusi since he was first appointed in 2016. Often describing the Philippines’ as “energy source agnostic” when it comes to improving the country’s energy security, Cusi has maintained that civilian nuclear power would be a viable option from the beginning. In October 2016, Cusi created the DoE-NEPIO to coordinate the conducting of studies and research on the feasibility of adopting civilian nuclear power. Initial attention focused on reopening the mothballed 620-MW Bataan Nuclear Power Plant (BNPP). In early 2018, it was reported that DOE was working on a rehabilitation plan for the BNPP that built off of feasibility studies conducted by South Korea and Russia. However, the IAEA has advised against reviving BNPP, though IAEA Deputy Director General H.E. Mikhail Chudakov did not elaborate on why. Last April the Philippines assumed the chairmanship of the Nuclear Energy Cooperation Sub-Sector Network, the specialized body that oversees and coordinates ASEAN-wide cooperation and information sharing on technical assistance and training on civilian nuclear power. Just about a year ago, last December, DoE presented its self-evaluation on the IAEA’s 19 requirements for countries considering adopting nuclear power. Then this past May, President Duterte signed an agreement with Rosatom, the Russian state-owned nuclear energy company, to conduct pre-feasibility studies for small modular civilian nuclear power plants.
Even with a clear push from the current administration, legislation that would provide a regulatory framework for a civilian nuclear power sector has been held up in Congress. One such measure was able to clear the House of Representatives in the Congress that concluded just this past June, but it was unable to gain traction in the Senate. Currently, three bills that seek to establish a comprehensive nuclear regulatory framework have been filed in the House of Representatives, but none have been filed in the Senate. The situation in Congress appears to reflect the public’s sentiment. A Social Weather Stations survey this past May found that 79 percent of respondents were in favor of civilian nuclear energy, though many respondents expressed a clear “not in my backyard” position. Regardless, 72 percent of respondents said that they would support the decision of President Duterte on the civilian nuclear power question, indicating that, if the administration continues to pursue nuclear power, it is unlikely to face significant public opposition.
The Philippines’ continued interest in developing civilian nuclear power comes as other countries in Southeast Asia have postponed their own plans. Within the last several years, Malaysia, Thailand, and Vietnam have put their plans to develop civilian nuclear power on hold. At the 2018 Conference of the Electric Power Supply Industry (CEPSI) last September, Malaysian Prime Minister Dr. Mahathir Mohamad unequivocally said that Malaysia would not pursue civilian nuclear power while he is prime minister, citing concerns over dealing with the resultant nuclear waste. Instead, he said, Malaysia would continue to focus on fossil fuels, including coal, as well as hydro and wind power to produce electricity. Both Thailand and Vietnam dropped previous plans to build civilian nuclear power plants from their recent power development plans. This was the case in Thailand’s recently-approved Power Development Plan (PDP) 2018-2037 and Vietnam’s revised PDP 7 from 2016. In the case of the former, Thailand’s previous PDP had called for the construction of the country’s first civilian nuclear power plant by 2035. In the latter’s case, Vietnam’s National Assembly voted in November 2016 to scrap plans to build two multi-billion-dollar civilian nuclear power plants with Russia and Japan after downward revisions of the country’s power demand forecasts and concerns over rising costs.
Concerns over the relatively high upfront costs of civilian nuclear power infrastructure, along with a lack of the necessary regulatory framework, is a common theme among ASEAN countries. Even Indonesia, which appeared to be headed towards adopting civilian nuclear power, though at a much slower pace than the Philippines, saw its momentum sapped over cost and regulatory concerns as recently as July, when then-Minister of Energy and Mineral Resources Ignasius Jonan raised the topic with the House of Representatives Commission VII for Energy Affairs. Weighing on concerns about the costs of civilian nuclear power infrastructure is the resilient cost competitiveness of traditional energy sources. While much attention is paid to the falling costs of solar PV and wind power, only a handful of Southeast Asian countries are only just now attempting to put in place frameworks to support their adoption. According to the International Energy Agency’s Southeast Asia Energy Outlook 2019, it is coal and natural gas that will make up the largest percentage of primary energy demand in terms of power generation, while oil will continue to dominate in terms of road transport. ASEAN governments’ concerns over the upfront costs of civilian nuclear power infrastructure are likely to continue to lessen the appeal of that energy source in the near term. This is despite the expected tightening of financing options for future coal-fired plants and the projected outlays needed to meet growing demand for liquefied natural gas (LNG), which the Economic Research Institute for ASEAN and East Asia (ERIA) estimates could be at least US$80 billion. The Philippines, on the other hand, remains the exception.