Among other reasons, the Philippines receives the least foreign direct investments (FDI) among the Asean nations mainly because of the high cost of electricity.
In a survey of 44 countries, Manila has the highest cost of power in Asia (at P9.14 per kilowatt-hours). We have one of the most expensive.
One can dissect the details of one’s power bill and know that a multiplicity of fees are added, including “paying for the sins of the past” and the “cost of dealing with the power crisis in the 1990s.”
Power accounts from 14 percent to 40 percent of the cost of business (depending on the product) here. No wonder we cannot even produce our own ball pens. Not only is it expensive but extreme weather conditions like heat, common in tropical countries like ours, weaken the power plants, leading to brownouts.
Based on existing power-plant applications, a gap in supply is being forecast.
Thus, the Duterte administration, granting environmental soundness, is thinking of reviving the infamous white elephant known as the Bataan Nuclear Power Plant (BNPP) in Morong. Anyway, it costs the country some P50 million a year just to maintain the plant.
The plant was reportedly overpriced at $2.3 billion due to alleged kickbacks from Westinghouse (supplier), although most of the local crooks involved are either dead or have migrated.
According to nuclear experts, it will take another $1 billion over four years to revive the BNPP, while similar nuclear plants will cost $10 billion and take 10 years to install.
Once restored, the facility will add 650 megawatts of power. The next question is, will the BNPP be safe?
Apparently, the three nuclear accidents in the past were more the exception rather than the rule, it seems. They are the Three Mile Island in the US, Chernobyl in the Ukraine in 1986 and the Fukushima Dai-ichi disaster in Japan in 2011.
The lessons from these accidents help make the nuclear risk today very low. In an emergency, there is now an escape hatch for other gases in the plant that will contain the fallout. Nuclear fission plants turn water into steam that powers the turbines that produce electricity.
Today, Japan is 33-percent run by nuclear power, France about 80 percent and President Obama has just ordered $8 billion in government guarantees to finance more nuclear plants in the US. Slovenia has a 35-year-old copycat of the BNPP, which has operated safely for the past 35 years. In the estimated 16,000 cumulative hours of nuclear use, the plant logged three accidents that answers the question of the preponderance of risk.
According to businessman and Philippine Chamber of Commerce of the Philippine President Jose Yulo Jr., most nuclear technologies are nearly fail proof. Not only that—nuclear plants do not emit pollutants to the atmosphere and are inexpensive, except for the initial expense—considered “sunk cost” by the government in the case of the BNPP.
According to the World Nuclear Association, electricity produced by nuclear facilities is 79 percent cheaper than oil-based ones, 78 percent cheaper than gas-based and 23 percent lesser than coal costs.
Besides, nuclear-power supply is stable resulting in stable power prices compared to those based on imported coal and gas, which carry supply and therefore price risk, especially those sourced from the Middle East. This is aside from the foreign-exchange volatility affecting rice.
Could nuclear power be the answer to our power crisis? What are our current sources of power anyway?
Power plants in the Philippines are primarily generated by coal-fired plants (42.8 percent), natural gas (24.2 percent), geothermal (13.3 percent), hydro (11.8 percent), oil-based sources (7.4 percent) and by so-called renewables (less than 1 percent). Coal is considered a “dirty” source, the least environment-friendly source.
Will a revived Bataan Nuclear Power Plant and succeeding nuclear plants be the answer to the creeping power shortfall and grossly expensive electricity in this country?
We should study the technical feasibility of the BNPP as soon as feasible.
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Bingo Dejaresco, a former banker, is a financial consultant, media practitioner and political strategist. A lifetime member of Finex, his views here are personal and do not necessarily reflect those of Finex.dejarescobingo@yahoo.com