Nuclear energy to sustain Philippines’ high economic growth

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TORONTO — The Philippines’ Nuclear Trade Mission to Canada ended the three-day Toronto leg last Friday, March 8. It was a very educational tour filled with meetings for me and other Philippine participants, headed by Energy Undersecretary Sharon Garin and Science Undersecretary Leah Buendia.

On those three days, we saw the McMaster University Nuclear Reactor, we went inside the research reactor that provides neutrons for medical isotopes, imaging service, and power generation (five megawatts), and many other services. The reactor is in the middle of the sprawling university and students, staff, and visitors casually walk outside it without fear or alarm.

We also visited a big CANDU (Canada Deuterium-Uranium) mock-up reactor — not a real nuclear plant but containing all the basic components and various chambers — owned by Ontario Power Generation (OPG). OPG owns and operates the Darlington nuclear generating station, four CANDU reactors that can produce up to 31 terawatt-hours (TWH). This is almost one third of the Philippines’ total power generation of 114 TWH nationwide in 2022.

The top corporate leaders of Bruce Power, the biggest operating nuclear power company in North America, met us in their office in downtown Toronto. Their eight CANDU reactors can produce up to 48 TWH of electricity yearly, or 42% of total Philippine power generation in 2022.

If our Bataan Nuclear Power Plant (BNPP) had been allowed to operate and not killed by politics and health alarmism in 1986, it could have generated about 4.6 TWH/year (assuming 85% capacity factor) for the past 38 years. This is much larger than the output of wind + solar of 2.9 TWH combined in 2022.

As a developing country, we need to overcome our perennial low power generation and low reserves margin relative to demand, which leads to high electricity prices. I checked again the power generation of several countries and compared it with their economic performance over a seven-year period, 2016-2022. I grouped the countries into three: Group A are the G7 industrial countries, Group B are the major East Asian economies, and Group C are the major South Asian countries.

The G7 is characterized by low, if not contracting, power generation and low GDP growth of between 0.2% (Japan) to 2.1% (US). The East Asian and South Asian countries are characterized by high growth in power generation and high GDP growth, except for Thailand (see the table).

The Philippines’ average yearly growth of 4.9% in power generation was equivalent to a 4 TWH/year increase, and our GDP was growing at an average of 4.3% yearly average. In 2023, we grew at 5.6%, and the increase in power generation could be at least 5 TWH. And since the government targets growth of 6-7% yearly from 2024-2028, I strongly believe that we should produce 6-7 TWH/year of power, otherwise the growth target will not be attained due to blackouts, with supply unable to meet high demand.

Meaning if we produce only 5-6 TWH/year of power, our economy will grow only at the 5-6% range. We actually need to grow 8% yearly through the next decade if we want to, a.) drastically reduce poverty, and, b.) reduce the public debt/GDP ratio from the current 62% to 50% or less. The denominator, GDP size, must grow at a high level and be sustained for a decade or more, for us to attain those two big social and economic goals.

I am flying back to Manila in several hours. Yesterday I asked Energy Undersecretary Sharon Garin about the major lessons from this nuclear trade mission. She said that, “The Canadian Embassy has graciously given us an opportunity to comprehensively understand the core competencies of Canada in nuclear power development. Canadians have completed nuclear power plants in time or ahead of schedule, these are competencies we hope to develop in the Philippines. The Philippine Nuclear Energy Program Inter-Agency Committee will likely pursue more targeted and responsive joint activities with Canada in the near future. It is one of the few countries [with whom] we already have an existing bilateral agreement on nuclear energy.”

I also talked to two fellow participants who are local energy players and have expressed explicit interest in developing nuclear power in the country soon.

Meralco’s First Vice-President and Head of Networks, Froilan “Froi” Savet, said that “the Philippines can establish a robust regulatory framework similar to that of the Canadian Nuclear Safety Commission (CNSC) to ensure safe and secure operation of its to-be nuclear facilities. [A] possible Memorandum of Understanding (MoU) with premier academic institutions like Ontario Tech and McMaster University where we could send qualified students on scholarships to study nuclear engineering.”

Aboitiz Power Corp.’s Head of Energy Transition Projects, Felino “Lino” Bernardo, seconded Mr. Savet’s observation, saying that: “In the near to medium term, the Philippine government should first enact enabling policies that would, among others, signal support to those in the power generation sector and enable a seamless but rational allocation of resources. Likewise, multi-sectoral collaboration amongst local stakeholders and extending to foreign ones — who will leverage their experience and expertise — should close the existing skills gap, the development of robust supply chains, and converging of public-private efforts towards harnessing the potential of nuclear technology. There is a need for human capital development via friendly bilateral relations that support knowledge and skills transfers of peaceful use of nuclear energy.”

All good points there. And great guidance and assistance from the Canadian embassy in Manila with the series of meetings and site visits. In particular, David Hartman, the Ambassador of Canada to the Philippines, and Guy Boileau, Senior Trade Commissioner, and Jesus Sanchez, Trade Commissioner. Mssrs. Boileau and Sanchez brought us on a post-event tour of Niagara Falls — a fantastic place. Aboitiz Power’s Mr. Bernardo estimated that the falls’ huge volume of water can possibly generate at least 1,000 MW of power and it is still winter. Expect more power to be produced during summertime when water volume is higher.

Now that new coal plants in “greenfield” investment are prohibited, with the continuing low and pathetic output from wind-solar-biomass, and with new gas plants which are still insufficient to fulfill high power demand, the government and the public must learn to appreciate the value of nuclear energy. Nuclear power will help avoid blackouts in the future, and provide clean and stable 24/7 electricity for the country’s rising demand and fast economic growth.

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.