Published
April 12, 2017, 10:01 PM By Myrna M. Velasco
The Department of
Energy’s (DOE) fascination with its “nuclear power dream” is not fading with
time, as Secretary Alfonso G. Cusi re-stated recently the weekend the
development path they will be pursuing on this sphere.
He said it is among the
action plans that the energy department will be working on, along with the
investment framework that shall be cast for the liquefied natural gas (LNG)
infrastructure chain.
Nevertheless, beyond
public acceptance that the DOE has yet to triumph on for nuclear, the country
may also need to confront hurdles on market of such asset’s massive-scale capacity,
especially in a competitive and private-sector driven electricity sector like
in the Philippines.
Energy Undersecretary
Felix William Fuentebella has indicated that the department will be finalizing
“national position” on nuclear power within the two-year stretch, with studies
and information campaign being dealt with in the 2017-2019 timeframe.
“We have to be open to
it (nuclear), we have to look into it especially the new technologies also,” he
said, stressing that connected concerns on safety and waste disposal are
similarly being studied and fleshed out seriously.
“We have to be very
open because we have to be technology agnostic – looking into the demand
profile of what we need,” Fuentebella noted. What has been missing in the DOE’s
pronouncements, however, are on prospects of off-taker or capacity buyer of the
electricity output from nuclear facilities – because to investors, that entails
viability.
Even in more mature
power markets, it has been indicated that electricity generated from nuclear plants
cannot flourish or compete yet in a merchant market, or the set-up where its
capacity is not covered by guaranteed off-take (supply agreement) or its cost
of construction not shielded by loan guarantees.
Maria Korsnick,
president and chief executive officer of US-based Nuclear Energy Institute
(NEI) had emphasized that even in the more mature power markets of the world,
there is no successful business model yet that points to nuclear thriving in
merchant markets.
“Right now, there is no
business case that proves success in a merchant market for nuclear – that is
why, you see the new nuclear plants being built in a regulated market,” she
stressed.
She qualified that in
many power markets around the world, the capacity of nuclear plants being built
are often underwritten with guaranteed power supply agreements (PSAs)
sanctioned by State or government edicts. Constructions of such facilities, she
said, are also generally supported by loan guarantees underpinned by
governments or state entities.
The questions on
“market” for nuclear capacity as well technology viability are the same
concerns being thrown into the Philippines plan of repowering its
long-mothballed 600MW Bataan nuclear power plant (BNPP), which the Duterte
administration has been pushing for.
Korsnick said there is
no problem re-powering an old nuclear fleet, so long as the entities or
governments in-charge would have “very deep culture of safety” in their
operational practices.
Further, she indicated
that power markets are now tugging their way into the realities of “merchant
market” for nuclear – but several conditions are needed still to secure nuclear
power’s place into the competitive realm of electricity sectors.
“I do foresee in the
future being able to create a climate for that – meaning, if you’re valuing the
product that’s being brought to the market – so that means valuing the energy,
its impact on energy security and the clean air benefits …in the future it
might make sense,” Korsnick added.
To build a new nuclear
plant, it has been noted that the cost may hover at US$3.0 billion for a
600-megawatt facility. It is the upfront investment cost that makes it
extremely expensive, although the price of generation factoring in fuel cost
alone is considerably cheaper than other technologies.
For nuclear to become
competitive in the market – or in an electricity sector significantly driven by
tough competition among private sector players, it was stressed that State
edicts and energy regulatory agencies must provide the rules and environment for
that.
The NEI chief executive
noted that even in the United States, the place of nuclear in competitive
electricity market remains a regulatory experiment still being sorted out by
its Federal Energy Regulatory Commission.
“Until that business
climate is created, nuclear would still struggle finding its way in the
market…I would say, that it might still probably take several years for nuclear
to show itself in the marketplace,” she stressed.
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