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Filipino president’s nuclear revival plan faces regulatory, technical, financial hurdles
President-elect Ferdinand Marcos Jr. has vowed to introduce nuclear power to the Philippines in order to lower electricity bills, but analysts forecast a bumpy road for the low-carbon energy source's revival following a 36-year hiatus.
Under the rule of Ferdinand Marcos Sr., the incoming president's late father, the Philippines was developing its first nuclear plant with a 621-MW Westinghouse reactor in the 1970s and 1980s.
But the plant in Bataan on the island of Luzon never entered operations amid safety concerns and allegations of corruption. With the ouster of Marcos Sr. by a people's uprising, and the Chernobyl disaster, his successor Corazon Aquino decided to mothball the facility in 1986.
Marcos Jr., who will take office 30 June after winning May's presidential election, repeatedly stated during his campaign that nuclear power is necessary for the country's electricity mix and that the Bataan plant could be revived.
Analysts expect his administration to face technical and financial hurdles in restarting the plant—and it could be a long while before Macros Jr. can start to address them as the Philippines currently doesn't even have a regulatory framework for nuclear power.
Choon Gek Khoo, an ENR research analyst at S&P Global Commodity Insights, said a Bataan restart would be a "long and tedious" process with "a small chance of success."
The country "lacks a clear policy and regulation, as well as an agency to overview the restart program of the nuclear plant, that is able to provide fundamental guidelines" for operations, Khoo said, adding that Marcos Jr. needs to first develop "a comprehensive policy and regulation design matrix" for nuclear plants.
While the talks of reviving the Bataan plant have been ongoing for years, successive governments have failed to make much progress.
On 28 February, outgoing president Rodrigo Duterte—whose daughter Sara is Marcos Jr.'s running mate—signed an executive order to recognize nuclear power's potential in the country.
"The experience of highly developed countries shows that nuclear power can be a reliable, cost-competitive and environment-friendly energy source," Executive Order No. 164 said.
According to the policy document, the Philippines' demand for "clean energy" is expected to grow by 4.4% per year by 2040, requiring extra capacity totaling almost 68 GW.
Duterte signed the executive order after creating the Nuclear Energy Program Inter-Agency Committee under the Department of Energy in 2020 to study nuclear power. Marcos Jr. will have the authority to establish a nuclear regulatory agency within the Office of the President.
The country aims to cut its GHG emissions by 75% from a business-as-usual level of 3.34 billion metric tons in 2020-2030 to counter climate change. Last October, the Duterte administration set targets of generating 35% of its electricity from renewable sources by 2030 and 50% by 2040 in the Philippine Energy Plan (PEP) 2020-2040, but no nuclear goal was established. The share stood at 21% in 2020.
The technical challenges for the Bataan revival lie mainly in the fact that the plant was built with an outdated design from the 1980s. It is also vulnerable to seismic and volcano activities due to its location, so observers believe meeting the latest International Atomic Energy Agency (IAEA) safety standards would be difficult.
"It is always a challenge for a government to ensure that nuclear power is not only clean, but also safe," thinktank Ember Electricity Analyst Achmed Shahram Edianto told Net-Zero Business Daily. "For that, the government needs strong regulatory capacity, nuclear security, and emergency preparedness and responses."
To overcome the hurdle, the incoming Marcos Jr. administration will need to find reliable business partners from the atomic energy sector to refurbish the plant. But it's not clear how the project will be funded. The plant cost $2.3 billion to build, and estimates of reboot expenses range between $1 billion and $3 billion.
"Economically the costs don't add up" for the upgrades, said Anna Chapman, country lead for the Philippines at nonprofit Climate Action Tracker.
"Nuclear power is far too expensive when compared to alternative options, such as renewables and storage," Chapman told Net-Zero Business Daily.
With Marcos Jr. limited to a single, six-year term, Khoo said there might not be enough time for him to revive the mothballed plant.
"Retrofitting the old nuclear power plant requires a large financial investment, and it's time consuming, which means that the revival project may not be able to be completed before Marcos' presidency ends," Khoo said.
Another option for a nuclear revival in the Philippines is small modular reactor technology, currently under study by the government. The reactors are smaller and cheaper to build compared with traditional nuclear power facilities, and suited to being installed off-grid, according to the IAEA. This means they could be right for the country, which lacks a robust grid network across its archipelago of more than 7,000 islands.
But the public perception of nuclear may also need to improve before any deployment can go ahead. In the PEP, the government admitted negative perception remains "prevalent," and that "public awareness and acceptance are critical to making the nuclear energy program move forward."
"The whole country is prone to extreme weather events, typhoons, flooding, earthquakes, which presents safety concerns," Chapman said. "There will likely be community opposition for a nuclear revival related to safety fears."
Case for renewables
On his campaign trail, Marcos Jr. suggested a nuclear revival could help reduce power tariffs, as rising electricity costs emerged as an important issue among the electorate.
While there are many obstacles yet to be overcome, successfully introducing nuclear energy can indeed help the Philippines enhance its power system while advancing its decarbonization plan, Khoo said.
"The current electricity prices in the Philippines are relatively high, owing to the heavy reliance on imported fuels such as coal and LNG," Khoo said. "Despite renewables like solar and wind demonstrating strong cost advantages versus thermal power, their expansion poses big challenges on grid capability.
"As a result, having nuclear power—an economic and stable power supply—could be one of the solutions to help hedge against the high fossil fuel costs," she added.
Coal accounted for 46.2% of the country's power mix while natural gas made up 12.7% in 2021, according to Ember data. Their prices have been rising this year after Russia—one of the world's largest coal and gas exporters—invaded Ukraine in February.
"Nuclear could be one of the options to help the country decarbonize its power sector while maintaining the electricity tariffs," Edianto said.
However, with the challenges in nuclear power development like safety issues, he suggested: "Diversification of energy and accelerating renewable energy uptake should be the priority."
Marcos Jr. has been a vocal supporter of renewables, but he has not laid out any related policy in detail. The Philippines currently aims to add another 21.9 GW to its installed renewables capacity between 2020 and 2030, including 18.6 GW of solar power and nearly 2 GW of hydropower.
For 2030-2040, the target is to expand the capacity by another 51.9 GW, including 26.6 GW of solar facilities, 14.4 GW of hydropower, and 10.6 GW of biomass-fired power.
"The Philippines will see a decline in the average cost of power generation over time, as the share of renewable energy increases within the power sector, and the costs of renewable energy systems continue to fall," Chapman predicted.
This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.
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