NOT surprisingly, the ongoing energy crisis has provided an opportunity for advocates of various “alternative” sources of energy to ramp up their pitches to the public and policymakers. Nuclear power is one of these, and has attracted more attention of late than it perhaps ought to, given the country’s relative lack of development and capabilities in this area.
And of course, any time that nuclear power is brought up, that sets off the small but vocal advocacy led by Pangasinan Second District Rep. Mark Cojuangco for the reanimation of the never-used Bataan Nuclear Power Plant (BNPP). The 620-megawatt (MW) nameplate capacity, Westinghouse-built plant was completed in 1984, but never had the chance to operate after being scrubbed during the chaotic first year of Corazon Aquino’s administration after the ouster of Ferdinand Marcos Sr. in 1986. Cojuangco and his civil-society group Alpas Pinas on April 16 took advantage of the current crisis to again promote the BNPP, an advocacy that Cojuangco is trying to advance in Congress with his filing of House Bill 8567 in early March.
Cojuangco has been doing the same act for years without making any real headway on getting the BNPP raised from the dead, so I tend to ignore him, but in this particular briefing two weeks ago, he made an incredible claim that shouldn’t be ignored, because it amounts to outright misinformation. As reported by The Manila Times over the weekend, “According to Cojuangco, every 1,000 MW of nuclear capacity could save the Philippines between $600 million and $700 million annually in avoided coal or gas importation. The BNPP, specifically, with a capacity of 620 MW, could result in savings of $350 million to $400 million due to avoided coal or gas importation every year — for 80 years.”
I facepalmed so hard when I read that statement that I gave myself a black eye.
Let’s deal with the biggest implied falsehood first, which is that the BNPP, if operating, will last for 80 years. The BNPP is a nearly 60-year-old design and was completed, though never fueled and operated, 42 years ago. The basic power plant design is still in use and is actually quite reliable, but that is not the problem; it is that the rest of the plant is nearly half a century out of date. The useful lifespan of nuclear plants of the same type as the BNPP is thought to be 60–70 years, but beyond 40 years, the operating and maintenance costs begin to steadily increase, due to the inevitable degradation of age.
If the BNPP were rehabilitated now, and if it were operated with flawless precision in terms of maintenance, it might last 20 years, but the cost factor would eventually become too high to justify because of increasing obsolescence and inefficiency alone, even if major failures and repairs were completely avoided. It certainly will not last for 80 years.
Next, let’s sort out the nonsense about hundreds of millions of dollars annually in “avoided costs of imported coal or gas.” First of all, this is misleading because the BNPP will not replace existing generation capacity, whether coal or gas or anything else, but serve as additional capacity. Thus, whatever the fuel bill is for the Philippines will be unchanged by the BNPP’s operation, so the “$350 million to $400 million” figure is a canard.
However, what Cojuangco is actually alluding to, though I am not certain he understands it, is something called the levelized avoided cost of electricity, or LACE. LACE is used along with the levelized cost of electricity (LCOE) to determine what type of generation is a more efficient investment. To calculate LACE, the expected output of one type of technology over the lifetime of a plant (i.e., revenues from energy sales), minus its LCOE, is divided by the same for the type of generation technology not chosen. If the ratio is one or higher, then the selected technology is a good deal.
So, what Cojuangco seems to be asserting is that, if the government would choose to operate the 620-MW BNPP as opposed to building a 620-MW coal- or natural gas-fired plant, the savings would make the BNPP the better choice. Unfortunately (and this is why I don’t think he understands energy economics), he made only a crude, written-on-a-cocktail-napkin argument to that effect using just one factor, fuel cost.
Making an optimistic set of assumptions and calculating LACE for BNPP versus a similar-capacity coal or gas option does not work out well. Assuming that the BNPP would be fully depreciated (which it wouldn’t be, due to the $1-billion to $2-billion price tag for its rehabilitation), assuming reasonable capacity factors (85 percent for BNPP, 60 percent for coal and 75 percent for gas), and assuming a P6 per kilowatt-hour (kWh) generation rate — currently the ceiling on coal-fired generation, under the “energy emergency” pricing mechanism — the LACE ratio for BNPP is negative 1.89 versus coal and negative 0.91 versus gas. Just to break even, BNPP would have to sell its power at P8.40 per kilowatt-hour, and even then it would only raise its LACE ratio to zero. For comparison, on my ordinary household bill from Meralco last month, the generation charge was P7.8607/kWh, a rate that has consumers howling at the moment.
If we flip the ratios around, coal has a LACE of 1.53 compared to nuclear, but only 0.48 compared to gas; remember, the go-no go indicator is if the ratio is equal to or higher than 1.0. Gas has a LACE of 1.001 compared to nuclear — just barely positive — but 2.08 when compared to coal.
Based on this, the BNPP is an utter loser, destined to be a money sink if it is ever operated. It will not provide cheaper electricity, and it will not save on imported fuel costs. I challenge Mark Cojuangco or his Alpas Pinas team to provide the calculations that say otherwise, because at this point, all we are getting are unrealistic and unsupported assertions.
As for my calculations, I will make them available in the coming days, transcribing them from my handwritten notes into a more digestible form for a post, most likely on my own website (www.badmannersgunclub.com). And again, I would like to emphasize that the figures used are not real-world data (because the BNPP is obviously not actually operating), but are rather based on some best-case scenario assumptions selected to give the BNPP an advantage, however unlikely those assumed conditions may be. Even so, I am confident that they are valid, in a relative and fairly comparative way.
ben.kritz@manilatimes.net
Bluesky: @benkritz.bsky.social
Website: www.badmannersgunclub.com
