Nuclear power projects eyed for PPP inclusion

MANILA, Philippines – The government is considering the inclusion of nuclear energy projects in the Private Public Partnership (PPP) scheme, a ranking energy official said.

National Power Corp. (Napocor) president Froilan Tampinco told participants in the Nuclear Power Forum Philippines 2010 that “there should be a strategic private-public partnership in developing nuclear energy.”

“Under the present PPP scheme of the government, there can be a possible strategic partnership between the government and the private sector, in order to take care of handling the possible entry of nuclear facility,” he said.

Napocor is part of the team the Department of Energy (DOE) has formed to explore the potential nuclear energy development in the country.

During the forum, discussions centered on how to encourage investors to put in money for the construction of a capital-intensive nuclear power plant.

The PPP initiative, launched recently by the Aquino administration, provides state guarantees in the contracts to be entered into between government and winning bidders of PPP projects.

“Each project will be looked at differently, and the government will use independent financial advisors to study each project carefully before it is bid out, to determine what protection is necessary. It is important to note that this protection will be limited to regulatory risk. Commercial or market risk, which you are in the business of determining, will be borne by investors, as it should be,” President Aquino said in his speech during the PPP launch.

If subjected to PPP, the nuclear energy project proponent will be able to enjoy the program’s benefits.

“This is different from previous contracts where the government provided politically difficult guarantees to investors against market risk. For instance, with power supply contracts in the past, the government committed to buy power output regardless of what the actual demand was,” Aquino added.

Earlier, the DOE said it will start a feasibility study on the safety concerns of a nuclear power facility. The study will signal the start of the country’s engagement in nuclear energy development.

There are now several bills filed in Congress seeking to govern the use of nuclear energy to generate power in the country.

The concern of developing nuclear energy has been floated anew amid the power shortage being experienced in the country.

During the forum, there were also discussions aiming to address an urgent power generation gap already impacting the Philippine economy, with rotating three-hour outages in Metro Manila, the country’s political and economic center.

The utilization of nuclear energy is also seen to lower electricity prices. At present, electricity in the Philippines is the third most expensive in all of Asia.

The Philippine Energy Plan 2007-2014 indicates room for the mothballed Bataan Nuclear Power Plant and four more nuclear plants, the earliest to be commissioned by 2015.

Among the sites being eyed for nuclear facilities are Palawan, Cagayan, Cavite, Negros Oriental, Zamboanga del Norte, Bataan, Negros Occidental, Quezon, Batangas, and Sarangani.

Nuclear power is expected to provide about 3,000 megawatts in generation capacity for the Philippines, with total capacity building planned at 15,000 MW by 2018. –Donnabelle L. Gatdula (The Philippine Star)