Russia says ‘nyet’ to BNPP, and so should PH

BY THE MANILA TIMES, APR 8, 2018

THE small, vocal advocacy for the resurrection of the Bataan Nuclear Power Plant (BNPP), by now Southeast Asia’s most famous white elephant, is remarkably resilient, so there is little reason to believe that yet another reality-based rejection of their cause will stop them or even slow them down.

It ought to, however, because this time the critic was the very country that seemed at first to really be the one that would help make their ill-advised dream come true. On Wednesday, in an interview with CNN, Russia’s ambassador to the Philippines Igor Khovaev described the BNPP as “absolutely outdated,” adding rather unambiguously that reopening the mothballed 32-year-old plant was “not possible at all.”
Ouch. That’s got to hurt.

Before Khovaev is dismissed as just another foreigner with an opinion, it should be pointed out that he is not only in a better position than most to offer an assessment, current circumstances regarding Russia’s nuclear business, particularly here in the Philippines, demand that whatever he does say about it be absolutely in line with his government’s views and policy. Any comment about nuclear energy has as much effect on Russian aspirations as it does the Philippines’, a fact that he would have been made keenly aware of before sitting down with CNN if he wasn’t already.

Back in August of last year, a technical team from Rosatom and GEN Energija, the state-run atomic energy companies of Russia and Slovenia, respectively, visited the BNPP to assess its viability. Russia in particular is aggressively marketing the export of its nuclear power technology and know-how—the country collected about $133 billion in project agreements in 2016—so there was a clear ulterior motive involved. The result of the inspection, however, was not encouraging to those insisting all the BNPP needs is to be fueled and switched on. The Russian-led team estimated refurbishing the supposedly “well-preserved” plant could be accomplished for $3 billion to $4 billion—a far cry from the previous estimate of about $1 billion provided by a similar evaluation by Korean experts in 2010.

While the Russian evaluation was circumspect in making a judgment about whether or not the Philippines ought to open the BNPP, there were two clear implications of the report, one certainly intended and one that was most probably not intended.

The intended message was that the Philippines ought to consider some of the fine nuclear power products being peddled by Russia, such as its VVER-1000 reactor—the closest thing there is to an off-the-shelf nuclear system on the world market at present—or perhaps a small modular reactor (SMR) system it is developing, one that produces about 100 megawatts and is designed to be installed in a floating power plant, perfect for remote communities. Along these lines, the Philippines and Russia signed a memorandum of agreement last December, whereby the latter will help train engineers and transfer some of its vast nuclear knowledge.

The other implication, which the Russian nuclear concern wouldn’t want to draw attention to, is that nuclear power always costs more than assumed at first. That is a problem because those starting assumptions are what are used to sell nuclear power to skeptical governments and the public, with the nasty surprise of the real costs almost never manifesting itself until involvement in the project becomes inextricable. A study published in Energy Policy in 2016 reviewed the cost history of 349 reactors—58 percent of the world’s total—in seven countries in a stated attempt to demonstrate that there was no inherent cost escalation in nuclear power project construction, but found that the truth was quite the opposite: Except in South Korea, every reactor had escalated costs from start to finish. South Korea (comprising only 7 percent of the total) didn’t follow the pattern—but the study clarified that the completeness of South Korea’s data was uncertain, and it could only be shown to have avoided the cost trap if the calculations were done using overnight costs. (Overnight cost is the cost of the plant if could be built overnight; it is completely hypothetical, ignoring factors such as interest, exchange rates, and commodity price changes, and is therefore practically useless).

The cost progression of the BNPP, incidentally—from $1.1 billion as designed to $2.3 billion in its current state to about $5.8 billion in an operating condition—closely matches the average proportions of cost overruns for any nuclear plant.

The natural conclusion to all this is that the only business case for nuclear power is an extremely poor one, one that is so irresponsible that it could arguably be construed as economic sabotage. Evidence to support this rather harsh assessment is plentiful: Excluding China, which has to be excepted only because they are so opaque about it, every significant nuclear project underway anywhere—in the US, in France, the UK, Finland, Turkey, South Africa, Vietnam, South Korea —is far beyond its schedule and its budget. The Russian-led projects are no exception: Of 19 projects using the VVER-type reactor currently underway or in an advanced stage of planning, 10 have resulted in cost and schedule overruns, and six have been suspended, primarily because of budget constraints.

The nuclear advocates who continue to insist that the BNPP, or nuclear power in general, is a good option for the Philippines ought to be compelled to invest their own money in it, rather than the taxpayers’. The moment in which “nuclear energy” ceases to be a part of the public policy lexicon would surely quickly follow.