Donnabelle Gatdula and Jess Diaz
Philippine Star
The government has not made any commitment on nuclear energy development despite its invitation for officials of the International Atomic Energy Agency (IAEA) to evaluate the feasibility of commissioning the mothballed Bataan Nuclear Power Plant (BNPP), Energy Secretary Angelo Reyes said on Monday.
“I’m not ready to commit on anything other than studying it – which is vast and fast moving,” Reyes said.
He said the IAEA officials arrived in the country last Monday only to evaluate the government’s plan to revive its nuclear program, including rehabilitating the BNPP.
Akira Omoto, director of division for nuclear power heads the IAEA team, which includes experts from Brazil, Romania and Australia.
Reyes said the development of nuclear energy is only one of the options being eyed to address the rising power demand.
He said world energy demand is expected to increase by 50 percent in 20 years.
“IAEA is some kind of a UN sanctioned body – of which the Philippines is a member. And we are a member since we signed up during the time of US President Eisenhower for the Atoms for Peace program of UN,” he said. “They are here, upon the invitation of the DOE, to assist and advise us on what we have to do to arrive at a reasoned decision on… the mothballed (BNPP).”
Reyes pointed out that the result of the review, which will be out by Feb. 1, will only serve as a guide.
“They will not recommend to us to either open it or not to open it, or rehabilitate or not to rehabilitate. But they will advise us on what we have to do to arrive at that decision,” he said. “We are not compelled to accept any of their recommendations.
“This is not going to be a final report, otherwise it will be a continuing review on what we must do to arrive at a reasoned decision. The reason why we are going to do this is because the plant has been mothballed for 20 years, and it’s a 630-MW and we paid $2.3 billion for it, but even if it has been fully paid we have yet to generate even a single kilowatt from the plant,” he said.
He stressed that the IAEA is not a regulatory agency. “It’s a body that was set up to assist in the transferring of technology and giving advice and essentially it has a verification authority. In other words, it can visit a country and find out if there are certain violations on safety, violation on environmental standards, or violation on nuclear arms,” he said.
He said the government is still studying the feasibility of converting BNPP into a natural gas power plant. But Reyes said IAEA believes such a plan “would be difficult” to carry out.
“To set up a nuclear power plant, even if we rehabilitate, it will take about 15 years. It takes about seven years to build up your human resource. We don’t have the nuclear scientists to study, construct, design, manage and operate,” he said.
“We will not get into anything, but what we are saying is to keep the options open, get and train the people. What we do not want is a situation when we have a power shortage,” he said.
Alternative ways
Pilipinas Shell Petroleum Corp. country chairman Edgar Chua called on the government to explore other ways to deal with soaring prices like demand management, fuel diversification and supply security, emergency preparedness and oil price risk management.
“We can also reduce prices by removing value added tax (VAT) and other taxes,” Chua told delegates and participants at the Energy Summit yesterday.
But he cautioned that if oil prices reach $200 per barrel, there might be no more taxes for the government to remove.
“Wouldn’t it be better to use the windfall VAT to fund the programs that will better prepare the country and our people?” Chua said.
Meneleo Carlos, president of Federation of Philippine Industries, in his presentation called for transparency and immediate response to problems. “To be competitive, be transparent and act,” he said.
Reyes, in his opening remarks, urged the industry stakeholders to take an active stance in the drawing up of a short-term to long-term action plan in the energy sector.
“We also need to bear in mind that, regardless of the milieu, no one plans for failure — particularly on the big stage. This is why the Energy Summit is being convened in a positive, inclusive and solutions-oriented spirit. It is not a venue for finger-pointing, but for consensus-building,” he said. “Responding to the issues and concerns that have surfaced in the wake of high oil prices transcends the domain of any single sector or organization. We want everyone to enter the sessions with an open, collaborative and holistic frame of mind,” Reyes said.
Freedom from Debt Coalition (FDC), on the other hand, urged the Energy Summit organizers and participants to try to focus on fundamentals.
“What this summit intends to achieve, however, is pathetically unclear. It is not clear whether the main concern is to address the impact of high prices of fuel and power to consumers, or to resolve the fiscal quagmires of the government,” FDC said in a statement.
“This is because prior to the summit, the government already laid down its bottom line by rejecting calls for the scrapping of the Oil Deregulation Law and the lifting of value added tax (VAT) on petroleum products,” it said. “The government is also against the overhaul of Electric Power Industry Reform Act (EPIRA) and has rejected calls for the cancellation of onerous IPP contracts,” FDC added.
FDC said the summit might end up as mere “talking shop” if the basic issues are not addressed.
“For how can the summit address price gouging and manipulation, which is common practice of global and local oil cartels, when the government does not want to touch the International Monetary Fund (IMF) and World Bank’s deregulation policy which effectively reduced government’s role in the industry to mere ‘monitoring?’” FDC asked.
“And how can the summit significantly reduce domestic oil prices when Mrs. Arroyo’s VAT is making local pump prices P4 higher? How can the summit reduce the cost of electricity when the government does not want to renegotiate or cancel onerous IPP contracts?”
Open to suggestions
Presidential son and Pampanga Rep. Juan Miguel “Mikey” Arroyo said he is willing to listen to investors and businessmen opposed to his proposed amendment to the EPIRA.
In a statement, Arroyo, chair of the House energy committee, said he is ready to explore “all available options” to accelerate free market competition in the power sector.
“Congress and the executive branch share the common vision of transforming the country’s electric power industry into one that is truly free, fair and competitive,” Arroyo said.
“I am cognizant of the fact that the legislative route is not the only route available towards that end,” he said.
He stressed that the bottom line should be free competition among power producers and the lowest possible cost of electricity for consumers.
Arroyo is the principal author of House Bill 3124, which seeks to amend EPIRA by allowing “open access and retail competition” even if only 50 percent of the plants of state-owned National Power Corp. have been sold to private investors.
In a regime of open access and retail competition, big consumers such as malls and subdivisions could source their power needs directly from the producer that offers the best price, and not from distributors.
Under EPIRA, this arrangement will be allowed only when 70 percent of Napocor plants have been sold. The setup aims to enable the private buyers to compete among one another and prevent Napocor from dictating or even manipulating prices.
Arroyo’s proposed amendment would maintain Napocor’s dominance on half of the market.
According to industry players and big business groups, allowing Napocor to control 50-percent of the market would not really promote free competition or bring down the cost of electricity.
Contesting Arroyo’s proposal are huge business groups including the American Chamber of Commerce, European Chamber of Commerce and the Japanese Chamber of Commerce.
Also opposed to Arroyo’s proposed measure are producers of microchips, computer parts and other electronics products, who are major consumers of electricity. Former energy secretary Vincent Perez is also against the proposal.