Philippines: Our energy future

Philippines: Our energy future

There had been recent talk about the possibility of finally putting the
Bataan Nuclear Power Plant to good use. It took an Energy secretary who has
no technical background on energy to have the guts to officially bring up
that possibility.

I have no problem with nuclear energy. I have worked on the project during
my time at the then Ministry of Energy. I think there is too much unfounded
fear about it. That, plus the politics of the Marcos plunder made us junk
the Bataan plant.

The sister plants of Bataan in South Korea have been running over the last
30 years with no problems. The containment building is world class and built
to withstand a strong earthquake and even a 747 crashing directly into it.

Having said all that, the decision to finally put Bataan on line isn't going
to be simple. First of all, we have to upgrade a lot of the technical
elements in the plant. Instrumentation will have to be brought up to speed
with the digital age. Other parts of the plant will need to be inspected and
overhauled.

Secondly, the cost of upgrades will have to be compared with the cost of
building an alternative power plant. Kepco once estimated the cost in the
region of a billion dollars. That will be more than the original cost of the
Bataan plant, less the Marcos kickbacks. There should be other more cost
effective options to get 620 MW of power.

Thirdly, a nuclear plant is designed to work in a centralized grid like what
we have now. But new technology is threatening to make the central power
grid as we know it rather obsolete.

Leandro Leviste, the pioneering son of Sen. Loren Legarda, has been saying
the cost of solar power is now at grid parity and can compete with coal.
There are those who say Leviste is dreaming, but the young man is putting
money where his mouth is and is ready to put up solar power installations
without the feed-in tariff subsidy.

Even officials of First Gas, a major power producer, recently recognized
"the rapid, almost exponential advances in renewable energy and storage
technology that are bringing costs closer to fossil-fuel based energy." It
noted that "over the last five years, the cost of solar electricity has
plummeted almost 80 percent and that of wind by 50 percent.

"These rapid reductions in cost today are being driven by what's going on in
China. As of 2015, China had more than 43,530 MW of PV solar installed
(roughly 20 percent of global capacity), with 15,150 MW of that capacity
installed just in that year.

"Their stated goal in 2014 was to have more than 100,000 MW in place by
2020. This target was revised just a year later in 2015, to 150,000 MW
because they now have more confidence it can be achieved. These quantum are
driving economies of scale and pushing them rapidly along the experience
curve to the benefit of solar electricity consumers worldwide."

In fact, just last May, a watershed event in the energy world happened quite
inauspiciously in Dubai when, at an open tender of DEWA (Dubai Electricity
and Water Authority) for 800 MW of solar capacity, the winning bid came in
at $0.03/kwh. The bidding results were so close that the next best bidders
came in at $0.0369, $0.0396, $0.0444, and $0.0448.

The results surpassed a previous 200 MW Solar PV award of DEWA just 18
months earlier of $0.0565, and even that of their coal-fired plant bidding
in Oct. 2015 of $0.0451. Solar PV, with the right conditions, is already
beating coal-fired power in some parts of the world. In other Middle East
countries like Oman, solar energy is already used to pump up oil from their
fields, replacing natural gas.

It isn't only the growing competitiveness of renewable energy that energy
planners must recognize. In a National Electricity Forum in 2012, US Energy
Secretary Steven Chu, a Nobel Prize winning physicist, commented, "If
someone invents a cheap, efficient form of storage, it will be a game
changer."

I was just reading an article about a yet unnamed technology that "will
reside in a box that sits adjacent to every home. A series of boxes can also
replace a local substation. Power can be generated for less than 2 cents per
kwh. Each unit can produce three times the power needed for the average
home, and whatever power is unused can be efficiently stored from one day to
the next."

A startup in Denver founded by a physicist with a strong entrepreneurial
background is developing such a game changer in the form of a thermoelectric
generator. His secret ingredient is an unusual nano-fluid that causes the
system to operate with great efficiencies when there is only a minor
temperature differential, even at night.

Assuming this invention pans out, it will indeed be a game changer. Even if
it doesn't, technology seems to be headed in that direction of off grid
power, such as solar on rooftops. Over time the national electric grid will
be converted to a series of micro grids.

Indeed, as Piki Lopez of First Gas pointed out, "a new energy paradigm is
unfolding fast because consumers are responding to the needs of the planet
and technology is rapidly improving the economics of new off grid power.

"The Philippines has a golden opportunity to leapfrog into this new paradigm
and build an energy infrastructure that's future-ready. To do this it's
critical that we craft a credible glide path that keeps power reliable,
available, and affordable."

Another fact worth pointing out, according to Piki, is that Philippine
growth has been services driven. The power supply that supports such growth
requires more flexible power technologies that are also capable of serving
mid-merit and peaking type of demand.

"This will become even more critical as solar PV costs continue their
inevitable descent. Today, given our electricity prices here, it already
makes economic sense to install solar PV and even solar water heaters on
rooftops.

"Many here have not woken up to this yet but they will, as PV costs come
down even further and, believe me when it does, it will feel like a dam
bursting. Whether they be grid-connected or not (the so called
behind-the-meter), they will have the effect of muting power demand growth
and will change the shape of demand on a daily basis and even on a seasonal
yearly basis.

"As more renewables come online, we will need battery storage capacity to
come along with it to produce power when the sun doesn't shine at night, on
cloudy days, or when the wind isn't blowing. Costs of battery storage are
still high but likewise coming down fast."

Let us also not forget that the Philippines is home to clean, renewable
energy today can already run 24/7 and meet baseload, mid-merit, and even
peaking requirements of the grid. There's more than 2,000 MW of geothermal
potential still untapped in our country.

Our geothermal resources can be developed with even lower feed-in tariff
than were granted to all the other Renewable Energy technologies. We are now
taking geothermal for granted and letting so much of it sit there unutilized
because of current policies.

As more solar and other renewables are added to the grid, those inflexible
coal plants will be used less and less, or they may be kept idling, burning
coal even if not needed because these power plants cannot be turned on and
off to respond to variations of demand in a day.

The usefulness of coal plants will not disappear overnight. But we seem to
be planning for too much already, creating the prospect of stranded
investments that will bring up our electricity bills. We should instead be
planning for a rapidly diminishing role of coal and, eventually, even
natural gas-fired plants in our grid.

As for nuclear energy, keeping Bataan mothballed is probably our only real
option, not because it cannot be safely run but because it is too costly in
economic and political terms to turn it on.

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Ref:
http://www.philstar.com/business/2016/09/07/1621088/our-energy-future

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com