Tuesday, April 09, 2024

BWorld 695, On the power reserves market and the cost of different energy sources

On the power reserves market and the cost of different energy sources
April 4, 2024 | 12:02 am

My Cup Of Liberty
By Bienvenido S. Oplas, Jr.

The Independent Electricity Market Operator of the Philippines (IEMOP) held a media briefing last week on March 28. Among the topics discussed was the Philippines reserves market that began operation on Jan. 26, 2024.


The IEMOP showed data that the reserves of the National Grid Corp. of the Philippines (NGCP) have improved significantly starting February. In the Luzon grid for instance, the contingency reserves have increased from 31% in February 2023 to 100% in February 2024. IEMOP added that “For increased reliability in power grid operations, total scheduled capacity should meet the required level of reserves (i.e., 100%).”

These high contingency reserves mean the likelihood of a blackout is almost zero as any big power plant having an unscheduled shutdown or prolonged maintenance shutdown can be covered by the high level of ancillary services (AS). In my previous article, “10 lessons from the PHL Nuclear Trade Mission to Canada” (March 21), I lambasted the huge increase in the AS rate, meaning the higher transmission charge in our monthly electricity bill which can contribute to higher overall inflation. Now I understand that the pain of a higher transmission charge is less than the gain of a low chance of any blackout. After all, the most expensive electricity is no electricity.

Also covered in the IEMOP media briefing was the power generation mix nationwide. Coal, the most publicly demonized energy source, remains the main savior, the reason why the Philippines does not suffer from daily “Earth Hours” (the celebrate darkness campaign). Meanwhile, the publicly beloved wind/solar power can contribute a measly 3-5% of the total power generation in the country. This is technically insignificant and if relied on, will ensure that “Earth Hours” are guaranteed to happen every single day in the country (see Table 1).

Thank you, NGCP, for finally doing what you should have done many years ago — ensuring adequate reserves and sparing the country from horrible frequent yellow-red alerts yearly. Thank you too, coal generated power plants, for enduring the irrational attacks of the climate activists and giving us lights and air conditioning every day and night.

But there is a question mark on the action of the Energy Regulatory Commission (ERC) which suspended the price determination methodology of the reserves market. No price stability means no supply stability for reserves and hence we might go back to the ugly situation of frequent yellow-red alerts.

That is a topic for another column.


The Philippine Electric Power Industry Forum (PEPIF) 2024, organized by IEMOP, will be held tomorrow, April 5, at the Iloilo Convention Center (ICON) in Iloilo City. The conference theme is “Powering a Sustainable and Secure Energy Future for the Country.”

Among the speakers will be Iloilo City Mayor Jerry P. Trenas, top officials of the Department of Energy led by Secretary Raphael Perpetuo M. Lotilla,  ERC Chairperson and CEO Monalisa C. Dimalanta, National Electrification Administration Administrator Antonio Almeda, National Transmission Corp. President and CEO Fortunato Leynes, NGCP Head of Transmission Planning Redi Remoroza, Aboitiz Renewables, Inc. President and COO James Villaroman, MORE Electric President and CEO Roel Castro, Napocor President and CEO Fernando Roxas, ACEN Corp. COO Miguel de Jesus, and IEMOP President and CEO Richard Nethercroft.

They will discuss the Philippines’ energy transition plan via more renewables. Not in the program is a discussion on nuclear power development as part of energy security for the Philippines. Luckily, I saw a new paper on nuclear energy price competitiveness.


The paper, “Comparative Analysis of the Levelized Cost of Electricity of Selected Power Generation Technologies in the 2020-2040 Philippine Energy Plan” (March 2024, 49 pages) was written by Dr. Arturo E. Romero, Jr., a geophysicist and new Department of Science and Technology Balik Scientist who will be based at the Philippines Nuclear Research Institute (PNRI).

The focus of his study is the computation of the levelized cost of electricity (LCOE) of various energy sources. LCOE is defined by the author as “the sum of all discounted cost of the facility normalized by the total power produced over its technical life. It focuses on plant level financials without considering system-wide interplay of power supply and demand, dispatchability and crowding of the grid systems and the effects on electricity pricing.”

The author produced several charts and figures on the computed LCOE of Philippines’ existing and potential energy sources. From the math model and data he gathered, the results show that the cheapest LCOE is to rehabilitate and refurbish the Bataan Nuclear Power Plant (BNPP) which will have an average LCOE of only $44/megawatt hour (MWh), the second lowest to nuclear long-term operation (LTO) life extension at only $34/MWh.

The next cheapest LCOE comes from a liquefied natural gas (LNG) combined cycle (CC) gas turbine and from solar photovoltaic (PV) at $52/MWh. LNG open cycle (OC) has a high LCOE of $94/MWh if there is no carbon tax included. The most expensive LCOE would be from concentrated solar power (CSP) at $123/MWh (see Table 2).

Thank you, Dr. Romero for producing the numbers. And thank you, PNRI and its Director Dr. Caloy Arcilla, for getting this brilliant mind back to the Philippines.

As an economics researcher and writer, my main concern is how the Philippines can attain high economic growth and sustain this for many years in order to create more jobs and entrepreneurs for Filipinos and Philippines-based businesses. Having expensive electricity and intermittent, unstable and blackout-friendly energy sources are inconsistent with the goal of sustained high growth.

I like this observation made by Lino Bernardo, Head of Energy Transition Projects of Aboitiz Power, among my co-participants at the Philippines Nuclear Trade Mission to Canada last month in Toronto. He said:

“While the first nuclear power plants are expected in the 2030s, other baseload technologies must continue to provide the much-needed power this decade and into the next. Beyond the generation of stable electricity, the country should also look to harness the potential of nuclear energy in the academe, industry, and medicine, through atomic particle research, radioisotopes as industrial tracers, and radiation for diagnosis and therapy procedures, respectively. We need to prepare in terms of policy, regulation, and education to ensure safety and proper waste management in nuclear power generation and further.”

Energy security will help attain overall economic security. People can work productively even when the sun is not shining, and the wind is not blowing. They can walk the streets safely at night under bright lights, travel long distance via trains that run on electricity, and so on.

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.

See also:
BWorld 692, 10 lessons from the PHL Nuclear Trade Mission to Canada
BWorld 693, On Earth Hour, Lenten travel, and Pinoys in Toronto
BWorld 694, High growth imperative and fiscal consolidation

Fiscal Irresponsibility 35, The AFP and PCG lobby for trillions pesos procurement

On the lobby by the Armed Forces of the Philippines (AFP) for P2 trillion, reported here,

Marcos OKs military’s P2-trillion wish list for weapons, equipment
January 29, 2024

Let's do some math.

AFP lobby is P2 trillion for procurement alone. Training may be included here but not spare parts and services, ammo replacement, etc. not included yet. Over 10 years would be another P0.5 trillion.

The Phil. Coast Guard (PCG) would likely be asking for their own huge boats, many big boats with materials, hire xx thousand new personnel, training, spare parts, etc. Maybe will cost another P1 trillion over 10 years or so.

So AFP + PCG lobby = P2.5 trillion + P 1 trillion = P3.5 trillion. On top of existing spending for these two big agencies. PNP lobby not included yet.

So PH will borrow P3.5 trillion -- taxes and fees won't be able to cover it, cannot even cover regular spending, only borrowings. If borrowed over 25 years to pay, that's P140 B/year, principal amortization alone.

Interest payment, currently the 10-yr PH govt bond is 6.53%. Assume an average 6%, for an optimistic view perspective.

So P3.5 trillion x 0.06 = P195.9 B/year, interest alone. Round off to P196 B.

Principal + interest = P140 B + P196 B = P236 B/year. 

AFP and PCG lobby alone annual payment, on top of what they regularly receive. And on top of current interest payment (P670 B in 2023, possibly P750 B in 2024,...) and principal amortization for regular spending and borrowings by the government.

Where to get that big fund yearly? From the pockets of AFP and PCG generals and colonels? Will not be enough because they don't even want to pay for their own pension, don't want to contribute to it, don't want taxation of their monthly pension, etc.

True that all administrations, past and present, have their practices of wastefulness in public spending. But we cannot solve wastefulness with another wastefulness.

Gung ho of going over the brink, "gyera na total hindi obra diplomasya" -- Ukraine did it. And Ukraine got what they wish for -- large scale destruction of many parts of their country, lots of deaths and wounded.

People who wish for military confrontation with China over those far away islets, set aside high profile diplomacy and negotiations -- maybe they can start with your children and grandchildren, sell their properties to pay for more taxes to finance a huge war.

The benefits of this policy -- how many billions or trillions, from where?

See also:
Fiscal Irresponsibility 32, US public debt rising by $7.7 B/day, October 29, 2023
Fiscal Irresponsibility 33, More about the US deficit and debt, November 18, 2023
Fiscal Irresponsibility 34, On sectoral parochialism and rising public debt, February 20, 2024

Sunday, April 07, 2024

BWorld 694, High growth imperative and fiscal consolidation

High growth imperative and fiscal consolidation
April 2, 2024 | 12:02 am

My Cup Of Liberty
By Bienvenido S. Oplas, Jr.

The Development Budget Coordination Committee (DBCC) composed of the Departments of Finance and Budget and Management (DoF and DBM), the National Economic and Development Authority or NEDA, plus the Bangko Sentral ng Pilipinas will announce the GDP growth targets for 2024 to 2028 this week. They will decide, among others, whether to keep the 6.5% to 7.5% growth targets made in the November 2023 meeting or revise them to 6% to 7%.

Personally, I wish that we would target 8-9% yearly growth because of our low per capita income — we need to raise it high enough in a short period. I believe 8-9% is becoming realistic as the global economic environment is not improving, it seems to be worsening. The continued high interest rate policy is not conducive for large business expansion, plus the high interest payments for our public debt.

Here are some reports on the Philippines’ growth prospects in 2024 as reported in BusinessWorld: “PHL to grow 6.4% this year — Fitch” (March 15), “Marcos says too early for rate cut, eyes 8% growth” (March 21), “GDP likely grew by 6.1% in Q1” (March 26), and, “S&P Global keeps Philippine GDP growth outlook for 2024, 2025” (March 27).


I checked the database of The Maddison Project — made by a group of close colleagues of Angus Maddison (1926-2010), an economics professor at the University of Groningen, Netherlands, to continue Maddison’s work on quantitative macroeconomic history. Official macroeconomic records from a century or more ago are not available, so the Maddison Project made extrapolations and multiple benchmarks with economic and math methods to approximate such economic data, including for economies that were not autonomous back then like Hong Kong, Singapore, and Taiwan.

In 1870 — the earliest year with comparable data for many countries — the Philippines had a real GDP per capita (at 2011 US$) of $764. This rose to $1,845 in 1940, a year before Japan invaded the country during World War II. By 1950, it was down to $1,310.

We heard or read that the Philippines was the “second richest country in Asia after Japan post World War II.” This is not true. By 1950, four economies were richer than the Philippines: Singapore, Hong Kong, Taiwan, and Malaysia (see Table 1).

Today we hear saber-rattling and war mongering over Taiwan and the South China Sea, and that Philippine taxpayers and businesses must prepare to surrender additional trillions of pesos to the military and defense agencies — and their lobbyists — on top of trillions currently collected.

Look at the data on Japan in Table 1. Its per capita GDP in 1940 was $3,815. This shrank to $1,776 in 1945 (the end of World War II) and recovered somewhat to hit $2,519 in 1950. War preparations, if not going to war itself, will siphon precious resources, especially manpower, away from productive activities.

We should instead focus on more economic growth, not more war mongering; more public spending on infrastructure, not the public purchase of submarines and warships, jet fighters and missiles.


There were three water-related reports in BusinessWorld last week: “SC rules dam water excluded from tax on national wealth” (March 24), “Chances of La Niña setting in by June now at 62% — DoST” (March 26), and “PHL needs more nature-based infra to mitigate flooding — OECD” (March 31).

The main problem in the Philippines and other tropical countries yearly is too much water — with lots of rain and the subsequent flooding — not the lack of water. For instance, from 2020 to 2023, which were characterized by a prolonged “triple dip” La Niña, there were 12 months of rain in the Philippines. We simply lack dams and catchment structures to store excess water and reduce flash floods downstream.

Budget Secretary Amenah F. Pangandaman recently unveiled two timely programs, the Support and Assistance Fund to Participatory Budgeting (SAFPB), and Water Supply and Sanitation (WSS) programs. The goal is to expand access to potable water and sanitation services in lagging municipalities nationwide. As Chairperson of the Philippine Open Government Partnership (PH-OGP), she has more leeway to encourage more LGU participation in this important program to optimize water storage and usage.

And last week, on March 25, the DBM held a coordination meeting for the National Government Rightsizing Program (NGRP). Secretary Pangandaman has endorsed and supported the NGRP since her first month in office in July 2022 as this program aims to enhance the government’s institutional capacity, streamline operations of different agencies of the executive branch, and right size organizational structures for improved public service delivery at lesser cost to taxpayers. Go for it, DBM.


Here are some recent reports in BusinessWorld related to fiscal consolidation: “Gov’t faces challenges in bringing down fiscal deficit” (March 15), “Recto’s proposal to sell NAIA land to raise funds draws mixed reactions” (March 20), “Double-digit growth in revenues, expenditures continues — DoF chief” (March 21), “2025 budget preparations ‘on track,’ DBM says” (March 21), and, “New taxes ‘last resort’ — Recto” (March 25).

The various government-owned and -controlled corporations (GOCCs) and government financial institutions (GFIs) are among the costly agencies that instead of contributing to the national coffer, rely on regular or occasional big subsidies. So, Finance Secretary Ralph G. Recto is correct in looking at the privatization of certain GOCCs to raise revenues and control the big annual subsidies. Which will give more leeway for Budget Secretary Pangandaman to reallocate resources on programs and agencies related to more infrastructure development.

The Philippine Health Insurance Corp. (PhilHealth) is the biggest subsidy dependent GOCC. Notable are three government energy corporations — the National Electrification Administration (NEA), the Power Sector Assets and Liabilities Management Corp. (PSALM), and the National Power Corp. (Napocor) — that continue to rely on subsidies when private generation companies and private distribution utilities are making money even while paying taxes (see Table 2).

These three energy GOCCs should go. The Electric Power Industry Reform Act (EPIRA) of 2001 (RA 9136) mandates that power generation should be competitive and privately run so PSALM and NPC have little or no justification to continue existing. Electric cooperatives monitored and administered by the NEA should not be getting subsidies.

See also:
BWorld 691, On a huge budget surplus and long-term privatization revenues
BWorld 692, 10 lessons from the PHL Nuclear Trade Mission to Canada
BWorld 693, On Earth Hour, Lenten travel, and Pinoys in Toronto

Philstar 5, The Philippines' nuclear trade mission to Canada

The Philippines' nuclear trade mission to Canada
By Bienvenido Oplas Jr.  10 March 2024

Toronto – I am one of the participants in the Philippines “Nuclear Trade Mission to Canada” organized by the government of Canada through their embassy in Manila and with the support from the Philippine Embassy in Ottawa and Philippine Consulate in Toronto. The Philippine delegation was headed by Energy UnderSecretary Sharon Garin and Science UnderSecretary Leah Buendia. Other participants were from other agencies, domestic energy players and some are from the media, myself included. The local media joined only the Toronto leg from March 6-8.

My main interest is how expansion in electricity production including nuclear power generation would affect economic performance of countries as measured by their GDP growth. So I checked the excel files from the Energy Institute’s Statistical Review of World Energy 2023 for electricity generation, and the IMF World Economic Outlook 2023 database for GDP growth.

From 2018 to 2022, the average growth in power generation and GDP growth respectively of these Asian countries were as follows: Vietnam (6.3 and 5.7 percent), China (6.1 and 5.3 percent, Bangladesh (5.8 and 6.5 percent), Indonesia (5.6 and 3.4 percent), India (4.9 and 4.2 percent), Philippines (4.0 and 3.2 percent) and Malaysia (2.7 and 3.1 percent). 

Then Singapore (1.8 and 2.7 percent), South Korea (1.5 and 2.3 percent), Taiwan (1.3 and 3.6 percent), Thailand (0.5 and 0.9 percent) and Japan (-0.1 percent for both).

So there is clear correlation between fast growth in power generation and fast GDP growth, and vice versa. Of course there are many other factors affecting a country’s economic performance and electricity production is one of them but it seems to be a strong factor or determinant.

The average increase or increment in power generation expressed in terawatt-hours (1 TWH = 1 million MWH) from 2018 to 2022 were as follows: Vietnam 13.7 TWH/year, Malaysia 4.5 TWH/year, Philippines 4.0 TWH/year, Singapore 1.0 TWH/year, Thailand 0.7 TWH/year.

Now that the Philippines economy is growing fast, 5.6 percent in 2023 and targeted to grow by six percent to seven percent from 2024 to 2028, I believe our power generation should increase by six to seven TWH/year from 2024 to 2028, and eight to 10 TWH/year from 2029 onwards. If the increase in electricity production remains at four to five TWH/year, the target six to seven percent GDP growth will not be attained as there will be regular blackout.

Electricity generation growth from coal is now limited because new or “greenfield” coal plants have been prohibited since 2018, only “brownfield” coal plants on existing complexes are allowed. Power generation from natural gas (LNG) will increase but it will not be enough. And generation from intermittent wind-solar will definitely be insufficient because in 2022, their total generation was only 2.9 TWH and their annual increase is only about 0.4 TWH/year.

So the Philippines must learn to embrace nuclear power in the grid to avoid regular blackout in the coming years and avoid growth deceleration if not contraction. From our visit at McMaster University nuclear reactor right in the middle of the campus, then a visit inside the mock up reactor and bus tour outside Darlington nuclear plants owned by Ontario Power Generation (OPG), I am further convinced that nuclear energy is safe, stable, reliable and cheap. 

For instance, a 20-gram uranium pellet has the energy equivalent of 400 kilos of coal, or 410 liters of oil, or 350 cubic meters of natural gas. Twenty grams means 0.02 kilogram, or 1/23 of one pound. The current price of uranium is $94/pound or P5,264/pound or only around P229/pellet and it has the equivalent energy of 410 liters of oil already.

I asked three of the participants who started their nuclear energy meetings since March 4, I got these wonderful feedback and observations.

Energy Regulatory Commission (ERC) Chairperson Monalisa Dimalanta said, “I had a good discussion with the Chief Commissioner of the Ontario Energy Board on the challenges regulators face with the evolving energy systems. Interesting to learn how the inclusion of nuclear power in Ontario’s supply mix has become critical in enabling the province to address the issue of energy affordability. The adoption of digital solutions - changing the way we do our work as regulators - is central to the timely and efficient delivery of public service.”

Meralco first vice president and head of Networks Froilan Savet said, 

“Assuming that the relevant policies and regulatory framework are already in place, and with infrastructure challenges/issues already resolved, I see a significant opportunity for adopting Small Modular Reactors (SMRs) and Micro Modular Reactors (MMRs). These technologies promise enhanced safety, scalability, and flexibility, making them ideal for both grid-connected and remote applications. The deployment of MMRs is particularly promising, offering cost-effective integration into medium-voltage distribution system and ensuring reliable power.”

Aboitiz Power Corporation head of Energy Transition Projects Felino Bernardo observed that “A nuclear energy program should be depoliticized and be governed by clear and consistent regulatory policies that holistically understands the ins and outs of the technology and its market. This is about comprehending the life of a nuclear power plant, with its high upfront costs but low operating costs, as well as its sensitivity to interest rates and delays. Plus  the logistics and maintenance of safety…. We hope to replicate the success of Ontario, which has one of the world’s cleanest grids that generates low-cost electricity thanks in large part to the dominance of nuclear energy in its power mix at 60%. Through our friends in Bruce Power, we are now more aware of the deliberate and careful planning at each development stage that precedes such success. This includes early stakeholder engagement, the identification of risks and mitigations, and the establishment of an environment of transparency.”

Great points, madame chair and gentlemen. You completed my economic understanding of nuclear energy with your engineering and regulatory perspectives.

I thank the Canada government for organizing that wonderful and educational tour, site visits and meetings with many Canada government officials, corporate and academic leaders. And I am hopeful that Philippine government energy, science and regulatory officials, companies like Meralco and Aboitiz Power, are now more inspired to develop nuclear energy in the future – for  our country’s modernization and prosperity.

Bienvenido Oplas Jr. is a free market advocate and columnist of BusinessWorld. For comments email at minimalgovernment@gmail.com

See also: 
PhilStar 3, On endless wars, endless welfare and public debt, October 18, 2023
PhilStar 4, What to expect from Sec. Ralph Recto leadership at DOF, January 16, 2024

Saturday, April 06, 2024

BWorld 693, On Earth Hour, Lenten travel, and Pinoys in Toronto

On Earth Hour, Lenten travel, and Pinoys in Toronto
March 26, 2024 | 12:02 am

My Cup Of Liberty
By Bienvenido S. Oplas, Jr.

As it is Holy Week, I will briefly cover four light topics to adjust to slow/non-work mode of most people.


Last Saturday evening saw the annual celebration of “Earth Hour” where people shut off their lights for an hour. This is practiced in many cities around the world to help “save the planet.” How effectively was it done in the Philippines? I checked the data in the daily operations report of the Independent Electricity Market Operator of the Philippines (IEMOP). The decline in electricity use between 8:30-9:30 p.m. was mainly because people were going to sleep, which one deduces since the electricity use did not increase after 9:30 p.m. In the Luzon to Visayas to Mindanao grids (see Table 1).

That day, March 23, the electricity generation mix was: coal 67.5%, natural gas 13.3%, geothermal 9.3%, hydro 4.8%, solar + wind + biomass 4.3% combined.

So, it was a double dud for the Earth Hour campaign. First, people slowly turned off their lights to sleep not to celebrate darkness, and, second, the energy source that Earth Hour campaigners demonize, coal, provided two-thirds (68%) of the total power generation while their beloved energy sources provided less than 5% of the total. The Earth Hour narrative is a juvenile concern that businesses and the public generally ignore.


The regular traffic congestion in Metro Manila will be absent this week and instead transfer to the provinces as millions of people move around.

There were 13.9 million registered vehicles in the Philippines in 2022, 8.5 million of which were motorcycles (MCs), tricycles, and non-conventional MCs. There are two million cars and SUVs. The bulk of those 13.9 million vehicles are found in four big regions — Metro Manila, Region 4-A (Calabarzon), Region 3 (Central Luzon), and Region 7 (Central Visayas) — for a combined 8 million vehicles (see Table 2).

The big challenge in transportation reform is how to reduce the number of small passenger vehicles like MCs and tricycles, whether gasoline or electric. Most provincial roads now are four lanes wide, two lanes each way, with the inner lanes for overtaking or as the fast lane. The majority of tricycles in the provinces stay on the inner lane, forcing cars and other vehicles to overtake on the outer lane, which is dangerous as they travel fast and there are houses, parked vehicles, people, and dogs just one to two meters away.

Local government units (LGUs) are the ones that register, regulate (by issuing local route franchise), and monitor the tricycles. They plus the police should penalize the drivers of these tricycles but they are not doing their job.


When I went to Toronto early this month (my first time to set foot in Canada), I noticed there were many Filipinos there — at the Toronto Pearson airport, at the Novotel North York where we stayed at, at the nearby Tim Hortons coffee shop, at other food shops.

After three days of work — meetings and site visits as part of the Philippines Nuclear Trade Mission to Canada — two Filipino friends toured me around other parts of the big city.

Ulysses “Uly” Veloso is my friend from the Congress Mountaineers, from back when I was working at the House of Representatives in the 1990s. Along with our buddies, we climbed many mountains, including a Mt. Pinatubo traverse climb in 1994, which started from Pampanga to the volcano crater and then exited at Zambales, a trek of six days and five nights.

Uly was an Arts and Design professor at the College of St. Benilde in Manila, with part-time video production and professional sculptor business. Ten years ago, he migrated to Toronto with his only son, Ulap, who is the same age as my older daughter. Uly is now a Lead Artist at a custom art and architectural fabrication company in Toronto. He took me to a big beer and liquor store near his place. I was amazed at the wide variety of products from Canada and abroad. I think less than 10% of those beer brands are available in Manila.

Among the things he likes in Canada are the higher skills and knowledge of the people, that arts technology and programs are comparatively cheap, and that their high school students already gain the sort of experience that are available only to university students and graduates in the Philippines. Arts workshops are freely available almost anywhere.

All this plus social and financial security, a justice system that works to protect one’s properties, and extensive and good road infrastructure. Taxes are high but people enjoy the benefits. About 80% of the people there are polite and friendly.

Another friend, May Tabujara, and her hubby toured me around another side of Toronto near the big Lake Ontario. May works as a cosmetic/oculoplastic surgery professional in a private hospital in Toronto. She has been living there since 2008. She admires the social and financial security, the infrastructure in Canada, but is a bit wary of the rising incidence of car theft and a big influx of non-vetted immigrants.


I want to mention two Filipinas with clean hearts, among so many here.

First is Dr. Ma. Judea “Dea” Millora, my “kinakapatid” or non-blood related sibling. Ate Dea is my free one-text-away physician. She is an integrative medicine practitioner. I was able to discontinue my personal HMO for several years now with her help. If I feel unwell, she will sometimes request certain laboratory tests and I show her the results, or she would give me some proven medications and maintenance meds for a few months. My daughters would occasionally consult her too.

Ate Dea and family own a large agro-forestry farm in Pangasinan which is planted with mangoes, and industrial and endemic forest trees. The rest is grassland. They have considered me their kinakapatid since the 1980s when their younger brother, and my best friend in UP, Mil Millora, died in a car accident in 1986. I have helped monitor their farm since 1992 and I like it. I am not paid to do this, I like doing it — to visit a large piece of land and make certain improvements there, getting my hands dirty touching the soil and trees.

Ate Dea is a cancer survivor and has slowly moved towards a cancer specialization combining modern medicine and lifestyle and diet changes. She likes doing it and would charge poor patients little, especially those in regular severe pain. She is a devote Christian and never compromises her church duties with professional and family duties. A thousand blessings to her.

Another exemplary Filipina is Nina Bantoto, daughter of my friend from the University of the Philippines School of Economics, Arlene Bantoto. Nina has autism, diagnosed when she was three years old. She struggled to speak and could not fully express herself. But what she lacked in verbal articulation, she more than made up for with her immense talent in drawing, sketching, and painting.

Now 27 years old, she has created masterpieces of color and is an international artist who has held several exhibits in Manila and Macau, and at the United Nations and at the Philippine consulate in New York. In 2017, she was part of a select group of featured artists with autism to represent the country in the United Nations in celebration of World Autism Day in New York. In 2018, she held her first solo exhibit, Chiquitita, with a portion of the proceeds donated to REACH foundation, a nonprofit organization dedicated to helping Persons with Disabilities from depressed communities.

Last February she held her second solo exhibit, titled Enter the Dragon, about Chinese Zodiac animals, at the prestigious Galerie Joaquin at the Podium Mall in Mandaluyong City. Part of the proceeds were again donated to the REACH foundation. More blessings to you, Nina.

See also:
BWorld 690, Why we need to grow by 8-9% yearly
BWorld 691, On a huge budget surplus and long-term privatization revenues
BWorld 692, 10 lessons from the PHL Nuclear Trade Mission to Canada

Climate 107, Sea ice melt-grow cycle, storms strong-weak cycle, COP meetings

Yesterday I posted these two sets of charts in the viber group Oplas Perspectives.

So there is NO catastrophic ice melt that will swamp low-lying cities and countries, only natural cycle of ice melt-grow yearly, every single year for the past centuries and millions of years.

There is NO catastrophic increase in number of storms, nor storms getting stronger and more extreme. Then ALL the climate alarmism spending proposals by the UN and all multilaterals are fake and corrupt. ALL those subsidies and favoritism for wind solar "to save the planet" are fake. See how they want to fleece trillions of $ from taxpayers and the public worldwide.





And about the annual big UN climate meetings, the Conference of Parties (COP), in the climate meeting last Nov-Dec, 

"Some 85,000 participants attended COP28..."

That's from UN FCCC itself. Out of 85,000, possibly 5,000 from UAE itself, so 80,000 people from around the world flew on fossil fuels then lambast fossil fuels :-) And that's for the actual meeting, do  not include many preparation meetings per segment of the conference involving thousands of people meeting f2f. And that's for COP 28 only. 

"COP27 brought together more than 45,000 participants..."

Excluding preparation meetings for COP 27 alone. And COP 26, COP 25, etc.
Blame everyone else for high C02 emissions but never never themselves.

See also:
Climate 104, Global boiling, wow, September 04, 2023
Climate 105, On COP 28, $1 trillion loss-damage fund, ESG, November 30, 2023
Climate 106, Triple-dip La Nina and El Nino 2023-2024, March 07, 2024

Friday, April 05, 2024

BWorld 692, 10 lessons from the PHL Nuclear Trade Mission to Canada

10 lessons from the PHL Nuclear Trade Mission to Canada
March 21, 2024 | 12:02 am

My Cup Of Liberty
By Bienvenido S. Oplas, Jr.

This is a sequel to this column’s March 12 piece “Nuclear energy to sustain Philippines’ high economic growth.” Here I summarize the main lessons from my observations as a participant of the Philippines Nuclear Trade Mission to Canada, Toronto leg which was held on March 6-8.

1. We learned that a small nuclear reactor right inside a university campus is not scary or risky. We visited the McMaster University Nuclear Reactor, which was built in 1957. We went inside the structure, saw the staff working there and the uranium fuel bundle at work several meters underwater. The reactor produces electricity plus medical and industrial isotopes for healthcare, radiography and imaging like those in airport X-ray machines.

2. We learned that a mock-up reactor is very useful for public education and training staff in real reactor plants. We visited the Darlington Energy Complex (DEC) owned and operated by Ontario Power Generation (OPG). We went inside a big CANDU (Canada Deutrerium-Uranium) mockup reactor, not a real nuclear plant, which contains all the chambers and important components of a nuclear plant.

3. We learned that Canada’s biggest nuclear power company can energize 42% of the entire Philippines. We visited Bruce Power in their office in downtown Toronto. They have eight CANDU reactors that can produce up to 48 Terawatt-hour (TWh) of electricity in a year, equivalent to 42% of the Philippines’ total generation of 114 TWh in 2022. If we include OPG’s Darlington nuclear generating station with four CANDU reactors that can produce up to 31 TWh of electricity in a year, their combined output up to 79 TWh is 69% of the Philippines’ total electricity production.

4. We learned that the selection of the site of nuclear plants is important. We met the New Brunswick Nuclear team, composed of Opportunities New Brunswick (ONB), New Brunswick Electric Power Corp. (NB Power), and ARC Clean Technology Canada (ARC Canada). They discussed their advanced small modular reactors (SMRs) which are deployed in off-grid island-communities and far away mining operations, and the siting of their SMRs in domains inhabited by indigenous people and how they are able to secure their social acceptance.

5. We learned that the regulatory framework, standards, and protocols on safety and future nuclear waste must be stable. Business uncertainty can occur here so regulation must be simple, transparent, stable, and effectively implemented. This includes whether to do long technology review and licensing, or just relicense imported reactors.

6. We learned that we can expand domestic nuclear manpower expertise via partnerships with nuclear-centered universities abroad. Meralco, for instance, is firming up a partnership with Canada’s OntarioTech University. Other Canadian and US universities, even Korean and Japanese universities, can provide this training too.

7. We learned that the Bataan Nuclear Power Plant (BNPP) can be refurbished and start operation in about four years. We met experienced engineers and scientists from DB2 Consulting, Inc. who also comprise the Philippine Nuclear Services (PNS). They estimate that a full assessment and refurbishment of BNPP can be done in four years, so if the government will allow it, refurbishment can start this year and BNPP can start operation by 2028, generating about 4.6 TWh/year (assuming 85% capacity factor). This is much more than the combined output of wind, solar, and biomass of 4.2 TWh in 2022.

8. We learned that three Philippine energy companies can start nuclear power development in the country. Aboitiz Power Corp., Meralco, and Prime Metro BMC sent their executives to participate in the trip to Canada and have expressed willingness to develop nuclear power in the country. Felino Bernardo, Head of Energy Transition Projects of Aboitiz Power, said that “the mission of delivering stable, reliable, clean, and affordable electricity to power businesses and communities and get people out of poverty should be a human endeavor that surpasses nationalities and geographical divides.”

9. We learned that more countries are turning to nuclear energy and Philippines might be left in a tight space. Doug Burton, President of DB2 Consulting, told me that he mentors the head of global marketing of an Asian energy company and that official told him that his company is bidding to build nuclear plants in 12 of 27 European countries, plus bidding in Canada for the Bruce C nuclear plant. Reactor vendors have limited resources so the Philippines may find itself in tight spot when it comes to vendors if it hesitates too long.

10. We learned that Canada is a Tier 1 nuclear power country and can be a good source for the Philippines’ future nuclear power development. Canada has a wide and long spectrum of capabilities and resources in the nuclear supply chain, from uranium mining and research to power generation and production of medical isotopes. They have exported their uranium fueled CANDU pressurized heavy water reactors to several countries, and are developing several designs and models of SMRs and micro modular reactors (MMRs).


The National Grid Corp. of the Philippines (NGCP) recently released “Customer Bulletin 2024-14” and it showed a huge increase in their transmission charge for the February 2024 billing compared to January 2024. NGCP attributed this to their new Ancillary Service Procurement Agreement (ASPA). This is a nationwide electricity price hike, a long-term price hike. I computed the price increase from January to February — it is a P0.39/kWh increase nationwide, and that is huge (see the table).

The implementation of the reserves market cannot be blamed for the price hike. This is the first time that the prescribed ancillary service (AS) levels were scheduled after the reliability and stability of the grid suffered for years because the NGCP did not make enough long-term AS contracts. It seems that NGCP waited for many battery energy storage systems (BESS) to be ready first before it would make a long-term AS contract.

My hypothesis as to why the AS cost jumped so high is because now the NGCP contracted many BESS — big and expensive batteries — to address power fluctuations from intermittent wind-solar power. So, I checked the numbers from the Independent Electricity Market Operator of the Philippines’ (IEMOP) monthly Market Highlights.

It seems my hypothesis is correct. Luzon has the biggest BESS and pump storage capacity at 1,050 MW and it has the biggest jump in transmission charge. So now consumers will pay higher electricity prices for many years to come for what? Unreliable service in grid stability because of a reliance on BESS in order to “save the planet”?

Still a big question about the reliability of the grid is why the contracts for contingency reserves are still low. Is the BESS also prioritized in contract approvals with uncapped price vs other non-BESS with capped price?

See also:
BWorld 689, Nuclear energy to sustain Philippines’ high economic growth
BWorld 690, Why we need to grow by 8-9% yearly
BWorld 691, On a huge budget surplus and long-term privatization revenues

Deindustrialization 25, UK bankruptcies, closure of Port Talbot, Net Zero deception

I posted this the other day in "Oplas Perspectives" viber group.

As I often say, when other people self destruct, we should not interrupt. Climate agenda, net zero and decarbonization goals sinking the UK. Expensive energy, many manufacturing plants fleeing UK. Plus high cost of illegal immigration. Plus billions sent to Ukraine. 

UK officials should be ashamed of what they have done to their own economy.  They should sulk in one corner and reflect the damage they have done, instead of lecturing many developing countries aspiring to industrialize that they should follow UK deindustrialization.

Meanwhile, enjoy these reports.

1. French ‘rubbing their hands’ as Britain forced to import £1.5bn of electricity
UK buys a record amount of power from Europe as wind and solar fall short
Jonathan Leake 19 January 2024

2. Port Talbot has been sacrificed to the angry god of net zero
Its workers had good jobs producing steel. Now a whole community has been left with nothing
ALLISON PEARSON 19 January 2024

3. The madness of the Port Talbot closures
Ross Clark 19 January 2024

True, there will be 2,800 job losses, and it won’t actually reduce global emissions – in fact, it will probably increase them... today’s announcement that Tata Steel is to close its two blast furnaces in Port Talbot...

4. Tata Steel has exposed the great net zero delusion
Port Talbot is just the start – the green agenda could soon drive our economy into the ground
MATTHEW LYNN 19 January 2024 

5. Port Talbot is a victim of net zero madness
Steel manufacturing has been devastated by high energy prices. Now it is being further diminished
TELEGRAPH VIEW 21 January 2024 

6. Senior Tories have blasted 'Trojan Horse' Net Zero green agenda after Tata Steel announced it is axing 2,500 jobs at its Port Talbot steelworks in a bid to reduce emissions
Government paid £500million of taxpayers' money to the Indian owners of Tata
By GLEN OWEN  21 January 2024

7. Two million “will disconnect from energy” this winter because they can’t afford to top up, Citizens Advice warns
By Alban Thurston -January 23, 2024

8. British households paying most for their energy
UK prices rise fastest among developed countries as utility companies hand record payouts to shareholders
Jonathan Leake 24 January 2024

9. Revelation That U.K. Climate Target is Based on One Windy Year’s Data Threatens to Unravel Net Zero Credibility

10. More Revelations Emerge of How the Climate Change Committee Dupes Parliament into Voting for Net Zero Measures

11. UK Climate Change Committee Misled Parliament on Net Zero Measures
Estimations on wind energy storage were based on a single year of weather data.
Bridget Ryder — January 29, 2024

12. BP attacked by investor over ‘irrational’ switch to clean energy
Oil giant is accused of leaving shareholders £40bn poorer with unrealistic strategy
Matt Oliver 29 January 2024 

13. The Folly Of Climate Leadership
Tilak Doshi. Jan 29, 2024

See also:
Deindustrialization 22, EVs impracticality, Energizing growth series, December 19, 2023
Deindustrialization 23, Germany economic decline, January 14, 2024
Deindustrialization 24, UK and Germany degrowth and high food inflation, February 10, 2024

Saturday, March 23, 2024

BWorld 691, On a huge budget surplus and long-term privatization revenues

On a huge budget surplus and long-term privatization revenues
March 19, 2024 | 12:02 am

My Cup Of Liberty
By Bienvenido S. Oplas, Jr.

A number of good economic reports came out last week. See for instance these stories in BusinessWorld: “US firms to invest over $1B in PHL” (March 12), “PHL secures $4B in German pledges” (March 14), “Philippines’ budget surplus at $1.58B in January” (March 15), “PHL to grow 6.4% this year — Fitch” (March 15), and “GOCC subsidies down in 2023, PhilHealth top recipient” (March 17).

I checked the Bureau of the Treasury (BTr) data on the latest cash operations report (COR) of the National Government. The January 2024 data showed that the National Government (NG) experienced a budget surplus of P88 billion. That is huge. So I checked the January data of previous years — turns out that this year’s budget surplus could possibly be an all-time high and almost twice the surplus of P46 billion in January 2023.

This is largely because revenues have expanded big time, from P278 billion in January 2022 to P348 billion in January 2023 to P422 billion in January 2024. Meanwhile, government expenditures were timid at P302 billion in January 2023 to P334 billion in January 2024.

Financing or borrowing was significantly controlled, from P587 billion in January 2021 and P366 billion in January 2023, to only P118 billion in January 2024 (see Table 1).

I must extend my congratulations to Budget Secretary Amenah F. Pangandaman and Finance Secretary Ralph G. Recto. The fiscal consolidation policies are bearing fruit so far.

The rate of increase in revenues, even without a major tax hike, should stay higher than the rate of increase in expenditures. Public spending should be targeted at expanding and better infrastructure, like more provincial and barangay roads than cash subsidies. Rural infrastructure will encourage the poor to be more productive while endless subsidies will encourage more people to not work hard enough or understate their real incomes so that they can qualify for many subsidies and freebies like free tertiary education, free healthcare, free monthly cash, and so on.

One big piece of news last week was reported in the Philippine Star: “Recto revives plan to sell NAIA assets” (March 14). At the sideline of his Senate confirmation hearing last week, on March 13, Mr. Recto said that he wants to get a huge one-time revenue bump from the privatization of the assets of the Ninoy Aquino International Airport (NAIA). A brilliant and rational proposal, sir.

This column has argued in three previous articles that NAIA assets should be privatized: “NAIA privatization is good, legislated minimum wage is bad” (Feb. 20, 2024), “Financing sustained growth: NAIA privatization” (June 27, 2023), and, “NAIA closure, passenger rights, and MIAA responsibilities” (Aug. 21, 2018).

If I may add, also consider privatizing the land holdings of the Bilibid Prison in Muntinlupa City, and the Iwahig Prison in Palawan, Puerto Princesa — get the money and retire a big portion of the public debt, do not earmark it for any agency or program.

In Table 2, I attempted to quantify the potential revenue from the privatization of three government assets (NAIA, Bilibid, and Iwahig). I assumed a compounded annual growth rate (CAGR) of 10% yearly in the value of these lands. The potential revenues from the privatization of NAIA and Bilibid land would be P8.38 trillion, plus P3.81 trillion or P12.19 trillion (see Table 2).

The New Manila (Bulacan) International Airport is supposed to start initial operations by 2027 and should be fully operational by the early 2030s. So, the closure of the current NAIA is feasible and viable.

Bilibid Prison operations should be decentralized and scattered to various regions. Selling the land will help bankroll the construction of new prisons and correctional facilities in all regions of the country.

The Iwahig Penal colony is composed of four zones or districts. The central colony is made up of 14,700 hectares and there are three other zones: Sta. Lucia with 9,685 hectares, Montible with 8,000 hectares, and Inagawan with 13,000 hectares. Existing inmates of the penal colony can be moved to any of these zones.

Less public debt and lower interest payments (P429 billion in 2021, P503 billion in 2022, and P628 billion in 2023, with principal amortization not included yet) would mean that more resources can be devoted to more physical and social infrastructure for Filipinos and Philippines-based businesses and foreign investors and visitors.

Meanwhile, I want to congratulate my friends and fellow University of the Philippines School of Economics alumni, new Finance Undersecretaries Joven Balbosa and Rolly Tungpalan. Their appointments were approved by the President last week.

See also:
BWorld 688, On the nuclear mission in Canada, the AP-MGen-SMC partnership, and electric cooperatives
BWorld 689, Nuclear energy to sustain Philippines’ high economic growth
BWorld 690, Why we need to grow by 8-9% yearly

Macroecon 25, Realistic growth and revenue target

A report today in the Inquirer, "Recto seeks ‘more realistic’ growth target",  https://business.inquirer.net/451423/recto-seeks-more-realistic-growth-target. Secretary Recto said,

“I think we should come out with something more realistic— not only this year, but for the medium term. Because if you project a very high GDP, then you’re projecting a very high revenue. And if you miss it, your deficit will increase and your debt-to-GDP [ratio] will also increase. Underpromise and overdeliver. That's what I believe."

"Underpromise and overdeliver" is a wise move. A 6.0 to 6.5% target is more realistic than 6.5 to 7.5%. Although I believe that a 7-8% growth is possible because of our huge domestic market that can provide internal econ dynamism, provided that the usual obstacles -- business bureaucracies and red tape, corruption -- can be reduced.

Notice that the fast-growing economies in 2023 -- IN, Iran, PH, CN, ID, VN, etc -- are all big population countries except Malaysia. Their big population is an asset, not liability as peddled by the population control advocates like the authors and campaigners of RH law. More people means more workers and entrepreneurs, more producers and consumers.

Iran and China high growth 2023 was mainly due to low-base in 2022 whereas India, PH, Indon, VN  were high growth 2023 on already high base 2022.
Below, the 3 columns are GDP growth for 2021, 2022 and 2023. 

See the Europeans -- save the planet, ESG, net zero, decarbonization, climate drama, plus endless war in Ukraine is beautiful no negotiations -- degrowth and deindustrialization trend is clear. PH and other Asian economies should never never follow the European path.

Again the 3 columns are GDP growth 2021, 2022, 2023.

WEF planet-saving, jet-setting corporate leaders are bullish about the PH, said PH GDP size (they should refer to PPP values) can become "a $2-trillion (around P112-trillion) economy in the coming decade" https://www.bworldonline.com/top-stories/2024/03/20/583012/wef-very-bullish-on-phl-economy/.

In 2023, PH GDP size at PPP (purchasing power parity) was around $1.279 trillion. If PH will grow at sustained 6% yearly, our GDP size PPP will reach $2.039 trillion by 2031, or just 7 years from now.

I just wonder why these jet-setting, high fossil fuel-using but fossil fuel-lambasting and net zero-campaigning corporate guys would push their failed decarbonization experiment in Europe to be applied in the PH and other emerging markets.

See also:
Macroecon 22, Econ performance of Marcos Jr administration in year one, July 30, 2023
Macroecon 23, GDP forecasting and the forecasters, February 01, 2024
Macroecon 24, Sir Gary Teves' proposals to reduce public debt, March 09, 2024

Friday, March 22, 2024

BWorld 690, Why we need to grow by 8-9% yearly

Why we need to grow by 8-9% yearly
March 14, 2024 | 12:01 am

My Cup Of Liberty
By Bienvenido S. Oplas, Jr. 

The Development Budget Coordination Committee (DBCC) is considering revising the Philippines’ annual growth target until 2024, from 6.5% to 7.5%, down to 6-7%. I think this is a practical adjustment because the global and regional economic environment is deteriorating, not improving, as shown by the generally lower growth of countries in 2023 compared to 2022, and with high inflation persisting in many countries this year.

I updated my table monitoring the GDP growth of major economies in the world, those with a GDP of at least $700 billion in purchasing power parity (PPP) values projected for 2023. Several countries were not included because there was either no GDP data or it was incomplete. These countries are Bangladesh, Pakistan, and the United Arab Emirates.

Some countries revised their quarterly growth data for 2023. Still, the Philippines remained the third fastest growing country after India and Iran. And our growth of 5.6% in 2023 is high over  a high base in 2022.

Practically all European economies except Turkey and Spain were crawling at 0.1% to 1.5% growth. Some were contracting — Germany and Ireland (see Table 1).

The good thing for us is that our economic growth rate is faster than that of many other countries in the world. The bad thing is that our economic base, our GDP size, is still “small.” Our projected GDP size of $1.28 trillion in 2023 is smaller than those of Thailand, Vietnam, and Taiwan and they have smaller populations than we do.

We actually need to grow 8-9% yearly for at least a decade to drastically expand our economy — our roads and physical infrastructure, both toll roads and rail, our power supply and electricity generation capacity, and so on.

Our frequent heavy traffic is an indicator that there are not enough roads despite the expansion of new toll roads. Our high electricity prices are an indicator that the power supply is not enough despite the favoritism in fiscal incentives and priority dispatch for intermittent renewables.

Assuming we can grow at 8.5% yearly from 2024-2034, the Philippines’ GDP size at PPP values would rise from $1.28 trillion in 2023 to $3.14 trillion in 2032, or at the level of Italy or South Korea in 2023.

I went to Hong Kong last January, then Toronto, Canada last week, and I observed their road infrastructures. I estimate that it would take us at least 40-50 years of steady infrastructure modernization to be at their level now in 2024. Traffic congestion is an engineering problem with engineering solutions, not bureaucratic solutions like hiring thousands of “traffic enforcers.”

Engineering plus the enforcement of the rule of law. The law applies equally to unequal people. No one is exempted and no one can grant an exemption. The law should apply to both governors and governed, both administrators and administered, both government officials and ordinary people.

Here’s hoping for continued growth and prosperity for our country and our people.

See also:
BWorld 687, High budget deficit and wage subsidy
BWorld 688, On the nuclear mission in Canada, the AP-MGen-SMC partnership, and electric cooperatives
BWorld 689, Nuclear energy to sustain Philippines’ high economic growth

Transport Econ 25, Traffic congestion is an engineering problem with eng'g solutions

I find this argument from the Management Association of the Phils. (MAP) funny.

Calamity declaration needed to deal with road congestion — MAP
March 21, 2024 | 9:07 pm 

"He (Eduardo Yap, MAP) added that electric vehicles (EVs) should be encouraged through incentives and that public buses on the EDSA Busway be progressively converted to electric power.
Exempting private EVs from road congestion charges..."

Awww. These business leaders are only interested in pushing the EV business, not in "solving" heavy traffic congestion. Traffic is an engineering problem with engineering solutions, not bureaucratic or cronyism solutions.

HK should be traffic-choke. So many people and visitors/tourists (about 25 million/year pre-lockdown dictatorship) in few flat lands including reclaimed and artificial lands as HK is largely mountainous. Yet little congestion. Lots of trains, about 200 meters long each and can accommodate hundreds of passengers each trip. And the trains leave every 5-10 minutes. 

Photos below I took when I and my family were in HK last January.

And many bridges, long tall sturdy bridges connecting islands. Within the city there are many overpass, underpass, tunnels for vehicles. These are all engineering solutions. 

You hardly see a "traffic enforcer" on the roads or bridges or tunnels. In the PH we have so many "traffic enforcers", bureaucratic solutions that hardly work.

Now MAP and Eduardo Yap want to introduce another non-engineering solution -- EV cronyism, plus declaration of "traffic calamity." Ewww. Nasaan ang eng'g solution dyan?

Yes, city trains should run on electricity, whether above ground like our MRT/LRT or subway.  Not cars running on electricity. And train stations should be right in commercial centers and bus stops, not 200-300 meters away then make the public walk far. 

Underground walkways between train stations, shops.

Walkalator underground, HK Central station. Just like an airport.

By 2029, the Metro Manila subway system -- 33 kms long with 17 stations from Valenzuela to Bicutan and a spur line to Terminal 3 of NAIA -- will start operation. It will be the first modern subway system in this country. Long trains running on electricity.  And we'll be needing huge new supply of electricity, those that produce power 24/7, even if the Sun is not shining (night, cloudy, rains) and even if the wind is not blowing, zero blackout or power fluctuation even for a minute. 

Subway trains and their stations are very energy intensive. Intermittent wind solar cannot provide reliable power. Only thermal plants (coal, gas, oil, geo), big hydro, or nuclear.

See also:
Transport Econ 22, Uber's merger with Grab, April 04, 2018
Transport Econ 23, Penalizing commuters with far away bus/LRT stops, February 12, 2020
Transport Econ 24, Trains, tricycles and government-created route monopolies, March 16, 2024

Tuesday, March 19, 2024

BWorld 689, Nuclear energy to sustain Philippines’ high economic growth

Nuclear energy to sustain Philippines’ high economic growth
March 12, 2024 | 12:02 am

My Cup Of Liberty
By Bienvenido S. Oplas, Jr.

TORONTO — The Philippines’ Nuclear Trade Mission to Canada ended the three-day Toronto leg last Friday, March 8. It was a very educational tour filled with meetings for me and other Philippine participants, headed by Energy Undersecretary Sharon Garin and Science Undersecretary Leah Buendia.

On those three days, we saw the McMaster University Nuclear Reactor, we went inside the research reactor that provides neutrons for medical isotopes, imaging service, and power generation (five megawatts), and many other services. The reactor is in the middle of the sprawling university and students, staff, and visitors casually walk outside it without fear or alarm.

We also visited a big CANDU (Canada Deuterium-Uranium) mock-up reactor — not a real nuclear plant but containing all the basic components and various chambers — owned by Ontario Power Generation (OPG). OPG owns and operates the Darlington nuclear generating station, four CANDU reactors that can produce up to 31 terawatt-hours (TWH). This is almost one third of the Philippines’ total power generation of 114 TWH nationwide in 2022.

The top corporate leaders of Bruce Power, the biggest operating nuclear power company in North America, met us in their office in downtown Toronto. Their eight CANDU reactors can produce up to 48 TWH of electricity yearly, or 42% of total Philippine power generation in 2022.

If our Bataan Nuclear Power Plant (BNPP) had been allowed to operate and not killed by politics and health alarmism in 1986, it could have generated about 4.6 TWH/year (assuming 85% capacity factor) for the past 38 years. This is much larger than the output of wind + solar of 2.9 TWH combined in 2022.

As a developing country, we need to overcome our perennial low power generation and low reserves margin relative to demand, which leads to high electricity prices. I checked again the power generation of several countries and compared it with their economic performance over a seven-year period, 2016-2022. I grouped the countries into three: Group A are the G7 industrial countries, Group B are the major East Asian economies, and Group C are the major South Asian countries.

The G7 is characterized by low, if not contracting, power generation and low GDP growth of between 0.2% (Japan) to 2.1% (US). The East Asian and South Asian countries are characterized by high growth in power generation and high GDP growth, except for Thailand (see the table).

The Philippines’ average yearly growth of 4.9% in power generation was equivalent to a 4 TWH/year increase, and our GDP was growing at an average of 4.3% yearly average. In 2023, we grew at 5.6%, and the increase in power generation could be at least 5 TWH. And since the government targets growth of 6-7% yearly from 2024-2028, I strongly believe that we should produce 6-7 TWH/year of power, otherwise the growth target will not be attained due to blackouts, with supply unable to meet high demand.

Meaning if we produce only 5-6 TWH/year of power, our economy will grow only at the 5-6% range. We actually need to grow 8% yearly through the next decade if we want to, a.) drastically reduce poverty, and, b.) reduce the public debt/GDP ratio from the current 62% to 50% or less. The denominator, GDP size, must grow at a high level and be sustained for a decade or more, for us to attain those two big social and economic goals.

I am flying back to Manila in several hours. Yesterday I asked Energy Undersecretary Sharon Garin about the major lessons from this nuclear trade mission. She said that, “The Canadian Embassy has graciously given us an opportunity to comprehensively understand the core competencies of Canada in nuclear power development. Canadians have completed nuclear power plants in time or ahead of schedule, these are competencies we hope to develop in the Philippines. The Philippine Nuclear Energy Program Inter-Agency Committee will likely pursue more targeted and responsive joint activities with Canada in the near future. It is one of the few countries [with whom] we already have an existing bilateral agreement on nuclear energy.”

I also talked to two fellow participants who are local energy players and have expressed explicit interest in developing nuclear power in the country soon.

Meralco’s First Vice-President and Head of Networks, Froilan “Froi” Savet, said that “the Philippines can establish a robust regulatory framework similar to that of the Canadian Nuclear Safety Commission (CNSC) to ensure safe and secure operation of its to-be nuclear facilities. [A] possible Memorandum of Understanding (MoU) with premier academic institutions like Ontario Tech and McMaster University where we could send qualified students on scholarships to study nuclear engineering.”

Aboitiz Power Corp.’s Head of Energy Transition Projects, Felino “Lino” Bernardo, seconded Mr. Savet’s observation, saying that: “In the near to medium term, the Philippine government should first enact enabling policies that would, among others, signal support to those in the power generation sector and enable a seamless but rational allocation of resources. Likewise, multi-sectoral collaboration amongst local stakeholders and extending to foreign ones — who will leverage their experience and expertise — should close the existing skills gap, the development of robust supply chains, and converging of public-private efforts towards harnessing the potential of nuclear technology. There is a need for human capital development via friendly bilateral relations that support knowledge and skills transfers of peaceful use of nuclear energy.”

All good points there. And great guidance and assistance from the Canadian embassy in Manila with the series of meetings and site visits. In particular, David Hartman, the Ambassador of Canada to the Philippines, and Guy Boileau, Senior Trade Commissioner, and Jesus Sanchez, Trade Commissioner. Mssrs. Boileau and Sanchez brought us on a post-event tour of Niagara Falls — a fantastic place. Aboitiz Power’s Mr. Bernardo estimated that the falls’ huge volume of water can possibly generate at least 1,000 MW of power and it is still winter. Expect more power to be produced during summertime when water volume is higher.

Now that new coal plants in “greenfield” investment are prohibited, with the continuing low and pathetic output from wind-solar-biomass, and with new gas plants which are still insufficient to fulfill high power demand, the government and the public must learn to appreciate the value of nuclear energy. Nuclear power will help avoid blackouts in the future, and provide clean and stable 24/7 electricity for the country’s rising demand and fast economic growth.

See also:
BWorld 686, On electric cooperative cases at the ERC, renewables, and food inflation
BWorld 687, High budget deficit and wage subsidy
BWorld 688, On the nuclear mission in Canada, the AP-MGen-SMC partnership, and electric cooperatives