Stable nuclear power, expensive offshore wind

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Two recent reports and issues caught my attention. One is the Department of Energy (DOE) simplifying the licensing of nuclear power project, the other is the P11/kWh green energy tariff (GET) of offshore wind. See these two reports in The Star: “Government to streamline nuclear project licensing” (Feb. 25), “ERC raises ceiling price for offshore wind auction” (Feb. 23).

Last Feb. 18, Meralco, through its generation arm Meralco PowerGen Corp. (MGEN) received a grant of $2.8 million (P162 million) from the US Trade and Development Agency (USTDA) to support its efforts for a safe and responsible adoption of nuclear energy for long-term security. This will advance Meralco’s Nuclear Energy Strategic Transition (NEST) program.

MGEN will conduct a comprehensive small modular reactor (SMR) adoption study to start this year. MGEN president and CEO Manny Rubio should be very happy to have additional power supply in their portfolio, from thermal (coal, LNG) to solar and soon, nuclear.

Meralco chairman and CEO Manuel V. Pangilinan said: “Through the good graces of the US government, we are laying the groundwork for responsible integration of nuclear into our overall fuel mix… It simply is right for the country to think nuclear… We look forward to the progress this collaboration will bring – a secure energy future we will build together.”

Last Feb. 20, I attended the DOST’s Philippine Nuclear Research Institute (PNRI) “Nuclear Reactor Technology Assessment (RTA) Workshop: Engaging Stakeholders in Nuclear Technology Assessment for Deployment in the Philippines.” It was in collaboration with the Energy Engineering Program of the UP College of Engineering and held at Luxent Hotel, Quezon City.

There is a Nuclear Reactor Technology Assessment and Development, Component 3: RTA  (NuRad-RTA) Project which supports the Philippines’ ongoing efforts to evaluate and compare nuclear reactor technologies through the International Atomic Energy Agency (IAEA) RTA framework.

Dr. Caloy Arcilla, soon retiring as director of PNRI, made a good presentation and mentioned that there is SMR “overhype” as there are 150+ designs of SMR, but only two are operational, China’s HTGR (TRISO) and Russia’s Lemonosov PWR. Japan has one research reactor. And that there are “too many powerpoints, too few (nuclear) power plants.”

On the GET for offshore wind (OSW), the Energy Regulatory Commission (ERC) raised the ceiling price for the country’s first OSW auction from P10.386/kWh to P11/kWh. This will apply to 3,300 MW of OSW under Green Energy Auction (GEA) 5, for delivery from 2028-2030.

OSW is expensive and impractical. Too many logistical costs even before building it, like costs of port rental, land acquisition or rental, fishery compensation, huge ships rental, and so on.

Winning bidders will deliver power supply for 20 years, with GET or guaranteed price of P11/kWh beginning upon project commissioning and registration with the electricity spot market. Then consumers will endure additional expensive electricity via GEA-Allowance (GEA-All), on top of the existing feed in tariff allowance (FIT-All) also for intermittent RE like solar and wind.

I made a rough comparison of countries with high wind power generation and their inflation in Europe and Asia. The numbers below are for (a) wind generation in terawatt-hours (TWh) in 2014 and 2024, and (b) average inflation for 2013-2016 and 2022-2025.

Europeans have high wind generation and rising inflation. See the numbers:

Belgium: (a) 4.6 and 13.2 TWh, (b) 1.0 and 4.9 percent.

Denmark: (a) 13.1 and 20.6 TWh, (b) 0.3 and 3.8 percent.

Poland: (a) 7.7 and 25.9 TWh, (b) -0.1 and 8.3 percent.

Netherlands: (a) 5.8 and 33.4 TWh, (b) 0.8 and 5.6 percent.

Sweden: (a) 11.2 and 40.5 TWh, (b) 0.6 and 4.2 percent.

France: (a) 17.6 and 47.1 TWh, (b) 0.5 and 3.7 percent.

Spain: (a) 52.0 and 62.6 TWh, (b) 0.1 and 4.3 percent.

UK: (a) 32.0 and 84.1 TWh, (b) 1.2 and 5.6 percent.

Germany: (a) 58.5 and 138.9 TWh, (b) 0.9 and 4.8 percent.

Indonesia: (a) zero and 0.5 TWh, (b) 5.7 and 3.0 percent.

Malaysia: (a) zero or negligible for both years, (b) 2.4 and 2.3 percent.

Philippines: (a) 0.2 and 1.3 TWh, (b) 2.0 and 4.2 percent.

S. Korea: (a) 1.1 and 3.4 TWh, (b) 1.1 and 3.3 percent.

Taiwan: (a) 1.5 and 10.3 TWh, (b) 0.8 and 2.3 percent.

Vietnam: (a) 0.1 and 12.7 TWh, (b) 3.5 and 3.3 percent.

Sources: wind generation from the Energy Institute, Statistical Review of World Energy 2025; annual inflation from IMF, World Economic Outlook 2025; averages are author computations.

There. Many Europeans are on slow motion energy and economic suicide with ever-rising wind power and rising inflation. This should not happen because Europe is mostly industrialized and hence, have the capacity to mass produce, mass storage, mass transport various goods and commodities and thus, inflation should remain low. This is not happening.

Aside from expensive GET, OSW will also require higher capex from NGCP. Those OSW are far out, in far side of Mindoro, Palawan, Negros island, Guimaras, etc. This means higher transmission wheeling charge plus ancillary service by NGCP in our monthly electricity bill.

The Philippines has entered a new era of provoking more inflation with additional expensive energy source like OSW. The economic team should flag this creeping danger to our macroeconomic stability.

Meanwhile, I am happy that Aboitiz Power and North Negros Electric Coop that serves my hometown Cadiz City and neighboring towns and cities have inked a 30-MW baseload power supply, mostly from AP’s coal plant in Bataan. I stayed in Cadiz until high school, my folks are still there and they said that occasional blackout still occurs. I hope this additional baseload or 24/7 power supply will reduce the inconvenience of blackout and power fluctuation.