DOE prepares Philippine nuclear plant blueprint

The Department of Energy (DOE) is laying the policy groundwork for the country’s first commercial nuclear power plant (NPP), aiming to attract investors and deliver cheaper power to Filipinos, according to a report by Philippine Star.

Under a draft department circular, the DOE is proposing vital pricing and dispatch guidelines designed to create a “conducive and competitive market” for the pioneer NPP project.

A key element of the framework mandates distribution utilities (DUs) to ensure a ready market for the project’s available capacities, exempting it from the conduct of the usual competitive selection process.

“The commercial development and operation of an NPP, once optimally blended with the generation cost of (DUs), can effectively lower electricity rates,” the draft circular states.

The pioneer NPP should be considered a baseload plant with priority dispatch guaranteed through coordination between the DOE and the system operator.

Within 90 days from the issuance of the circular, the DOE will be required to explore options for the government’s role in the project, particularly on the financing aspect.

This will be coordinated with the Department of Finance, Department of Economy, Planning and Development, Maharlika Investment Corp. and any other relevant government agencies.

The draft circular also mandates the DOE and the Energy Regulatory Commission (ERC) to evaluate potential policies for nuclear integration on DUs and the National Electrification Administration.

In terms of pricing, the ERC will be directed to formulate the rules and guidelines for the appropriate price-setting methodology for the pioneer NPP’s operation within 90 days from the circular’s issuance.

This includes setting the reserved price or tariff range for the technology and grid enhancements for nuclear integration.

For power supply contracts, the draft circular requires the regulator to set a minimum 25-year term starting from the plant’s commercial operation, with an option to extend for another 25 years.

To ensure swift realization of the investment, the pioneer NPP is expected to be “automatically certified” as an energy project of national significance, expediting its licensing and permit processing.

These proposed guidelines aim to boost the development and operation of the pioneer NPP and provide policy foundations for the succeeding nuclear projects, the DOE said.

The DOE is requesting all interested parties to submit their comments and recommendations on the proposed department circular.

Under the existing nuclear roadmap, the Philippines wants to have at least 1,200 megawatts of commercially operational power plants by 2032 and scale this up to 2,400 MW by 2035 and 4,800 MW by 2050.

The integration of nuclear in the power generation mix as a clean and reliable source supports  the country’s ambitious energy transition push.

In 2023, coal accounted for the largest share of the Philippine energy pie at 63 percent, followed by renewable power (22 percent) and natural gas (14 percent).