PHILIPPINE CHRISTIAN UNIVERSITY

1648 Taft Ave., Pedro Gil St., Manila

Graduate School of Business and Management

Case Study on Bataan Nuclear Power Plant

In fulfillment of the requirements on the subject:

Production Operations Management

Master’s Degree in Business Administration

Submitted by: Group 1

Andrade, Coreen Dianne R.
Espaldon, Girlie S.
Limheya, Glenn Lester R.
1st Trimester 2020-2021

Professor: Prof. Neil Bermudez

Date Submitted: December 18, 2020

Case Background
The Bataan Nuclear Power Plant (BNPP) was completed back in 1980s and costing $2.2 billion,
the BNPP currently stands in Morong, Bataan, atop Napot Point that overlooks the West
Philippine Sea. However, it never achieved its goal of generating 623 MW of electricity. The
BNPP is currently the only nuclear power plant in the Philippines and more interestingly, was
still the only nuclear plant in the Association of Southeast Asian Nations (ASEAN) as of 2014.

Nuclear energy first came to the forefront of Philippine politics back in the 1950s when the U.S.
gave the Philippines a nuclear fission reactor. The government then formally established a
nuclear program in 1958 under the Philippine Atomic Energy Commission (PAEC). The BNPP was
then proposed in the 1960s and approved under the Marcos regime (1965 - 1986) in July of
1973. The final contract was given to Westinghouse Electric. The project was completed in
1984.

Unexpectedly, the Chernobyl accident happened turning optimism quickly into skepticism. This
was followed by political events rapidly unfolding in the Philippines and the 21-year rule of
President Marcos, crumbled in the face of the People Power revolution that catapulted Mrs.
Corazon Aquino to the presidency. Almost everything associated with Marcos was rejected,
invariably including the completed and fully constructed and equipped Bataan Nuclear Power
Plant (BNPP). Thus, 1986 saw the first nuclear power plant in the Philippines and in Southeast
Asia mothballed, because of an unfortunate association with an unlamented regime
overthrown by the people. From thereon, the power plant was placed on ‘preservation mode’.
But then, clamor for the reopening of BNPP was revived during the power crisis in the 90s and
the skyrocketing of oil prices in 2007. While successive governments have looked at several
proposals to convert the plant into an oil, coal, or gas-fired power station, these options have
all been deemed less economically attractive in the long term than simply constructing new
power stations.

As different Philippine administrations pass, the Department of Energy (DOE) actually came
close to reconsidering nuclear power as a potential energy source for the country. An Inter-
Agency Core Group on Nuclear Energy composed of the Department of Energy, the Department
of Science and Technology and the NPC Power was organized to do the evaluation. But then the
Fukushima nuclear plant incident happened in 2011, creating global panic and concerns about
the safety and integrity of nuclear plants. The incident virtually led to an undeclared
moratorium on all plans to go nuclear for power generation. If these weren't enough, adding to
these various setbacks, the emergence of natural gas, wind and solar energy pushed nuclear
power deeper into dormancy.

Recently, President Rodrigo Duterte decided to explore the feasibility of using nuclear power by
establishing a cross-ministerial organization. The move could lead to a full-scale debate over the
issue, with the view of resolving the country's chronic power shortage.

The government is considering using the long-dormant nuclear facility of the Philippines - the
Bataan Nuclear Power plant. But the process of putting it back into action will face a mountain
of challenges.
Officials in successive administrations have often discussed using the long-dormant nuclear
plant, with the debate now reignited again, especially in the Department of Energy, since
Duterte issued an executive order in late July.

He ordered the establishment of an inter-agency committee to examine the necessity and

feasibility of incorporating a nuclear power plant in the country's energy mix, as well as the
challenges it faces. The committee is also tasked with compiling the first report by January
2021, after exploring the possibility of restarting the Bataan nuclear power plant.

The Philippines deregulated its electricity market in 2001. Although energy demand is expected
to grow in the long run, private companies have shied away from the risk of making big
investments in the sector, resulting in a shortage of power generation capacity.
Due to its unstable power supply, the country has one of the highest electricity charges in the
region. The Department of Energy recently announced a plan to restart the idle nuclear power
plant as early as in 2007, in an effort to diversify its power sources.

The Philippine government has already called on other countries to provide expertise. In 2019 it
consulted with South Korea's Korea Hydro and Nuclear Power over preliminary investigations to
explore the feasibility of small nuclear reactors. It also agreed with Russia's state nuclear
corporation Rosatom to examine the possibility of constructing a nuclear power plant. A
Rosatom executive reportedly proposed the introduction of offshore floating nuclear power
plants. Discussions could extend further depending on the results in January of the committee's
examination.

Whatever their findings, there would still be a huge amount to be done if the plant was to
reopen. The International Atomic Energy Agency in October 2019 submitted to the Philippine
government a report on the country's nuclear policy, stressing the need to obtain public
understanding, create legal frameworks, nurture human resources and improve related
infrastructure.
One IAEA executive said that although the agency can provide support, it is up to the
Philippines to solve the problems and push the plan forward.

"The president instructed that the plan should be studied carefully and start from the ground
up. I take that to mean that Bataan residents should first be consulted if we are in favor of
reopening the Bataan Nuclear Power Plant," presidential spokesperson Harry Roque told
reporters on Oct. 1, 2020.

It is not certain whether Duterte himself is positive about the introduction of nuclear power
plants. It could be that he wants to come up with solutions for the Bataan nuclear power plant
-- which is a negative legacy left behind by the Marcos administration -- by the time his
presidential term ends in June 2022.
 I. TIME CONTEXT

July 2020

II. VIEWPOINT

The case will be analyzed using the viewpoint of President Rodrigo Duterte, the Philippines’
current President.
III. STATEMENT OF THE PROBLEM

Re-assess the need and viability of introducing Nuclear Power in the country as one of the
means to generate power/electricity.

IV. OBJECTIVES

A. Must
 To determine the benefits of reviving Bataan Nuclear Power Plant.
 To evaluate the gaps between the existing Bataan Nuclear Power Plant
infrastructure and technology and the currently needed nuclear power technology
 Obtain approval and include in the priority policy or policy goals of the Govt.
 To educate the masses on the importance of nuclear power technology and the
controls to be implemented to address safety concerns

B. Wants:
 To formally kick off, control and monitor the rehabilitation project of Bataan
Nuclear Power Plant to ensure successful implementation.
 To contribute solution to increasing problem on global warming.

V. Areas of Consideration

A. Strengths
 There is already existing infrastructure of a power plant (i.e., Existing BNPP on
Morong Bataan).

 Willingness of certain government leaders to revive and rehabilitate the plant

 Duterte noted in the EO signed on July 24 that the committee must take into
account in its feasibility study the economic, security, and environmental
implications of nuclear energy as a power source, as well as perspectives from
stakeholders.
 Secretary Alfonso Cusi welcomed Duterte’s signing of EO 116, saying the move
is a “major step towards Energy the realization of a Philippine nuclear energy
program.”
 Cusi vowed to work with experts including the International Atomic Energy
Agency, which would identify infrastructure gaps. The agency is a United
Nation's organization which "promotes safe, secure and peaceful use of nuclear
technologies."
  The DOE chief said in a statement that once the gaps are filled and other
necessary requirements are fulfilled, “our people and future generations will
reap the economic benefits a nuclear energy program brings.”

 Viable solution for scarcity of resources

Nuclear power, which is reliable in terms of providing stable electricity, is one of the
most promising, safe and economically feasible solutions to supply clean energy to
countries of Southeast Asia and the whole world. Apart from being a key baseload
power source, nuclear power provides zero CO 2 emissions and can play a great role
in advancing our common efforts to prevent climate change.”

B. Weaknesses
 The benefits of Nuclear power are taken for granted due to political agenda
Instead of educating the public with advantages of Nuclear power plant the alleged
corruption overshadowed its benefits.

 Cost of rehabilitation (building and technology) is high

It is estimated that US 1.6 billion dollars is the estimated amount to rehabilitate the
BNPP some suggests that we should build a new one than reviving the plant, but
the challenge is what will we do with the existing facility that we have.

 Poor grid system

Among the issues raised was that it was built near major faults and close to the
then dormant Pinatubo volcano. Due to this, it has been said that electrical
infrastructure were defective.

The main question that needs to be answered is the one regarding safety. Indeed,
the debate regarding the plant in recent years has centered around the locations
earthquake proneness. The Aquino administration has shot down any plans to
revive the plant after discovering that the facility was on top of a major fault line.
Nevertheless, proponents of the BNPP believe that these fault lines are irrelevant
because the BNPP was built to withstand a magnitude 8.0 earthquake. By
comparison, the Fukushima plant was built to withstand a magnitude 7.0
earthquake, which it did before succumbing to the inundation brought about by the
resulting tsunami. Aside from fault lines, the station is under threat from other
factors. The facility actually lies very close to two dormant volcanoes and one active
volcano that all have a chance of erupting. Simulations show that the lahar, tephra
fallout and magma from any of these volcanoes could damage the BNPP. [7]
However, during Mount Pinatubos devastating eruption in 1991 - the second
largest eruption of the 20th century - the BNPP was hardly scathed. This seems to
suggest that the threat posed by these volcanoes is not so severe.

C. Opportunities
 Cost of nuclear energy generation is lower than coal-based electricity generation
 Opening the BNPP will help the country achieve lower electricity prices. Nuclear
plants can lower the costs of electricity to up to P2 per kWh, in comparison with the
rates of coal-fired power plants which can go for as much as P6 kWh

 Allows the government to be less reliant to imported energy sources

More than half of the country’s energy mix is dependent on fossil fuels, 30 percent
comes from natural gas plants and 10 percent is generated from renewable energy
sources like geothermal, wind, hydro-power, and solar energy.

 Increasing energy demand

With the country’s growing economy, the energy demand is expected to rise to
30,000 MW by 2030, an additional 1,100 MW is needed yearly, the Department of
Energy said.

D. Threats
 Public perception of nuclear power is negative
Issues of overpricing, bribery, corruption, mismanagement were also raised.

Due to Chernobyl and Fukushima Indecent and alleged government corruption it

had been BNPP had negative impact to the public

 Large -scale accidents can be catastrophic

In the event of any nuclear incident, living within a 10-mile radius of a nuclear
power plant will make the air unsafe to breath. Water and food sources within 50
miles may also be unsafe.

 Too much democracy

Many opposing ideas had been raised, leading to public confusion and government
were out of focus on what are the priorities resulting to poor decision.

VI. Alternative Course of Action (ACA)

ACA # 1: Perform a comprehensive study regarding the: a) benefits of nuclear power plant;
and b) gaps in order to rehabilitate and implement the plant.

A. Pros
 Gain an Understanding of the real benefits in the Economical Structure of Nuclear
Based Energy
 Removes the myths surrounding Nuclear Power and helps bring light to True
information About its uses of Nuclear Power
 Allows the Government to appropriately Plan for the Nuclear Power Plant Project
 Gives a Research Based Plan for the Improvement of the Country
 B. Cons
 It will take a lot of time to research and plan for the rehabilitation.
 The research would require allocation of funds which requires a budget and  a
rigorous process to accomplish, to spearhead the research.

ACA # 2: Ask expert for other solution to resolve increasing cost and demand for energy and
electricity

A. Pros
 A much cheaper alternative
 Recommendations from the Experts are reliable with a reasonable Assurance
B. Cons
 Does not assure a long-term or short-term solution
 Is not really an action plan to resolve incoming economic and power issues of the
country

ACA #3 Improve current source of power in the country.

A. Pros
 Is a cheap alternative
 Expand the Capacity of Current Usage of Electrical Power

B. Cons
 Does not address the Current Economic and Energy Issue in the Country
 Current Power Systems results in dampening the Ozone Layer which is not good
for the Environment in the long run

VII. RECOMMENDATION

Implementation of ACA # 1: Perform a comprehensive study regarding the: a) benefits of

nuclear power plant; and b) gaps in order to rehabilitate and implement the plant is highly
recommended.
VIII. CONCLUSION/DETAILED ACTION PLAN OR IMPLEMENTATION PLAN

To Implement the ACA #1, detailed study and gap analysis needs to be performed. At the
conclusion of the study, there is a need to educate the public about the dangers and
benefits of Nuclear Power. The Following Information will be shown to the public with their
applicable source:

Benefits of Nuclear Power:

a. While nuclear waste is toxic, it could be stored somewhere. While the toxic by-product
of fossil fuels are pumped in the air we breathe everyday, reducing the consumption of
the world of fossil fuels will result in the prevention of many lung type diseases or
cancers.

It would however take at least 40 years to Completely shift to 100% Renewable Energy
and by the time we wait for that the emissions of fossil fuels would have damaged our
earth too much

b. Nuclear energy reduces carbon dioxide (CO2) emissions. According to NASA’s research
Since 1976 there have 64 Giga tonnes that was not pumped to our Air due to Nuclear
Energy at those times. And in the 21s Century this could amount to 80-240 Giga tones of
CO2 Emission

Human Energy Consumption is rising by the day. According to USA Government

Projection, China alone will add 600-megawatt coal plant every 10 days, for the next 10
years.

China already burns 4 Billion Tons of Coal per year alone

The nuclear energy can dumpen the effects of this and is relatively clean though it is
better to not use nuclear energy for the long term. It can be a great solution for the next
100 year compared to the alternatives.

c. Improvement of Technologies. Improvements of the nuclear power has been stopped in

the 1970 but emerging research for Thorium Reactors , that resolves all the problems of
Nuclear Reactors. Waste of Thorium’s danger is 100x less than compared to Uranium.
It Cannot be used for Warfare

Disadvantages of Nuclear Power

a. Nuclear weapon can be Used as Nuclear weapons as many countries
 b. Nuclear waste and pollution. Waste of nuclear plants are toxic. But can be extracted for
plutonium that can be used either as fuel for weapons or for new nuclear facilities as a
form of renewable energy.
c. Accidents and disasters. Nuclear disaster can be devastating in a country as well as to a
community of not controlled properly especially on the recent Fukushima incident.

With the Rising threat of Energy Loss of the country, we are set into a dilemma, on Getting
Nuclear power or not. The Nuclear Power Plant serves to be both a blessing and a curse in a
Country. Though we cannot know for sure if Nuclear Energy can improve in the long run we
should educate the public and do more research as this can be a solution to the Country’s
current problems with power Consumption and increasing electric bills. This might not be an
easy challenge, but this has not stopped our country in overcoming any of it.

If we can finally learn more on making nuclear power safe and be fully implemented in our
country it can save so much money for the people in the country resulting to more purchasing
power from the population. This will stimulate the economy which will allow it to fund more
studies and research in improving the Nuclear power in the Future.

References:
https://www.fauske.com/blog/cost-benefit-analysis-of-nuclear-power-plants
https://asia.nikkei.com/Business/Energy/Philippines-weighs-starting-dormant-nuclear-plant
https://energycentral.com/c/pip/bataan-nuclear-power-plant-philippines-nuclear-plant-and-
dream-fizzles
https://www.reuters.com/article/us-philippines-energy-nuclear-idUSKCN24U14E
https://en.wikipedia.org/wiki/Nuclear_power_in_the_Philippines