FITCH SOLUTIONS Country Risks & Industry Research (Fitch Solutions) said the proposed executive order (EO) to permit nuclear power as an energy source suggests “upside” for the entire energy sector in the form of a near-term demand surge for power.

Fitch Solutions said in a note Thursday that nuclear power being “successfully reintroduced” into the country’s energy mix will post a “substantial upside risk” to its forecast for the energy sector.

Energy Secretary Alfonso G. Cusi submitted late last month to President Rodrigo R. Duterte a draft executive order that will allow the use of nuclear energy as a power source. Palace officials said the document is now with the President for review.

“There is substantial upside risk to our forecasts for the Philippine’s energy sector if nuclear is successfully reintroduced into the country’s energy mix, assuming that adequate resources are allocated for it,” according to the note.

However, it said it will maintain its current assumption that no nuclear capacity will go live over the next decade since there were no details available yet on the contents of the EO or when it will be signed.

“At present, we maintain our forecasts… given that there are still significant uncertainties surrounding this such as high capital costs, safety considerations and long lead times, but we may seek to revise it if there is more concrete project development in the sector going forward,” it added.

Fitch Solutions said the use of nuclear energy can be an “effective way” to meet the expected demand surge since it has a “high capacity factor as a baseload resource,” while coal-generated energy continues to face opposition on environmental concerns.

“We stress that Philippines is set to see a power demand surge over the coming years driven by strong macroeconomic and demographic growth, along with government goal to achieve a 100% electrification rate by 2022 under the Total Electrification Programme (TEP),” it said.

It also said that in the past, foreign suppliers of nuclear equipment have expressed interest in the Philippines, including companies from the US, Japan, Russia, France and South Korea.

Recently, Fitch Solutions noted that some developments in the nuclear sector have included studies to operate the mothballed Bataan Nuclear Power Plant.

In October, the United Nations International Atomic Energy Agency (IAEA) submitted a positive assessment of the Philippines’ preparedness for nuclear power and made several recommendations for the government if it proceeds.

The Energy department has prepared a national development plan for the industry pending the preparation of appropriate legislation and consultations. — Beatrice M. Laforga