Now that you all have settled comfortably into your new offices, it’s time to get down to business.
Things are looking good: The island’s economy grew by 6.0 percent in 2022, and it grew by another 7.6 percent in 2023, according to the Philippine Statistics Authority. The latter figure was the best of all six provinces in the Bicol Region. (Catanduanes Tribune, Dec. 20, 2024.)
Only recently has Catanduanes been able to lay claim to being a small, rapidly diversifying economy with residual primary-sector dependence for employment and subsistence. A few short years ago it was relying mainly on agriculture and natural resources for local use or export.
Today, agriculture, forestry and fishing account for only 7.5 percent of the island’s economy, according to the Philippine Statistics Authority, while industry and services account for 47.3 percent and 45.2 percent, respectively.
However, in this reckoning, “industry” is dominated by construction and small industry, while “services” is dominated by tourism. Construction in Catanduanes is largely government-driven, and tourism pays low wages and is seasonal in nature.
Heavy reliance on construction and tourism is not sustainable in the long term. A lack of diversification is the signature of a narrow economic base that is highly vulnerable to external forces.
In order to diversify the economy, Catanduanes needs manufacturing, tech or creative industries, and expansion of the services sector — more doctors, lawyers, architects, real estate brokers, and consulting engineers, for example.
Unfortunately, near daily power outages, rotational load shedding, voltage fluctuations, overdependence on expensive, imported fossil fuel. . . . These aspects of daily life are immovable constraints on development. [Author’s Note: I lost power while writing this sentence.]
Catanduanes depends on an unreliable power setup of diesel generators that often break down. This is combined with a small hydroelectric power system with inadequate water supplies and ageing turbines.
The island’s grid capacity stands at about 16.5 megawatts, but it rarely delivers that much due to defective equipment, and demand frequently exceeds capacity by 1-2 MW during summer. First Catanduanes Electric Cooperative, Inc., has estimated that peak demand will reach 25 MW by 2030, so the future is bleak, to say the least.
The use of diesel engines for the generation of electricity was first adopted in the 1910s and 1920s, mainly for remote mining operations, and such systems were widely used during World War II for military operations on remote Pacific islands.
This is where Catanduanes and neighboring islands stand today — relying on a 100-year-old technology for power generation.
Think outside the box for a minute: A small modular reactor would be a clean, quiet, storm-resilient source of 60-100 MW of continuous electricity — enough to electrify not only Catanduanes, but neighboring islands as well.
SMRs are compact, factory-built nuclear reactors designed for smaller grids or remote areas. Unlike traditional nuclear power plants that require massive infrastructure and astronomical budgets, SMRs can be shipped by barge, assembled on-site, and connected to local grids with relatively low environmental impact.
Deploying an SMR would require a storm-resilient coastal site with port access; upgraded transmission lines and substations; grid interconnections between islands; a skilled workforce trained in technical and safety procedures; and probably national and international regulatory oversight.
Today 20 countries, including Canada, Japan, Russia, the United States, the United Kingdom, China, South Korea, and Indonesia, are actively developing SMRs to bring clean, stable energy to remote communities.
Connected via mini-grids of undersea cables, a regional SMR energy hub based in Catanduanes could serve Marinduque, Romblon, Siquijor, Dinagat, Camiguin, and even parts of Palawan and Masbate — islands that together represent over 4 million Filipinos living with poor or intermittent power, usually from old diesel generators.
SMRs typically cost between PHP17 billion and PHP28 billion per unit, and site preparation, grid modernization, and the hiring and training of local staff would add another PHP11 billion. From planning to completion, the project would take 5-6 years.
While the upfront investment would be high, the long-term operational savings and development benefits outweigh the costs.
If you just threw up your hands in despair, you probably did not know that the Department of Energy has a Clean Energy Scenario proposing eight 150 MW SMRs by 2032, with plans for expansion after 2035.
Just a few weeks ago, Congress ratified the Philippine National Nuclear Energy Safety Act, establishing the Philippine Atomic Energy Regulatory Authority — PhilAtom — as an independent nuclear regulatory body slated to begin operation by 2026. And the DOE has released a draft circular to formally integrate nuclear energy into the country’s power mix.
Also, the Philippines just entered an agreement with a South Korean nuclear power company to figure out if the defunct 1984 Bataan Nuclear Power Plant can be refurbished and revived enough to provide 1200 MW of power by 2032.
In other words, the national government has renewed its interest in nuclear power, and it is rolling out the carpet for a network of small SMR-powered regional grids.
Meanwhile, Catanduanes is an ideal candidate to commandeer one of these SMR operations.
Vendors such as NuScale and Holtec in the United States and SMART, based in South Korea, already offer reactor designs suitable for island environments.
Such a project could be financed through a public-private partnership supported by the Philippine government through the Department of Energy and the National Economic and Development Authority. Loans or grants are available from the Asian Development Bank and the World Bank. Investment support is available as well from the US EXIM Bank and the Green Climate Fund, particularly if American or Korean SMR technology is used.
How such an operation would be managed is up for grabs. It could be entirely government owned and operated — or there could be an Independent Power Producer model in which a private company such as FICELCO would build and operate the reactor under government regulation, with a long-term power purchase agreement ensuring stable electricity prices. [Author’s Note: I lost power again while writing this conclusion.]
Bryce McIntyre, PhD, resides in San Andres. He holds a doctoral degree from Stanford University, Palo Alto, California, USA.