Multi-attribute Decision

Analysis on the Utilization of

BNPP Asset

EgyE 231 Energy Economic and System Analysis Class

Project

1st Semester AY 2016-2017 Energy Engineering Program, University of the Philippines-Diliman

Advised by:

Mili-Ann M. Tamayao, Ph.D.

1

2

Aug. 31, 2016

Senate Energy Hearing

Decision Context

Nov. 12, 2016

Duterte greenlights BNPP Rehab

Nov. 16, 2016

DOE urged to conduct feasibility

study on BNPP

3

– structure

– uncertainty

– preferences

• Choose the best alternative

• Sensitivity analysis

• ITERATE

• Implement

Method Overview

Identify the decision situation and understand

objectives

Identify alternatives

Decompose and model the problem

Choose the best alternative

Sensitivity analysis

Implement

4

Objectives

• Fundamental objective

– To have optimal and sustainable resource utilization

• Means objectives

– Increase the additional reliable base load source

– Maximize government asset

– Minimize government spending

– Minimize negative environmental impact

– Maximize positive social impact and participation

5

Alternatives

● Alternative A: Open BNPP, Rehabilitate nuclear power plant

● Alternative B: Open BNPP, Convert to natural gas-fired power plant

● Alternative C: Open the BNPP, Convert to coal-fired power plant

● Alternative D: Do not open BNPP, Maintain power plant upkeep

● Alternative E: Do not open BNPP, decommission the power plant

immediately

TECHNICAL

6

7

Attributes and Indicators

Attributes Description Indicators Units

Power

This quantifies how much power is sure to be passed to the grid, regardless of fluctuations due to seasonality

Dependable power capacity

MW

Energy This quantifies the amount of electrical energy generated by the power plant in a given unit of time.

Energy Output GWh

Efficiency This is the percent ratio between the amount of energy generated for a unit fuel input.

Conversion efficiency

%

Lead Time This is the amount of time needed to implement the decision until the plant is fully operational of decommissioned

Time needed for implementation

Months

Training Requirements

This quantifies the total time of training for all employees to operate

the power plant

Training time needed

Man-hours

8

Technical Attributes Value

Open BNPP, Rehabilitate

Nuclear Power Plant

Open BNPP, Convert to

Natural Gas-fired Power Plant

Open BNPP, Convert to Coal-

fired Power Plant

Do not Open BNPP, Maintain

Power Plant Upkeep

Do not Open BNPP, Decommission

Plant immediately

Power (MW) 621 1700 800 0 0

Energy (GWh) 4613 12200 5600 0 0

Efficiency (%) 34 54 40 0 0

Lead Time (Months)

24 42 42 0 48

Training Requirements (Man-hours)

9552 4728 4728 0 0

Clarke, M., Ebeling, D., & Cordero, D. Options for the Conversion of the Bataan Nuclear Power Plant to Fossil Fuel Firing. Retrieved October 15, 2016, from

http://www.metts.com.au/bataannucdoc.html

INTERNATIONAL ATOMIC ENERGY AGENCY, Use of Control Room Simulators for Training of Nuclear Power Plant Personnel, IAEA-TECDOC-1411, IAEA,

Vienna (2004).

ENVIRONMENTAL

9

10

Attributes and Indicators

Attributes Description Indicators Units

Water Consumption

amounts of water for cooling purposes typically through the use of a direct cooling or closed cycle

cooling system

Water consumed during operation

MGal/yr

Gaseous Emissions

gases regulate the temperature of the earth by preventing heat loss

into the outer space

CO2e

1000Tonm/yr

Radioactive Waste

Radiation emitted in the process of radioactive decay to

reach a certain level of stability of a radio-nuclide

amount of radioactive nuclide

in decay GBq/yr

Water Thermal Pollution

amount of heat discharged into a body of water due to man-

made interventions. Heat discharged MWthermal

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Environmental Attributes Value

Open BNPP, Rehabilitate

Nuclear Power Plant

Open BNPP, Convert to

Natural Gas-fired Power Plant

Open BNPP, Convert to Coal-

fired Power Plant

Do not Open BNPP, Maintain

Power Plant Upkeep

Do not Open BNPP, Decommission

Plant immediately

Water Consumpti

on 3,782.66 2,684 4,368 0 0

Gaseous Emissions

27.678 583.97 5,566.4 0 4.613

Radioactive Waste

4,474,610 12.44 70,000 0 0

Water Thermal Pollution

1268 1750 1200 0 0

SOCIO-POLITICAL

1

2

13

Attributes and Indicators Attributes Description Indicators Units

Employment Average number of employees based on

nuclear PP in US and coal and natural gas PP

in the Philippines

On-site full time

employees pax

Permanent Land Area

Land area use for operation

Actual land area of

BNPP according to

NAPOCOR

hectare

Risk Perception

Subjective judgement that people make

about the characteristics and severity of risk.

Quantified thru

survey of UP-

Diliman Students

Percentage

Direct Fatalities

fatalities associated with accidents and other

unwanted events when such extreme risks

come into reality

Number of deaths

based on European

study

pax

Human Displacement

probable displacement of inhabitants in

communities that within the permanent

exclusion zone to secure them against health

risks

Evacuation area

during emergency km radius

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Social Attributes Value

Open BNPP, Rehabilitate

Nuclear Power Plant

Open BNPP, Convert to

Natural Gas-fired Power Plant

Open BNPP, Convert to Coal-

fired Power Plant

Do not Open BNPP, Maintain

Power Plant Upkeep

Do not Open BNPP, Decommission

Plant immediately

Employment 300 121 263 0 0

Permanent Land Area

389 389 389 389 0

Risk Perception 32.89% 10.53% 27.63% 11.84% 10.53%

Direct Fatalities 65 2.821 77 0 0

Human Displacement

30 16 30 0 0

ECONOMIC

1

5

16

For Alternatives 1, 2, and 3, the following primary

assumptions were considered in the model:

Financing Mix (Debt/Equity): 70/30 %

Rate (Debt/Equity): 7.25/12.76 %

Foreign Exchange: Php 46.25/$

Inflation Rate: 2.3%

Corporate Income Tax: 30%

WESM Price: Php 4.02/kWh

For Alternative 4, the maintenance cost of the nuclear

power plant is used

Assumptions

17

For Alternative 5, the calculations were based upon the

annual estimate of US NPPs as required by the Nuclear

Regulation Commission (NRC).

For PWR’s, the estimated cost of decommission in 1986

dollars is (75 + 0.0088 x thermal input) x 1 M USD.

In 2012 $,

A, B and C, are the fractional 1986 costs attributed to labour (A), energy (B), and burial (C). Lx is the

labor cost adjustment, Ex is the energy cost adjustment, and Bx is the burial cost adjustment. A = 0.83,

B = 0.16. C, and Bx is not used.

Assumptions

18

Economic Attributes Value

Open BNPP, Rehabilitate

Nuclear Power Plant

Open BNPP, Convert to

Natural Gas-fired Power Plant

Open BNPP, Convert to Coal-

fired Power Plant

Do not Open BNPP, Maintain

Power Plant Upkeep

Do not Open BNPP, Decommission

Plant immediately

Net Present Value

Php 34.21B Php 38.08B Php 8.09B (Php 1.32B) (Php 12.66B)

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Best and Worst Values per Attribute Aspects i Attributes Units Best Worst

A. Socio-Political 1 Employment pax 700 0

2 Permanent Land use ha 0 389

3 Risk perception % 10.53 32.89

4 Direct fatalities deaths/TWh 0 77

5 Human displacement Km radius 0 30

B. Environmental 6 Gaseous emissions 1000Tonm/y

r 0 5566.4

7 Water Thermal

pollution MWthermal

0 1750

8 Water consumption MGal/yr 0 4368

9 Radioactive waste GBq/yr 0 4474610

C. Economic 10 Net present value Php Php 38.08B (Php 12.66B)

D. Technical 11 Power output MW 1700 0

12 Energy Output GWh 12200 0

13 Efficiency % 54 0

14 Lead time months 0 48

15 Manpower training man-hours 0 9552

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Evaluation of Alternatives

Alternative Envi Socio Tech Econ Total Rank

Open BNPP, Rehabilitate

Nuclear Power Plant

16.23

11.25

17.34

36.14

80.95

3

Open BNPP, Convert to Natural

Gas-fired Power Plant

20.29

22.17

33.60

39.12

115.18

1

Open BNPP, Convert to Coal-

fired Power Plant

6.20

5.23

21.29

16.00

48.72

5

Do not Open BNPP, Maintain Power

Plant Upkeep

28.65

25.63

18.51

8.74

81.54

2

Do not Open BNPP, Decommission

Plant immediately

28.64

35.72

9.26

0

73.62

4

21

References

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making. Renewable and Sustainable Energy Reviews, 13(9), 2263–2278. doi:10.1016/j.rser.2009.06.021

Clarke, M., Ebeling, D., & Cordero, D. Options for the Conversion of the Bataan Nuclear Power Plant to Fossil Fuel Firing. Retrieved

October 15, 2016, from http://www.metts.com.au/bataannucdoc.html

Boyce, M. P. (2001). Gas turbine engineering handbook, Second edition (Incompressible flow Turbomachines) (2nd ed.). Boston, MA:

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TECDOC-1411, IAEA, Vienna (2004).

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_Establishment_of_Power_Plant_Training_Centres_.pdf

TECHNICAL

22

References

Bataan Nuclear Power Plant, NAPOCOR . http://www.napocor.gov.ph/index.php/bataan-nuclear-power-plant

Darker, C. (2013). Risk Perception. In M. D. Gellman & J. R. Turner (Eds.), Encyclopedia of Behavioral Medicine (pp. 1689–1691).

inbook, New York, NY: Springer New York.

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http://www.fmreview.org/sites/fmr/files/FMRdownloads/en/crisis/meybatyan.pdf

Three Mile Island Accident, 7 February 2013. (http://www.nrc.gov/reading-rm/doc-collections/fact-sheets/3mile-isle.pdf

Susan Cutter and Barnes, Evacuation behavior and Three Mile Island, Disasters, vol. 6, 1982, pp. 116-124.

http://www.pbs.org/wgbh/amex/three/peopleevents/pandeAMEX97.html

2010 Connecticut power plant explosion.http://edition.cnn.com/2010/US/02/07/connecticut.explosion

Benchmarking Nuclear Plant Staffing, Dr. Robert Peltier, PE

Team Energy 2010 Sustainability Report

Kharecha, P. A., & Hansen, J. E. (2013). Prevented mortality and greenhouse gas emissions from historical and projected nuclear

power. Environmental Science and Technology, 47(9), 4889-4895. Retrieved from http://pubs.acs.org/doi/pdf/10.1021/es3051197

Markandya, A., & Wilkinson, P. (2007, September 15). Electricity generation and health. Lancet, 370(9591), 979-990.

doi:10.1016/S0140-6736(07)61253-7

Post, W. (2013, February 26). Energy Post. Retrieved from The Energy Collective: world's best thinkers on energy and climate:

http://www.theenergycollective.com/willem-post/191326/deaths-nuclear-energy-compared-other-causes

SOCIO-POLITICAL

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References

Alonso, A., Crossland, I., “Infrastructure and Methodologies for the Justification of Nuclear Power Programmes”. Woodhead Publishing

(2012): 100-126

ERC Case No. 2014-137 RC: In Matter of Application for Approval of the Power Sales Agreement Between Cagayan Electric Power and Light

Company, Inc. and Sarangani Energy Corporation with Prayer for Provisional Authority

Bloomberg market. Retrieved from https://www.bloomberg.com/quote/USDPHP:CUR

Philippine Statistics Authority (PSA). Retrieved from http://www.bsp.gov.ph/statistics/spei_new/tab34_inf.htm

Philippine Wholesale Electricity Spot Market. Monthly Summary Report for January 2014 to September 2016

ERC Case No. 2012-034 RC: In the Matter of the Application for Approval of Power Supply Agreement (PSA) Between Manila Electric

Company (Meralco) and South Premier Power Corporation (SPPC)

ERC Case No. 2016-081 RC: Application for the Approval of The Electric Power Purchase Agreement with a Prayer for the Issuance of a

Provisional Authority

Rush, Chris; Varley, Geoff. “Research on Decommissioning of Nuclear Power Plants.” Swedish Regulation Safety Authority. 2011. Accessed

November 2016. http://www.iaea.org/inis/collection/NCLCollectionStore/_Public/42/040/42040097.pdf

Office of Nuclear Reactor Regulation, “Report on Waste Burial Charges”. United States Nuclear Regulatory Commission. NUREG-1307 Rev. 15,

2012. Accessed November 2016. http://pbadupws.nrc.gov/docs/ML1302/ML13023A030.pdf

IHS, “CERA IHS Indexes.” 2016. Accessed November 2016. https://www.ihs.com/info/cera/ihsindexes/

ECONOMIC

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References

Environmental

1. Gerdes, K., & Nichols, C. (2009). Water Requirements for Existing and Emerging Thermoelectric Plant Technologies. National Energy

Technology Laboratory DOE/NETL 402/080108, 2008(August 2008), 26.

2. Schoff, R. (2016). Power Plant Water Usage and Loss Study The United States Department of Energy, (May 2007).

https://doi.org/10.13140/RG.2.1.5024.6163

3. Clarke, M., D. Ebeling, and D. Cordero. "Options for the Conversion of the Bataan Nuclear Power Plant to Fossil Fuel Firing." METTS Pty. Ltd.,<

http://www. metts. com. au/bataannucdoc. html>, last accessed November 7 (2016).

4. U.S. Life Cycle Inventory Database. Electricity, bituminous coal, at power plant(2012). National Renewable Energy Laboratory, 2012.

Accessed Nov. 07, 2016: https://uslci.lcacommons.gov/uslci/search

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(2001): 81-91.

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Thank you and good afternoon!

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Additional Information

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Objectives

Fundamental objective

– To have optimal and sustainable resource utilization

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Influence Diagram

29

Capacity: 620MW

• Rehabilitate existing

components

• Install nuclear fuel

• Train personnel

Existing Nuclear Power Plant

30

Capacity: 800 MW

• Rehabilitate majority

of existing

components

• Major conversion of

nuclear reactor into

coal-fired boiler

Convert Nuclear Reactor to Coal-

fired Boiler

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Capacity: 1700 MW

• Construct new

primary plant powered

by natural gas

• Rehabilitate majority of

existing components

• Retrofit steam

generator to use waste

heat from gas turbine

Convert Nuclear Reactor to Natural

Gas Cogeneration

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Decompose and model the problem

Problem Model

Selection of attributes and indicators

Quantification of indicators

Normalization of indicators

Weighing of Indicators

Aggregation

33

Influence Diagram

34

System Boundary

35

Influence Diagram

36

Economic Influence Diagram

37

• The Net Present Value accounts for the time value of money

for all cash inflow and outflow. The cash inflow includes all

revenue streams of the investment and to some extent the

salvage value of the asset after its useful life.

Economic attribute (NPV)

38

NPV Parameters

Parameter Description

Electricity Price Electricity price as source of revenue for the power plant. Based on WESM

Availability Factor Based on estimated generation and taking into account any curtailment that

is necessary.

Variable Cost Variable Cost are costs that vary directly with changes in output. For fossil fuel units the most important variable cost is fuel

Tax The study limits the tax implications with sole consideration on the

Corporate Income Tax rate for the Investor.

Operations and

Maintenance

This cost takes account both fixed and variable O&M. Operation and

management is essential to achieve profitable long term operation through

maximizing availability while optimizing the equipment life.

Decommisioning

Decommissioning encompasses all technical and administrative activities aimed at retiring the plant. Since cost is immensely involved in this process, the study considers the different cost component involved in each alternative

39

Financial Model

• A spreadsheet was made for the financial model of the alternatives, to obtain

the Net Present Value of the Project. While some critical values are on

continuous research, a number of insights can be derived in the model.

40

For Alternative 1, the following critical assumptions were

used in the model:

A. Capacity Cost = $ 1,254 Million

B. Fixed O&M = Php 458.33/kW-yr

D. Energy Payment = Php 0.33/kWh

Assumptions

41

For Alternative 2, the following critical assumptions were

used in the model:

A. Capacity Cost = $ 1,385 Million

B. Fixed O&M = Php 423.73/kW-yr

C. Admin Fee

USD Portion = $11.96/kW-yr

Fixed Portion = Php 967.73/kW-yr

Escalating = Php 84.75/kW-yr

D. Energy Payment = Php 3.47/kWh

Assumptions

42

For Alternative 3, the following critical assumptions were

used in the model:

A. Capital Cost = $ 750 Million

B. O&M Fee = Php 0.36/kWh

C. O&M Fee = $ 0.01/kWh

D. Fuel = Php 2.31/kWh

For Alternative 4, the maintenance cost of the nuclear

power plant is used

Assumptions

43

For Alternative 5:

The values of each cost adjustment (2012 to 1986) are 2.38 (Lx), and

2.704 (Ex).

For the burial costs, the cost from Washington PWRs in 2012 are used.

Excluded are contaminated materials within the complex, spent resins,

combustible wastes and evaporator bottoms. Dose rate charges aren’t

included.

it is adjusted further according to the IHS North American Power

Capital Cost Index wherein their values are 220 in 2012 and 225 in

2016. It is assumed that the process of decommission process would

take 10 years.

Assumptions

44

Decompose and model the problem

Problem Model

Selection of attributes and indicators

Quantification of indicators

Normalization of indicators

Weighing of Indicators

Aggregation

45

Evaluation of Alternatives

• The utility function for each attribute in an aspect was

obtained. They were treated as additive utility functions.

• The weights in an attribute per aspect is assumed to be

equal.

• The results per attribute were normalized with respect to the

sum of the scores of each aspects.

• The results were then treated to be the utility function of the

aspects.

• The ulitity function of each aspect was treated as an additive

utility function.

• The weight of each aspect is assumed to be equal.

46

Alternatives l Decision Tree

The Decision Tree for the Bataan Nuclear Power Plant