The price of power

Iran is paying a heavy political and economic price for its first nuclear power plant.

So nuclear power has come to the region at last. Once the fuelling of the Bushehr reactor is complete this month, the 1,000MW plant is ready to contribute to Iran’s electricity grid.

While experts say that there is little danger that the reactor will serve the hardline regime in their (assumed) quest for a nuclear arsenal, neighbouring countries and Western powers are still concerned, given Iran’s history of covert operations to acquire weapons components.

Fuelling this concern is Iran’s refusal to halt its uranium enrichment programme. The mullahs claim that the programme is for a peaceful purpose, and point to their ambitious plans: 20,000MW to be generated from nuclear power by 2025.

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Ambition is a good thing, but not when it borders on megalomania. Having maneuvered itself into diplomatic isolation, Iran is struggling both for funds and technical expertise. A second Bushehr is unlikely in the coming decades.

With its insistence on the enrichment programme, the regime opens itself up for the inevitable question: Why enrich, if not for military purposes? “They haven’t been able to answer that question favourably,” comments Sam Ciszuk from IHS Global Insight.

This sort of intent is not expected from other Middle Eastern countries, and Saudi Arabia and Kuwait are some of those exploring the option of following Abu Dhabi’s example of building nuclear reactors sans the international fallout.

But even if pursued with undoubtedly clean intentions, nuclear is no easy answer to the power shortage in the region.

For one thing, a surge of demand would lead to a shortage of skilled manpower, a scarce resource in the region at any rate. On the back of demand for nuclear power elsewhere in the world, construction cost would rise.

“The market has turned from a buyer’s into a seller’s market,” says Holger Rogner, section head at the UN’s International Atomic Energy Agency.

While nuclear might still be a worthwhile option to pursue, decision makers would do well to think for alternative ways to solve their power problems.

Power outages, the most noticeable symptom of a stretched supply, are the result of generation capacity being outstripped by peak loads. In the summer months, utilities find it hard to cope with rising demand, especially in the daytime heat.

Are we just chasing peak loads, asks Abhay Bhargava from consultancy Frost & Sullivan. Would it not be wiser to entice industry, and households, to consume less during peak hours? The innovative use of tariffs could so reduce the need to build ever more generation capacity.

This would still entail investment, as the electricity grid would have to be upgraded, and smart metering would become essential. But it would be a more energy efficient solution, and pave the way for the mass use of renewables.

One thing is for sure: Whatever the solution, there will be a price for it.