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Power Struggle

UME looks at the region's nuclear ambitions, and the challenges faced

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Russia will train personnel for Qatari nuclear power facilities, as the country attempts to add 5,400MW of nuclear capacity by 2036.
Russia will train personnel for Qatari nuclear power facilities, as the country attempts to add 5,400MW of nuclear capacity by 2036.

As the Gulf embraces nuclear power in an attempt to meet continuing demand for power and an alternative to fossil fuels, Andrew White looks at the region’s progress and asks what challenges it’s likely to face.

Queen Elizabeth II is well used to grandiose receptions, but this must have impressed even Her Majesty.

Welcomed onto UAE soil by a 21-gun salute, the British monarch and her husband Prince Philip were treated to a whirlwind tour of Abu Dhabi in a motorcade of more than 60 vehicles, some driven by cabinet ministers and sheikhs themselves.

Thousands lined the streets of the capital, waving Union Jack flags and singing the British national anthem.

And after a breathless day and a half in Abu Dhabi and Dubai, the royal couple set sail for Oman on the Royal Yacht Britannia, with what is reported to have been a stack of jewellery from the UAE royal family.

That was February 1979, and it would be another 31 years before the royal couple would visit again. Last November’s return of the Queen was markedly different in many ways: no gunfire this time around, no parade, and if Her
Majesty glimpsed a Royal Yacht, it was likely to have been the QE2, now the property of Dubai and unlikely ever to set sail again.

And yet some things stay the same – the Queen did not leave empty-handed, this time in possession of something that could prove vastly more valuable than jewellery.

Her Highness’ visit enabled the signing of a nuclear cooperation accord with Emirati leaders, between Britain and the UAE. The pact should guarantee British industry a role in the development of the UAE’s nascent nuclear programme, which will see the country’s first reactors come online in 2017, and follows the signing of accords between the UAE and the US, South Korea, France and Japan.

“The UAE has made huge progress, and if you look at the whole of the Middle East and North Africa, while Egypt and Algeria were initially the most advanced countries, the UAE has managed to overtake both of them,” says Samuel Ciszuk, Senior Energy Analyst for Middle East and North Africa at IHS Global Insight.

In late December 2010 it was announced that the UAE had filed construction licenses for two reactors with the country’s new nuclear regulator, the Federal Authority for Nuclear Regulation (FANR).

Submitted a year after the awarding of a $20bn construction contract to a South Korean consortium led by KEPCO, the 9,000-page applications for Braka Units 1 and 2 are based largely on the safety analysis done for two units in South Korea, on which the Braka reactors are modelled.

KEPCO has stated that construction of the Braka site’s harbours, breakwaters and waterways will be completed in 2011, along with labour accommodation for 10,000 workers.

And it is anticipated that all four Braka reactors will be up and running by 2020.

Group effort
The UAE is not alone in spending billions of dollars developing nuclear energy capabilities – each of the six nations in the hydrocarbon-rich Gulf has announced plans to splash petrodollars on what is considered to be the cleanest alternative to fossil fuels.

Moreover, they have signed high-level cooperation deals with countries including the US and Russia, to bring international expertise and so speed their programmes.

Officials in the world’s top oil exporting country, Saudi Arabia, say that the kingdom will need 40 gigawatts (GW) of base load power by 2030, which could be met by nuclear plants.

Demand is growing by approximately eight percent a year, and in April 2010 King Abdullah issued a royal order establishing the King Abdullah City for Nuclear and Renewable Energy, an organisation that will oversee all aspects of a nuclear power industry in the country.

Moreover, an entire new section of the Saudi capital Riyadh will be powered by nuclear energy; a first for the Middle East.

“Saudi faces significant growth in demand, and while it’s hard to say which Gulf country needs nuclear power more urgently, it is certainly shaping up as the second Gulf country to achieve nuclear power,” says Ciszuk at IHS.

“Last year, even in places such as Saudi, people started talking about cutting energy subsidies and raising power prices, but that idea was the first victim of the unrest in Tunisia and Egypt, because now nobody will cut subsidies for the foreseeable future,” he continues.

“It puts them back to square one, and nuclear fuel is now a much more attractive prospect because it’s the only source that could provide big jumps in the threshold of capacity, but actually lower hydrocarbon use in the country.”

When Saudi does go down the nuclear route, it is likely to be arm-in-arm with the US: when George W Bush was in office his administration said it would provide “training and support to build a civil nuclear programme” in Saudi, and in July last year Shaw Group said it was working with Toshiba and Exelon Nuclear Partners to pursue contracts for nuclear plants in
Saudi Arabia.

It said the group would pursue agreements for EPC and operation of nuclear power plants using Toshiba’s Advanced Boiling Water Reactor.

In early December 2010, it was reported that a delegation led by a top figure in the US Commerce Department brought together eleven US companies with Saudi officials to discuss nuclear cooperation.

And just days later, US giant General Electric (GE) announced it was looking to secure atomic power contracts with the KSA government.

Daniel Roderick, senior vice president of GE Hitachi Nuclear Energy, a joint venture between GE and Japan’s Hitachi, said that the company is looking to secure contracts to deliver reactor technology, nuclear services, and nuclear fuel cycle services to Saudi.

French connection
In Qatar, which holds almost 14 percent of the world’s known natural gas reserves, the government has signed a cooperation deal with France - which produces 78 per cent of its electricity from 58 nuclear reactors, and is busy exporting nuclear generated power to its neighbours - and an agreement with Russia that will allow the two nations to work together in fundamental and applied research, R&D, the construction and operation of nuclear energy production and research reactors, radioisotope production and their use in industries, medicine and agriculture.

Russia will also train personnel for Qatari nuclear power production facilities, as the Gulf country aims to add up to 5,400MW of nuclear capacity between 2011 and 2036.

“Deals with other nations are crucial – if you want to move forward quickly you need to draw on insider knowledge and transfer information from different nations and different providers,” says Ciszuk.

“This is especially important in the institutional and legislative build-up, and if you can manage the process efficiently, drawing on the experience of other providers around the world, the faster you can develop your own programme.”

In that spirit, Oman too has signed a deal with Russia, and established its own civilian nuclear energy agency. The agreement, which was inked in 2009, could see the two countries building reactors and conducting research together. Like all the Gulf states, Oman is a signatory to the Nuclear Non-Proliferation Treaty.

Bahrain, meanwhile, has said it aims to use nuclear power by 2017, although it has yet to develop formal agreements with other nations or make tangible progress on technical work.

It also faces significant obstacles as the country’s lack of hydrocarbon wealth relative to its neighbours means that Manama is likely to find financing difficult, while it also has less land upon which to build any plants.

“Bahrain will find it very tough, and hence I think they were mostly interested in a potential regional project, but that doesn’t look like it’s going to happen,” says Ciszuk at IHS. “If the GCC nations can’t deal with a monetary union, then running a nuclear project together isn’t going to be very easy.”

In hot pursuit
Bahrain is not alone in facing potential difficulties in its pursuit of nuclear power.

Ahmad Bishara, secretary general of Kuwait’s National Nuclear Energy Committee (KNNEC), said last September that his country could build four 1,000 megawatt (MW) nuclear reactors by 2020.

And in April last year, Kuwait and France signed an agreement to develop joint nuclear energy projects, giving French players a foothold in the region months after a consortium based around Areva, EDF and GDF Suez lost out to Korean competitors in their bid to build the GCC’s first nuclear power plants in the UAE.

But while KNNEC is currently undertaking a range of economic, geographical and legal studies to determine if nuclear energy is the best option to satisfy increased power demand, the problem has been exacerbated by decades of underinvestment in power generation.

This underinvestment has been blamed on Kuwait’s powerful but unruly parliament, which has proved a formidable obstacle to the implementation of infrastructure development programmes.

A decade-long tug-of-war between a royal family dominated government and an opposition-dominated parliament has resulted in a political standstill, and any nuclear programme could suffer an ignominious fate as it would have to be approved by parliament before it could be acted upon.

“Kuwait will find this very tough to develop, as for a nuclear programme you need to build a legal framework which is very strong and very advanced, and you need to build autonomous institutions which are strong and very independent,” says Ciszuk.

“There’s also a lot of legislative work to be done, and given that things tend to get stuck because one group is holding the government to ransom and extracting what they can, even between parliamentary groups, I really don’t see them managing that challenge any time soon.

It’s such a comprehensive challenge that it’s going to be very easy to derail.”

Likewise Saudi could also find it difficult to achieve legislative consensus – this is, after all, a country which has now been
waiting more than a decade for its oft-mooted mortgage law to be passed by the government.

Great uncertainty
Saudi Arabia will face several challenges, particularly on the legislative and constitutional side of things.

“There’s no legal and political culture in the region for having independent institutions – strong watchdogs which are completely independent and which can’t be overruled, for instance by personalised politics,” says Ciszuk.

“If you walk hand-in-hand with the IAEA to build a framework, which you have to do unless you want to be in the same situation as Iran, then you really need to deliver on the legal side,” he continues.

“In Saudi Arabia the legal system has been in the grip of the clergy for a long time. There are business and arbitration courts, but there is a strong sense that when the law is involved, all law comes from the Koran, which could create problems trying to standardise legal rulings in the kingdom.

There is great uncertainty, and that could be a very big challenge for the country indeed.”

Enriching Iran
While Gulf governments are determined to develop their own civilian nuclear programmes, they are also casting nervous glances across the Arabian Gulf at Iran, where talk has been less of boosting power capacity than of uranium enrichment and a nuclear bomb.

Nevertheless, the country has been waiting for years for the completion of the Russian-built 1,000MW Bushehr nuclear power plant, which is finally expected to begin generating electricity this year.

At the end of October Iranian authorities began injecting uranium fuel rods into the core of the plant, although recent reports suggest they are now being removed to conduct further experiments and technical work.

It is believed that Bushehr will become operational once all 163 fuel rods have been injected.

The Bushehr plant was delayed for years as Iran failed to pay Russian contractors, faced technical problems with the design of the plant and felt the full force of US sanctions, as well as Washington’s efforts to dissuade Moscow from aiding Tehran.

As completion nears the International Atomic Energy Agency (IAEA) is confident Iran will know how to handle its new toy.

“In Iran the issue is enrichment; people don’t know where the material is going,” Holger Rogner, the IAEA’s Nuclear Planning Expert said last year. “But in terms of safety, I think they have a well educated nuclear workforce, and I don’t think they have interest to leave a bad example for the world. If people adhere to their manuals and do their job conscientiously, things should be OK.”

Coming up - nuclear power world
Discussing investment, strategy and development for nuclear power operators, governments and their partners, the Nuclear Power World MENA 2011 conference gets underway at the Movenpick Jumeirah Beach Residence Hotel from 30 May to 1 June.

A platform to discuss the integration of nuclear power in the fuel mix of MENA utilities, the conference features speakers from around the globe, talking on a variety of subjects including economic benefits, the importance of timing and ways to plan in the absence of a sound regulatory regime.

For more information, and to register to attend, visit: www.terrapinn.com/2011/nuclear-power-mena.

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