Going Nuclear in the Gulf

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Going Nuclear in the Gulf Jonathan Hanahan

KUWAIT In January 2010 Kuwait signed a cooperation agreement with France to develop nuclear energy. The renewable twenty year accord involves the exchange of information, training of personnel and the supply of nuclear equipment and facilities. ‘After signing, we will be starting discussion, sharing information in such a way that the Kuwaitis will make their own decision in how to move forward.’ Bernard Bigot, chairman of France’s Atomic Energy Commission. Reuters, December 29, 2009

Iran

Kuwait

Bahrain Qatar Saudi Arabia UAE

Oman

KSA France and Saudi Arabia said earlier this year they were close to finalizing a civilian nuclear energy cooperation agreement. The United States also holds an agreement with Saudi Arabia, and Russia is interested in helping the world's top oil exporter to develop nuclear energy as well. Reuters, December 29, 2009

QATAR ‘[Development of nuclear energy plants] is less economically viable now, and less attractive. The potential costs are changing with the turmoil in financial markets, the economic slowdown and development of alternative fuels,’ Yousuf Janahi, Manager of Business Development at Qatar’s state-owned power company Kahramaa, said. It is unlikely a reactor will be in operation before 2018 should Qatar be interested in developing a nuclear program. Reuters, December 29, 2009

UAE In December the UAE inked a deal with a South Korean consortium headed by KEPCO for construction and operation of four nuclear reactors, the first of which will become operational by 2017 and the rest by 2020, generating 5600MW of power. Representatives said they hope to develop more nuclear projects beyond 2020 and plan to generate 25% of their energy needs atomically. Reuters, December 29, 2009

OMAN Russia and Oman signed an agreement in June 2009 on nuclear energy cooperation that could see the two countries building reactors and conducting research together. The document was signed by the Deputy Head of Rosatom, Nikolai Spasski, and the Secretary General of Oman’s foreign ministry, Badr Al-Busaidi. Times of India, June2, 2009

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UAE to donate 320 megawatt power plant to Pakistan. (Khaleej Times, July 6 2009)

BAHRAIN Bahrain signed a cooperation with the United States in 2008 agreeing to rely on international markets for any future nuclear plants as opposed to domestic fuel enrichment. AFP, March 24, 2008

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Adding nuclear power to its energy portfolio will also strengthen the UAE’s control of energy flow both within and outside the region. Excess electricity generated by the UAE plants could soon make its way to homes and businesses across the country’s borders on the $1.4 billion regional grid project signed in July 2009. This power trading agreement among the GCC countries enhances the opportunity to exchange excess energy region­ ally, expanding (and diversifying) on its current role as global energy exporter.6 ‘With the nuclear project on its way now and other reactors expected to come, the UAE will be able to both meet do­ mestic demand and have excess to export both electricity an oil’, said Nkong-Njock, a consultant to the UAE’s nuclear project.7 Encouraged by the environmental and finan­ cial potentials nuclear power presents, other Gulf nations are following suit. Kuwait recently signed a renewable twenty-year cooperation agreement with the French nuclear powerhouse Areva – which will begin training local personnel and allow delivery of nuclear equipment for future production8 – and Saudi Arabia, Bahrain, Oman and Qatar have also signed similar agreements to instigate their own projects.9 So do these plants – and future ones – signify a shift in the regions international role as sustain­ able leaders, or simply a continued presence as chief energy exporters? Electricity from nuclear power will help reduce the Gulf’s reliance on burn­ ing fossil fuels10 but not the world’s, and we should not expect a slow in extraction of their finite reserves. ‘Oil demand is on the rise and will con­ tinue to rise even more in the future and if prices remain at $75 a barrel or above, I expect that the UAE would massively increase exports’, said Christian Koch, Director of International Studies at the Gulf Research Center.11 This decreased local reliance will only increase their sustainable with­ drawal limit of oil in the next ten years from 2.7 to about 3.3 million barrels per day.12 While the world Al Manakh 2

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In the oil and gas rich Gulf, energy export has always been big money; it provides two thirds of the region’s income. Plans for nuclear power, among other sustainable energy production planned for the region, are not only seen as an answer to global calls to reduce reliance on fossil fuels, but also a means of continuing the region’s role as an energy exporter•. But will new alternative practices help shift the focus away from the per­pe­ tual mining of non-renewable resources, or simply add to available energy export so important to the finances of the region? Does saving the envi­ ron­ment in the Gulf simply fuel its deterioration through­out the rest of the world? Or to flip this question around, does the region’s ability to change course and export more fossil fuels only heighten the fact that other places in the world, including the supposedly more environ­mentally in tune West, are nowhere near prepared for the end of oil? In December 2009, the UAE became the first Gulf nation to become nuclear power generators when it inked the first official contract for the con­ struction and operation of four nuclear power plants with a South Korean consortium headed by KEPCO. The first of these plants will come on line in 2017; all four should be operational by 2020. The reactors, which will generate 5600MW a year,1 are only the first step of a plan by the UAE to offset their reliance on local reserves of oil and gas for local energy production by 25% or more.2 Repre­sen­ta­tives from KEPCO have said they foresee many more con­ tracts for additional reactors beyond 2020.3 Though the pros and cons of nuclear energy are continually debated,4 its benefits in terms of combating climate change are encouraging. The decreased carbon emissions, thanks to these plants, will have a favorable environmental impact if one is measuring the country’s per capita carbon footprint. Government figures suggest that these new reactors alone will reduce the country’s carbon footprint by 32 million tones a year, a number equivalent to the total carbon footprint of Bahrain.5

IRAN In a speech marking the 31st anniversary of the Islamic Revolution in Iran, President Ahmadinejad declared Iran was a ‘Nuclear State’. ‘We have the capacity to enrich uranium more than 20% or 80%, but we don’t enrich because we don’t need it’, Ahmadinejad said. He went on to warn the West: ‘please pay attention and understand that the people of Iran are brave enough, that if it wants to build a bomb, it will clearly announce it and build it and not be afraid of you.’ New York Times, February 11, 2010


Kuwait Al Zout

Alladhill

Bahrain Jazrah

HVDC

Qatar

Ghunan

Doha South

Saudi Arabia

Al Fouhai Salwa

M’Hadah Silaa

U.A.E

UAE Electricity Demand vs. Committed Output 50000 45000 40858 40000 35000

33500

Mw

30000

28601

25000

Sources: Policy of UAE Evaluation & Potential Development of Peaceful Nuclear Energy, The National, December 2 2009

Oman

20000 Total UAE Commited Capacity*

15000

Increased Output based on UAE Nuclear plans**

10000

Additional Future Energy Sources***

5000 0

10 Year Energy Demand Fore`cast Forecast Adjustment**** 2006

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1 Known volumes of natural gas in the region could only provide adequate fuel for 20,000-25,000MW of electricity by 2020, Policy of the United Arab Emirates on the Evaluation and Potential Development of Peaceful Nuclear Energy. 2 All Gulf countries rank near the top of per-capita energy consumption thanks in large part to desalination for fresh water supply. 3 Amena Bakr, ‘UAE to Sell Nuclear Power, Free More Oil for Export’. At: http://www.arabnews.com (accessed December 30, 2009). 4 Pros: Availability, reliability, and no CO2 emissions. Cons: up front cost and time and the disposal of nuclear fuel. 5 Chris Stanton, ‘Nuclear Programme Will Clean Up the Skies’, The National, January 11, 2010. 6 Amena Bakr, ‘UAE to Free More Oil to Export, Sell Nuclear Power’. At: http://www.reuters.com (accessed December 29, 2009). 7 Idem. 8 Fiona MacDonald, ‘Kuwait, France Sign Pact to Develop Nuclear Energy’. At: http://www.bloomberg.com (accessed January 14, 2010). 9 Daniel Fineren and Simon Webb, ‘FACT BOX – Nuclear Power Plans in Africa, Middle East’, http://www.reuters.com (accessed December 29, 2009). 10 ‘The Saudi oil minister has said the kingdom needs to rein fast growing power demand which could dent future crude exports’. At: http://Zaywa.com, (accessed December 14, 2009) 11 Amena Bakr [See Note 6]. 12 Nadim Kawach, ‘UAE’s Nuclear Project will Save its Oil Wealth’, Emirates buisness24|7, December 30, 2009. 13 From Zawya Projects. At: http://www.zawya.com/projects/ project.cfm?pid=290107114545&cc.

Saudi Aramco Update: ‘Every country has the right [to nuclear technology] as long as they are [Non Proliferation Treaty] signatories’, said the director of Saudi’s Atomic Energy Research Institute. The message from Aramco has the country’s power and water industries – the largest domestic consumers of oil – worried about the future. ‘Saudi Arabia will need aid in another 50 years if we continue on this path. We don’t want to be another African country looking for aid.’ (zawya.com, October 13, 2009)

‘Saudi Arabia aspires to export as much solar energy in the future as it exports oil now.’ Ali Al-Naimi, Minister for Petroleum and Mineral Resources. (Arab News, September 23, 2009)

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* Based on known volumes of available Natural Gas Reserves. ** UAE/South Korea Nuclear deal expected to output 5600MW of Electricity by 2020. More plants are also expected after 2020. *** WAM news agency: ‘The Emirates would increase power generation capacity by 81 per cent over the next decade to about 33,500MW.’ **** The Government adjusted their original forecast in December 2009, minimizing it by 30 percent and stating ‘the recent global recession will have long lasting effect on the local economy’.

taneously they con­tinue to promote irresponsible consumption of non-renewable resources in other countries. Simply because they are used beyond the borders of the gulf does not make it any more sustainable than consuming them at home. A truly commendable financial and sustain­able strategy would be one that limits the reliance on oil export for income, hence influenc­ing other nations to also contemplate their sources of energy and inevitably limit the global consumption of fossil fuels. The final verdict on the implementation of these new ‘clean’ energy sources must take into effect its entire cradle to grave footprint; both locally and internationally.

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hears calls for reducing fossil fuel usage, the UAE is doing just that, and exporting it right back to the places where those calls are coming from but not being heeded. With additional reserves of oil leaving the country via tankers and pipelines, and new grids for exchange of electricity soon to be supple­ mented with the surplus from future nuclear plants, the diversification of the UAE’s energy portfolio suggests this shift to more abundant sources of power generation will only increase its role as fossil fuel exporters, not reduce it. The nuclear power initiative• is an essential step in the Gulf’s responsible presence on the world stage but it is also following the lead of other practices in the area which not only bode envi­ ronmental savings, but possibilities of increased financial gains. The Abu Dhabi Future Energy Company has invested more than $2 billion in a carbon capture and storage system for the master plan of Masdar. This system is expected to cut the carbon dioxide emissions of the UAE by as much as half in the next thirteen years. There are plans to capture CO2 from numerous local industries, including a gas-fired power plant, an aluminum smelter located at Taweelah, and a steel mill located at Mussafah. After transferring the CO2 through a new networked pipeline, it is injected into oil fields, boost­ing crude production by up to 10%. This process also helps recover trapped natural gas that has previously been pumped into the earth to further enhance the extraction of oil.13 Nuclear power – and carbon capture – are two examples of new investment schemes within the region, a shift from towers and extravagance to infrastructures of sustainability. Other alter­ native sources are also being investigated for their local and export potential and we should soon expect them to come online not simply as alter­ natives, but export opportunities•. News of invest­ ments in massive solar harvesters in North Africa are ru­mored to be taking shape but the ‘two birds with one stone’ tactic is not yet viable in these other forms of sustainable energy. This doesn’t mean we shouldn’t expect investment leaders to find some way to turn a profit from it soon. It is still unclear if we should praise these projects and the region’s new commitment to sus­ tain­able practices intended to address the pollu­ tion stricken region, or simply com­mend them as ‘out­side the box’ investment and financial strat­ e­gies? The ‘sustainability’ of alternative energy projects like these is called into question if simul­

Source: GCCIA/Reuters

GCC Linked Electricity Grid


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