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Leonard Hyman & William Tilles

Leonard Hyman & William Tilles

Leonard S. Hyman is an economist and financial analyst specializing in the energy sector. He headed utility equity research at a major brokerage house and…

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Nuclear Power's Resurgence In The Middle East

In his recent trip to Saudi Arabia, we have no doubt that US Energy Secretary Perry discussed that nations’ plans to embark on a 16 nuclear reactor building spree. The country, which suffers from electricity shortages, intends over two decades to add 17 GW of nuclear electric and 40 GW of solar generating capacity to its grid. Their grid presently has power generating capacity of only 55 GWs implying a virtual doubling of capacity.

To begin the process the Saudis will soon solicit bids for two reactors. We expect bids for these initial projects from at least five national consortia: South Korean, French, Russian, Chinese and American (Westinghouse).

In order for American firms to submit bids or these projects, the U.S. would have to amend its policy that prohibits export of technology for enrichment and reprocessing of uranium. Saudi Arabia’s energy minister, Hasham Yamani, head of the King Abdullah City for Atomic and Renewable Energy, stated at a recent conference that his nation intended to become entirely self-sufficient with respect to the production and enrichment of uranium. The minister stated that Saudi Arabia is believed to have at least 60,000 tons of commercially available domestic uranium ore deposits.

If Saudi Arabia proceeds with its plans, it would become the fourth nation in the Middle East region with a commercial nuclear power program.

In the United Arab Emirates, the first of four units at the Barakah nuclear power station is slated to soon enter commercial operation. These 4 APR 1400 units are being constructed by South Korea’s KEPCO at an estimated cost of $30 billion. But unlike the Saudis, officials in the UAE expressed no interest in uranium mining and reprocessing, services the plant’s builder is typically only too happy to provide.

Another four reactor project was announced in Egypt. The El Dabaa Nuclear Power Project will host four Russian-designed VVER 1200 reactors. This project is also projected to cost $30 billion and is 85 percent financed by the vendor, Rosatom. Related: Canadian Oil Prices Plunge To $30

The Iranians also have a Russian-design 1 GW nuclear reactor at its Bushehr power station. Interestingly, this unit began its life as a Siemens-designed unit whose construction was terminated due to the 1979 revolution in Iran. Eventually Russians engineers took over and completed the plant.

According to the World Nuclear Association, Iran may soon begin construction of two additional reactors at the existing site, with two more possible later. Iran also plans several smaller reactors at an eastern site called Makran Coast.

Iran and the U.S. have recently differed over Iran’s uranium enrichment and reprocessing efforts particularly at the Natanz facility. The U.S. appears eager to find the Iranians in violation of nuclear fuel reprocessing constraints signed under the Obama administration. Whether this will become a pretext for further escalation by the Trump administration remains to be seen..

.If we look across the Indian Ocean this nuclear revitalization continues. The Indian government, in its current five year plan 2012-2017, announced an ambitious 16 unit nuclear expansion. India is currently planning to produce 25 percent of its electricity with nuclear power by 2050. (Nuclear capacity would increase from 6 GW presently to 63 GW by 2050. India’s currently has about 331 GW of domestic power generating capacity.)

You can find Leonard Hyman's lastest book ‘Electricity Acts’ on Amazon

Pakistan, India’s neighbor, is also expanding its nuclear program with Chinese reactor designs. They presently have two Hualong One units under construction which are slated for commercial operation beginning in 2021.

The Pakistan Atomic Energy Commission, like neighboring India, has set a goal of nuclear energy providing 25 percent of the nation’s electricity needs. This requires a total of 8 new nuclear power generating sites containing four reactors apiece.

These numbers appear astonishing given that Pakistan’s existing electric power generating capacity is a mere 25 GW. But Pakistan has been a significant infrastructure beneficiary of China’s Belt and Road policy of economic engagement. From a practical standpoint, the real question is: why would a nation unable to meet existing demand for power (their present shortfall has been calculated at 5 GW) attempt to resolve existing power shortages with facilities incapable of entering commercial service for years if not decades?

All the countries cited who are aggressively pursuing new nuclear power generating capacity have one thing in common--high rates of population and electricity demand growth. These nations also face existing or expected power shortages over the near term. This is the opposite of conditions in the U.S., Europe and Japan. And some of these nations are choosing nuclear power for a significant part of their domestic energy needs so as to utilize domestic oil and natural gas resources for export.

If we look at all the countries in the Middle East and Asia either purchasing or exporting, essentially “trading” nuclear technology, it closely resembles the old “Silk Road”. These trade routes first brought Chinese silks to dressmakers in Rome more than a century before the birth of Christ and endured until Ottoman interdiction in the fifteenth century. Related: Adapt Or Die: Oil Majors In The New World

In addition to bringing highly sought after trade goods, the Silk Road also facilitated exchanges in culture, art and technology. On the downside, Silk Road traders likely facilitated the spread of bubonic plague that decimated Constantinople and Byzantium in the sixth century AD.

This present enthusiasm for nuclear power, though, does raise questions. These plants may not be competitive with alternative power sources unless the builders finance and subsidize them. This seems to be the strategy pursued by both China and Russia.

It is also unlikely, given the relatively long lead times for construction, to resolve existing electricity shortages that hamper economic growth. Perhaps nuclear power plants have become the new status symbols for developing nations, the modern equivalent of new steel mills so prized by developing nations after World War II. Or perhaps something more sinister is afoot.

Let us give the last word to highly respected Middle East energy and security analyst, Anthony Cordesman, currently of Washington’s Center for Strategic and International Studies: “There’s no question. Why do you have a nuclear reactor in the Persian Gulf? Because you want to have some kind of nuclear (weapons) contingency capability.” He sounds skeptical that it’s all about atoms for peace.

You can find Leonard Hyman's lastest book ‘Electricity Acts’ on Amazon

By Leonard Hyman and Bill Tilles

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  • Patrick Linsley on December 18 2017 said:
    Great. The absolute worst region to host nuclear power plants is also the most capitalized and interested in building them. Who me worry?
  • Bill Simpson on December 18 2017 said:
    Imagine if a group like the Islamic State had seized a working nuclear power plant with hundreds of tons of highly radioactive spent fuel stored there. You spread that stuff on the ground, and it is contaminated for thousands of years.
    As they proved many times during the war, they are eager to die for their warped 'cause', so dying of radiation won't bother them one little bit. All they need to do is shut off the cooling pumps and jam the control rods up, with the reactor running full power. Then blow up the containment dome if one even exists. Then what does anyone do to stop the radiation from escaping from the site, essentially forever.
    Talk about a stupid idea.
  • Mark Fox on December 27 2017 said:
    bill, even after about 40 years the toxicity of the waste is quite low. after 600 years the toxicity is almost nothing. so far only 15 people have died due to the Chernobyl raining radiation. zero people died from the fukushima radiation, but 1500 died from the forced evacuation ordered by the panicky Japanese government. 7 million people die annually from air pollution

    fear mongering is causing a delay in much-needed nuclear power development

    Global warming and pollution need to be reversed immediately.

    don’t get your panties in a twist

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