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UAE’s Nuclear Power Pivot Comes At A High Cost

UAE Nuclear Power

The United Arab Emirates have just become the first Arab nation to operate a nuclear plant as its 5.6GW Barakah nuclear plant achieved criticality on its Unit 1 in the first week of August. The pressurized water reactor has received its operating license this February and has been in a test regime throughout the past 6 months, placating regional fears that the Arab Peninsula’s first nuclear plant might experience some difficulty in operation. The Barakah nuclear plant’s Unit 2 is expected to be fully ready by the winter season of 2020/2021, whilst Units 3 and 4 are nearing completion (construction works are 90% done), suggesting that the pioneering UAE reactor might become a steady part of the country’s energy matrix in the upcoming 1-2 years. The underlying question, however, is the cost thereof – was nuclear power a necessity for the Emirati economy?

The idea of utilizing nuclear energy within the Arabian Peninsula emerged in the mid-2000s when six member states of the Gulf Cooperation Council set out to assess the prospects of nuclear in the region. All of them, at that point spearheaded by Saudi Arabia, signed the Non-Proliferation Treaty by that point – in most cases the rationale for developing nuclear lied in rapidly increasing electricity needs on the back of surging populations. The UAE took on the task more zealously than the others and by late 2009 it had set up its Nuclear Energy Corporation (ENEC) and subsequently selected KEPCO’s bid to build four APR1400 reactors at the Barakah site. The total value of the contract rose to some $24 billion, almost $4 billion more than initially presumed.

The Barakah nuclear plant is located almost 300km from Abu Dhabi, much closer to the Qatari border than to major consumption centers in the UAE which would inevitably create some tension between the two states. Qatari media have reported on the Barakah plant’s lack of necessary safety measures, decrying the technological solutions chosen for it (amongst other things, no Generation III defence-in-depth reinforcements which could shield the object from potential missile attacks). Even before the September 2019 Abqaiq attack on Saudi Arabia, Qatar has filed a letter of compliant to the International Atomic Energy Agency (IAEA) claiming that the environmental risks of Barakah had not been assessed appropriately and that in case of a radioactive leak the plume would reach Doha in merely a couple of hours and would devastate the nation’s water supply. Related: Oil Markets Get A Major Reality Check As Demand Sours

Qatari objections notwithstanding, the choice to develop nuclear energy in a country that seems to be ideally suited to develop renewable sources of energy, primarily solar and wind energy, remains a somewhat peculiar one. Heretofore the United Arab Emirates have relied overwhelmingly on natural gas as the main source of electricity generation, providing some 97% of its electricity (the remaining 3% comes from solar and to a minuscule extent also from oil). Developing nuclear energy will aid the UAE to substantially decrease its carbon emissions, assumedly by 21mtpa in total, all the while providing electricity costing less than half of what natural gas does. It has to be noted, though, that as convincing as the emissions-curbing narrative is, developing renewable solar and wind energy would result in virtually zero emissions.

For the South Korean consortium, bringing Barakah onstream without any substantial hiccup would be an issue of increased importance as it remains the only currently existing export order in KEPCO’s portfolio. Moreover, KEPCO owns 18% of the project company (Nawah Energy Co.), the remaining 82% belongs to the Emirates Nuclear Energy Corporation (ENEC), thus its interest in the profitability of the nuclear plant will go beyond the construction and commissioning phases. Last but not least, rumours that KEPCO has cut corners around enhanced safety designs for the nuclear reactors (what the French AREVA’s then-CEO compared to a “car without airbags”) to render its bid the most competitive ought to compel the South Korean firm to carry out Barakah’s commissioning in a seamless manner.

Graph 1. United Arab Emirates’ Electricity Generation in 2000-2019 (in Terawatt-hours).

Source: BP Statistical Survey 2020.

The August 2020 commissioning of Barakah Unit 1 took place almost 3 years after the set deadline of 2017. Partially this is due to construction faults, mainly cracks in the reactor containment building, which were discovered first in Unit 3 in 2017 and then subsequently in all units in 2018. KEPCO has had similar problems with the same type of APR1400 nuclear design at home, not to speak of the 2012 South Korean forgery scandal which saw several control documents on provided nuclear components falsified by suppliers. Luckily there were no major issues heretofore with heat exchangers and condensers – one of the crucial parts of the reactor, considering that UAE seawater is around 33-34°C. It was against this background that the Emirati nuclear corporation has concluded its deals on nuclear fuel supply with France’s AREVA, Russia’s TENEX, Canada’s Uranium One and the Anglo-Australian Rio Tinto.

Beyond the realm of pure economics and unit price profitability, one of the main reasons why the Middle East boasts little to no nuclear assets (Iran is the only Middle Eastern country to operate a nuclear plant) lies in others’ nations concerns that such developments might spur a nuclear race in a region which has historically been beset by conflict. Following the Barakah plant’s commissioning, several regional countries have joined the club of “peaceful nuclear energy” – Turkey will start up its Akkuyu nuclear plant in 2023, Egypt’s El Dabaa plant is expected to be up and running by 2026-2027 and Saudi Arabia intends to build up a 17 GW nuclear portfolio by 2040. Should intra-regional fissures lead to another attack on energy infrastructure akin to the Abqaiq attacks, the consequences might be even more devastating.


By Viktor Katona for Oilprice.com

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