Guy El Khoury
A year ago, in March 2011, a tsunami swept parts of the eastern coast of Japan and caused a major accident at the Fukushima-Daiichi power plant, leading to widespread radioactive material leakage and a sharp increase in radioactivity in nearby areas. Being the most notable accident since Chernobyl, it restarted the debate on nuclear energy option both in Japan and around the world. In Germany, this debate soon led to a decision to terminate the federation’s civilian nuclear program with a commitment to develop renewable energy alternatives, as well as additional thermal power plants, to cover the energy shortfall. A similar debate on nuclear energy has also emerged in the Middle East and North Africa region (MENA) where a number of countries have been exploring nuclear energy option for years, but have not been able to turn their nuclear ambitions to realities due to their lack of technical capability, fear of nuclear proliferation, and lack of sufficient financial resources. This debate was further brought to the fore with the recent move by the United Arab Emirates (UAE) to develop a civilian nuclear program and the operation of the Bushehr plant in Iran, and has proven to be quite divisive with strong positions arguing for and against nuclear energy
Nuclear Energy: Cheap and Green
Proponents of nuclear energy argue that it offers a scalable solution to reduce the carbon footprint of electricity generation and that it generates energy at low costs. In 2009, France’s energy sector (which produces approximately 70-75% of its electricity from nuclear power plants) had a carbon intensity (emissions per unit of electricity produced) of approximately 80 kg CO2/MWh, one of the lowest in the world. France’s carbon intensity compares to approximately 400 kg CO2/MWh for California (where 11% of electricity is produced from non-hydro renewable energy and 46% produced using natural gas) and an outstanding 790 kg CO2/MWh for Kuwait where 70% of electricity was produced burning oil and refined products.
French government officials also regularly emphasize the fact that electricity tariffs in their country is amongst the lowest in Europe. A 2009 survey found that electricity in France is 35% cheaper than in neighboring Germany, at 4.75 Euro cents per kWh versus. 7.37 Euro cents per kWh (before tax). In fact, the economics of nuclear energy are such that fuel represents a small share of the electricity costs. the front-end costs (the cost of enriched uranium delivered to power plants) only account for 15 – 20% of total electricity costs - a much smaller portion than for fossil fuel technologies – with the remainder of the costs attributed to large upfront investments to build nuclear plants and decommissioning costs. Nuclear power plants also offer an additional cost benefit due to their longer operating periods. In the US for example, reactors operate on an average of 336 days equivalent per year compared to 270 days for coal on average. In MENA countries, other arguments further support the case for nuclear energy: Resource-rich countries such as Saudi Arabia could build reactors to free up natural resources for exports and generate additional revenues. Conversly, resource-poor countries such as Jordan could develop nuclear energy to reduce their dependence on fossil fuel imports as they strive to meet their growing electricity demand.
UAE Leading the Way, Saudi Arabia and Jordan Might Follow
In 2009, the UAE became the first country of the region to embark on the development of a civilian nuclear energy program. The UAE awarded a USD 20 Billion contract to a South Korean consortium to build four reactors with a total capacity of 5.6 GWe (one 1.4 GWe power plant coming online every year starting in 2017). Other countries of the region set up institutions to oversee their civilian nuclear program. None of these initiatives, however, translated into the development of large scale nuclear power programs. Egypt, for example, established a number of organizations to oversee the use of nuclear fuel for power generation since the 1950s and several plans were commissioned to develop a nuclear program but none has materialized so far. Similarly, Tunisian engineers recieve annual training on nuclear energy in French institutions, while Algeria operates two research reactors and has regularly discussed options to diversify its fuel mix including nuclear energy.
Yet despite these developments, Saudi Arabia and Jordan currently stand as the most serious countries considering the development of nuclear energy assets. In Saudi Arabia, the King Abdullah City for Atomic and Renewable Energy (KA-CARE) was set up by royal decree in 2010 and entrusted with the development of the kingdom’s long-term energy mix. Plans were announced to build 16 reactors or 22 GWe of power, representing approximately half of Saudi Arabia’s current electricity production capacity.
This turn to Nuclear energy may not come as a surprise given that Saudi Arabia is faced with a strong growth of electricity demand. The kingdom’s insufficient gas volumes have recently forced utilities to increasingly rely on inefficient crude oil to fuel their turbines,which grew by 260% between 2004 and 2010 and generates half of Saudi Arabia’s electricity. Officials esimate that the kingdom burned an average of 730,000 barrels a day of crude in its power plants from July to the end of September 2011.
In Jordan the debate over nuclear energy has recently intensified as disruptions of gas supply from Egypt exposed the country’s reliance on hydrocarbon imports. In its approach to tackle energy security, the government considered developing LNG terminals and nuclear energy. Jordan’s Atomic Energy Commission replaced the Nuclear Energy Commission in 2008 and is in charge of executing the country’s nuclear energy plans. The government is currently considering bids for the Engineering Procurement and Construction of its first nuclear reactors and has entered talks with different potential suppliers, indicating its desire to push forward its program. Jordan recently announced it had shortlisted two suppliers - AtomStroyExport and the Areva/Mitsubishi Heavy Industries joint venture – for the project.
Opponents and Concerns
Governments’ enthusiasm for nuclear energy, however, is not always matched with support from citizens. Kuwait, for example, recently scrapped its plans to develop nuclear energy in the face of strong opposition from civil society and disbanded its National Nuclear Energy Committee. Not surprisingly, concerns in Kuwait were mainly about risk of potential accidents. The Iranian Bushehr plant built on the other side of the Gulf regularly surfaced in news articles reflecting fears of nuclear fallout from any potential accident at that plant.
In Jordan, opposition to government plans increased recently as the country got closer to commissioning nuclear reactors. Opponents to nuclear energy often propose renewable energy as an alternative, arguing that renewables would ensure high levels of energy security, provide clean electricity, and most importantly entail no risks to humans or to the environment. They also argue that indirect subsidies that would be allocated to the development of nuclear energy (such as government loan guarantees to utilities and government funding of research programs) should rather be allocated to kick-start the large-scale deployment of renewable energy before technologies reach grid cost parity.
Central to the debate on nuclear energy is the issue of the final disposal of radioactive material, perhaps a key determinant in future policy-makers decisions given its long terms impact. It takes thousands of years for long-lived radioactive material before it reaches levels of radioactivity comparable to the natural background. Although other options are being researched to accelerate the decay of radioactive material, storage remains the main solution currently considered to deal with the existing stocks of spent fuel. The responsibility for the disposal of spent fuel typically lies within the hands of the country that produced the waste, and it requires long-term planning to ensure sufficient financing is available decades after the fuel rods are removed from reactors. Underground storage options are also subject to opposition from local communities near nuclear waste storage sites.
Learning from Fukushima
The development of civilian nuclear programs in industrialized countries took decades to mature, and was supported by strong national scientific institutions. Current activities of nuclear energy plants are governed by strict laws and standards enforced by empowered and independent regulators. Handling nuclear material requires high levels of safety and accurate accounting to ensure every single gram of fuel is tracked and kept in the right hands. Yet despite this precedent, the Arab countries’ approach to developing nuclear energy has tended to be geared to the acceleration of development plans and rapid execution. In many countries, this rapid execution is coupled by a reliance on third parties for supply and implementation of programs.
If there is one lesson that governments across the MENA should learn from the Fukushima accident, it is that developing a civilian nuclear program needs institutions capable of maintaining adequate levels of safety from the licensing of nuclear plants to their decommissioning and disposal of spent nuclear fuel. According to the standards set by the International Atomic Energy Agency, the moment a government decides to launch a nuclear power plant and the day the first nuclear plant is connected to the grid must be at 10 to 15 years apart. Implementing a nuclear energy program requires time, a tight regulatory framework, and institutional maturity.
Guy El Khoury is a management consultant based in Beirut with a focus on energy practice in the Middle East region. He can be reached at Guy [ a t ] Carboun [ d o t ] com.
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