Abu Dhabi leads the race as MENA nuclear and renewables programmes take off

"Although nuclear power in the Middle East is normally associated with Iran’s and Israel’s alleged weapons programmes, the civilian dimension of nuclear energy is emerging as a major new strategic development and massive business opportunity throughout the MENA region" is the firm view of Alex Bakhshov, HFI’s UAE Managing Partner. According to Alex, "ahead of the pack is the progressive Abu Dhabi Government which is intent on seeing the emirate diversify its oil and gas energy focus to become a world class centre of nuclear and renewable power".

In November 2009 Abu Dhabi signed a BOT (Build, Operate and Transfer) contract with a consortium led by KEPCO (Korea Electric Power Corporation) and including Samsung, Hyundai, Doosan Heavy Industries, Westinghouse Nuclear and Toshiba for the construction of the first nuclear plant in the United Arab Emirates and beating stiff competition from the USA and France to the prize. The chosen location for the plant is Braka, which is situated in the west of the emirates. The plant will incorporate four nuclear reactors and upon completion will have a total capacity of 5,600MW (1).

The contract covers the first stage of a wider plan to secure stable power supply throughout the United Arab Emirates, where the existing electricity grid is proving unable to cope with soaring demand. Although nuclear energy was chosen as the primary solution for Abu Dhabi’s electricity needs, other options, namely renewables and use of natural gas, will be developed alongside the nuclear programme.

The Emirates Nuclear Energy Corporation (ENEC) is the government body that is in charge of the UAE’s nuclear programme. It also acts as the government’s investment arm and concludes strategic partnerships with foreign investors. At present KPMG is the financial adviser for the project, but ENEC is looking to appoint a second adviser. ENEC is currently in the process of identifying potential partners for long-term fuel supply, joint investments, training and education (2).

The development of a qualified local workforce is important to UAE – it is estimated that up to 2,300 staff will be required by 2020 (3) to ensure the programme’s success. An additional key issue for Abu Dhabi is the development of its strategy for the management of the full nuclear fuel cycle.

Abu Dhabi’s shift towards nuclear energy is not an isolated or new phenomenon in the MENA region. In 2006 UAE and five more Middle Eastern states (Algeria, Egypt, Morocco, Saudi Arabia and Tunisia) expressed interest in launching civil nuclear programmes (4). France signed a civilian nuclear co-operation agreement with Kuwait in April 2010 and is currently in negotiations with Saudi Arabia, which is very keen on investing in nuclear energy and renewables (5). In 2003 the SESAME project (Synchrotron-Light for Experimental Science and Applications for the Middle East) was approved by UNESCO. The project entails the construction of a synchrotron – a machine which will generate intense light beams for scientific research. The participating countries are Bahrain, Cyprus, Egypt, Israel, Iran, Pakistan, the Palestinian Authority, Turkey and Jordan, which is the host country (the SESAME centre is located not far from the Jordanian capital Amman) (6, 7). However, it is Abu Dhabi’s MASDAR future energy city project which is grabbing the spotlight, an initiative which combines renewable energy and clean technology investment funds, a carbon neutral city real estate project and a new university aiming to be a centre of educational excellence in the field.

Speaking at an Energy Industries Council roadshow in Aberdeen in July, regional director, Terry Willis, reported that approximately US$1.5 trillion of projects in the oil and gas, petrochemicals and power sectors across the region are presently being tracked by EIC. It looks very much like nuclear power and renewables will be an increasing part of the projects mix with the obvious opportunities for the energy sector supply chain.