Gas aplenty, but UAE opts for nuclear – a lesson to be learned?

Dr Ziggy Switkowski (former CEO of Telstra, Optus and Kodak, recently retired Chairman of ANSTO, and now Chancellor of RMIT University) recently had an excellent article published in the Australian Financial Review. Unfortunately, there is no online version available, so for those who missed the print edition, bad luck…

Well, that is until I emailed Ziggy and asked if he would mind me posting a version on BraveNewClimate… he said okay, and so here it is!

The comparison he draws between the United Arab Emirates and Victoria (Australia) is both fascinating and pertinent. See what you think. Oh, and I love that last sentence. I’ll be filing away that one for future use.

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Oil (and gas) aplenty, but UAE opts for nuclear

The largest commitment to new nuclear energy in this past year was made by the United Arab Emirates which placed an order for four reactors with a consortium of South Korean companies. There are some aspects to this decision which have relevance to the debate about nuclear power in Australia, and a comparison with the state of Victoria is especially revealing.

The UAE shares borders with Qatar, Saudi Arabia and Oman and a 650km coast line along the Persian Gulf. Made up of seven states, the UAE covers an area of about 84,000 square kilometres and is home to about 5 million people producing $400 billion in GDP (a fifth of which are oil exports). By comparison, Victoria covers nearly 240,000 square kilometres, has a population of 5.6 million and a gross state product near $300 billion.

UAE produces about 70 Terawatt hours of electricity annually, almost entirely from gas. Victoria produces about 50 TWhrs primarily from coal. Both economies are totally dependent upon fossil fuel and produce similar amounts of global warming greenhouse gases. For many key energy metrics, the UAE and Victoria might be interchangeable. Yet their strategies to meet future energy needs diverge dramatically.

In 2007, the Gulf Cooperation Council made up of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE undertook a study of the peaceful use of nuclear energy. These six member states share a common electricity grid, a hot dry climate and so confront similar needs for more energy to power desalination plants, air conditioning and so on, as well as to support strong regional economic growth. They are all signatories to nuclear non-proliferation treaties and other safeguard agreements.

From this and other UAE studies, nuclear power emerged as “a proven, environmentally promising, and commercially competitive option which could make a significant baseload contribution to the UAE’s economy and future energy security”.

The UAE is the fifth largest oil producer in the world, is in a gas-rich geography with global leader Oman as its neighbour, and is a desert where solar energy might be favoured.Yet the preferred path was introduction of nuclear energy sufficient to generate 20% of UAE needs by 2020 and up to 50% by 2050. There is no carbon price in the Middle East to discourage fossil fuel use yet key economies are making considered decisions to introduce nuclear power.

While some Australian commentators argue against nuclear energy because ‘we have better options such as solar energy’, when countries undertake careful risk adjusted analyses of the merits of all options, nuclear power compares very well. Similarly, it’s not hard to identify countries with an abundance of wind which are increasing their commitment to nuclear for the same reasons: nuclear technology is well understood and proven, reactors run 24/7, they couple into electricity grids seamlessly, and produce baseload electricity at competitive costs.

Specifically in the UAE case, four identical reactors with a total capacity of 5.6 GWe (this is half of Victoria’s current capacity) were ordered at a price of $20.4 billion. The suppliers formed a consortium including familiar names like Samsung, Hyundai and Doosan led by the Korean Electric Power Company.

After evaluating ten possible locations, a single site has been selected for all four reactors – Braka, a westernmost coastal city near Qatar and the Saudi Arabian border, and 300km from the UAE’s largest city, Abu Dhabi (population 1.7 million). Braka was chosen because of its access to coastal water for reactor cooling, the presence of existing energy infrastructure, stable seismic history and location in a sparsely populated area (akin to much of the east coast of Australia).

Construction is to start next year with the first reactor producing electricity in 2017, and all four online by 2020. A commitment to tight construction schedules was a defining feature of the winning bid and reactor build times are now routinely quoted at less than five years in many places around the world.

The plant is substantially financed by the state but will have Korean equity partners. Similar to existing public-private partnerships in water and power, UAE anticipates an eventual 60%-40% ownership split between its government investment arm and JV partners.

In this UAE case, we have a complex economy approaching energy strategy in a considered but expeditious way, evaluating a number of available technology platforms against the requirements for clean electricity, energy security, matching of capacity to strong demand growth, future proofing and so on. Nuclear energy emerged as central to the solution.

A similar approach in Victoria would probably point to coastal Gippsland as the preferred location of the first 2-4 reactors. As nuclear capacity is built, older coal-fired power stations could be closed and GHG emissions sharply reduced. Proximity to the 500kV transmission system also offers the potential to export electricity to NSW and through western Victoria to SA.

It’s simple really.

Yet in Australia we’re still debating about whether to have a debate about nuclear energy.

Ziggy Switkowski is chancellor of RMIT University and recently completed his term as chair, ANSTO.

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I’d written a little about the UAE situation in an earlier BNC post:

Korea has focused attention on its APR-1400 design, with domestic overnight costs of $2,333/kW. A recent contract for $20.4 billion has been signed with Korean consortium KEPCO to build four APR-1400 reactors in the United Arab Emirates, at a turnkey cost of $3,643/kW. This price is notable considering that it is offered under near-FOAK conditions, because these will be the UAE’s first nuclear plants.

It’s certainly a case study that bears serious consideration for the Australian government. Message: Choose nuclear over gas!

Finally, for those who didn’t notice my Twitter feed, I’ll be featuring on ABC TV’s show “Big Ideas” on Tuesday (ABC1 at 11am — short excerpt) and Saturday (ABC News 24 at 1pm for an extended 1 hour version). It’s based around my TCASE series run with the RiAus — specifically, the sustainable nuclear power event. You can watch a 7 min preview clip here on the web. Be sure to tune in, and tell your friends!