10 POWERING THE MIDDLE EAST AND NORTH AFRICA …
273
between planning and operation, 42 this implied that nuclear energy would
be unable to meet electricity demand in the UAE in a timely manner.
Nuclear plants are also prohibitively expensive, costing at least three and
a half times more per megawatt hour than a solar PV plant and two and
a half times more than a combined gas cycle plant on a whole life-cycle
basis 43 Indeed, when asked in 1992 about nuclear energy in Egypt and
the $18–20 billion estimated cost for three or four reactors, Egyptian
President Hosni Mubarak cautioned that he ‘would be leaving a debt for
the citizens, a burden on the people. I cannot do this. I do not want to
add more burdens than the people can endure’. 44 Under Abdel Fattah
el-Sisi, however, Egypt was swayed by Russia’s offer of a low-interest loan
that would cover 85% of total construction costs of $28.75 billion, with
repayments commencing only after the commissioning of the last of four
reactors at the El-Dabaa plant. The economics of nuclear energy have also
been prohibitive for Turkey and account in part for its previous failure
to attract bids through international tenders. Its current nuclear plant
project at Akkuyu was only made possible by an intergovernmental agreement with Russia, whose state-owned company, Rosatom, will finance the
construction estimated at $20 billion.
In the eyes of the UAE’s energy regime, however, the high oil price
environment after the mid-2000s meant that revenues from oil exports
could easily underwrite the plant construction cost of over $24 billion.
The country’s GDP of $254 billion in 2009 when the reactor construction project was awarded was clearly in excess of the minimum GDP
of $50 billion for non-nuclear weapon countries that have ever built a
nuclear power plant. 45 Moreover, gas was (and still is) very affordable
since it was being imported into the UAE at below market prices; the
Dolphin Gas Project importing gas from Qatar fixed prices at US$1.30
per MMBtu although market prices were US$6–10 per MMBtu by the
time actual deliveries began in 2007. 46 Taking into account the project
lead time and high costs of $5–9 MMBtu for developing its domestic
sour gas resources, the purchase up to one-third of gas requirements to
make-up for the electricity shortfall while waiting for the nuclear plant to
come online seemed financially sensible.
The externalities associated with nuclear energy were also not an overriding concern for the UAE. One study found that these health and
pollution costs amounted to an improbably high 8.63 cents per kilowatt
hour on whole life-cycle basis; this is less than coal or oil, but more than
273
between planning and operation, 42 this implied that nuclear energy would
be unable to meet electricity demand in the UAE in a timely manner.
Nuclear plants are also prohibitively expensive, costing at least three and
a half times more per megawatt hour than a solar PV plant and two and
a half times more than a combined gas cycle plant on a whole life-cycle
basis 43 Indeed, when asked in 1992 about nuclear energy in Egypt and
the $18–20 billion estimated cost for three or four reactors, Egyptian
President Hosni Mubarak cautioned that he ‘would be leaving a debt for
the citizens, a burden on the people. I cannot do this. I do not want to
add more burdens than the people can endure’. 44 Under Abdel Fattah
el-Sisi, however, Egypt was swayed by Russia’s offer of a low-interest loan
that would cover 85% of total construction costs of $28.75 billion, with
repayments commencing only after the commissioning of the last of four
reactors at the El-Dabaa plant. The economics of nuclear energy have also
been prohibitive for Turkey and account in part for its previous failure
to attract bids through international tenders. Its current nuclear plant
project at Akkuyu was only made possible by an intergovernmental agreement with Russia, whose state-owned company, Rosatom, will finance the
construction estimated at $20 billion.
In the eyes of the UAE’s energy regime, however, the high oil price
environment after the mid-2000s meant that revenues from oil exports
could easily underwrite the plant construction cost of over $24 billion.
The country’s GDP of $254 billion in 2009 when the reactor construction project was awarded was clearly in excess of the minimum GDP
of $50 billion for non-nuclear weapon countries that have ever built a
nuclear power plant. 45 Moreover, gas was (and still is) very affordable
since it was being imported into the UAE at below market prices; the
Dolphin Gas Project importing gas from Qatar fixed prices at US$1.30
per MMBtu although market prices were US$6–10 per MMBtu by the
time actual deliveries began in 2007. 46 Taking into account the project
lead time and high costs of $5–9 MMBtu for developing its domestic
sour gas resources, the purchase up to one-third of gas requirements to
make-up for the electricity shortfall while waiting for the nuclear plant to
come online seemed financially sensible.
The externalities associated with nuclear energy were also not an overriding concern for the UAE. One study found that these health and
pollution costs amounted to an improbably high 8.63 cents per kilowatt
hour on whole life-cycle basis; this is less than coal or oil, but more than