10 POWERING THE MIDDLE EAST AND NORTH AFRICA …
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regions supplying raw materials and draw historically pro-Western countries further into the Chinese camp’. 87 In so doing, Chinese companies
will inevitably compete with Rosatom; China’s far greater financial clout
will allow it to offer better financial terms than Rosatom to compensate
for China’s relatively less established track record abroad. MENA countries interested in acquiring a civilian nuclear power plant may be forced
to choose between Russian or Chinese nuclear technology that could
‘lock-in’ long-term bilateral cooperation.
Other challenges for Rosatom emanate, ironically, from Russia itself.
Russia’s foreign policy such as the annexation of Crimea, supporting a
separatist war in eastern Ukraine, and election meddling have also resulted
in blowback in the form of ever-increasing financial and investment sanctions on the oil, defence, and banking sectors. According to one estimate,
Russia’s economy would have been 6% larger in 2018 if it were not
for sanctions. 88 Although the nuclear sector has been excluded from
sanctions, Rosatom may nevertheless find it difficult to borrow money
from Western banks to finance its expansion; it will also be hard pressed
to find partners with whom to form a consortium to bid for foreign
projects due to a potential expansion of the sanctions regime. Recurrent
domestic economic crises, due largely to unreformed structural rigidities
in the Russian economy and a poor business climate, also render Rosatom
vulnerable to reduced levels of state funding, without which developing
country clients would not be able to purchase nuclear reactors.
The speed of the global low carbon transition, facilitated perhaps by
images of starving polar bears or fire tornados in Australia, is the other
noteworthy landscape-level development. The sooner a global carbon
tax regime or other stringent restrictions on emissions come into being
and the larger the carbon tax, the more destabilizing the impact on
incumbent hydrocarbon-based energy regimes in MENA. In turn, this
will allow niche breakthroughs of nuclear and other low carbon energy
technologies.
At the niche level, one significant variable for the uptake of nuclear
energy concerns small modular reactors (SMRs). These are reactors with
not more than 300 MW of power generating capacity compared to the
1000 MW and more offered by conventional large reactors, which can be
constructed modularly (i.e. in factories) for assembly on-site. The advantages offered by SMRs include lower construction costs, minimal cooling
requirements, mobility, lower technical demands on grid capacity, faster
build times, a flexible modular system that can grow with electricity needs,
285
regions supplying raw materials and draw historically pro-Western countries further into the Chinese camp’. 87 In so doing, Chinese companies
will inevitably compete with Rosatom; China’s far greater financial clout
will allow it to offer better financial terms than Rosatom to compensate
for China’s relatively less established track record abroad. MENA countries interested in acquiring a civilian nuclear power plant may be forced
to choose between Russian or Chinese nuclear technology that could
‘lock-in’ long-term bilateral cooperation.
Other challenges for Rosatom emanate, ironically, from Russia itself.
Russia’s foreign policy such as the annexation of Crimea, supporting a
separatist war in eastern Ukraine, and election meddling have also resulted
in blowback in the form of ever-increasing financial and investment sanctions on the oil, defence, and banking sectors. According to one estimate,
Russia’s economy would have been 6% larger in 2018 if it were not
for sanctions. 88 Although the nuclear sector has been excluded from
sanctions, Rosatom may nevertheless find it difficult to borrow money
from Western banks to finance its expansion; it will also be hard pressed
to find partners with whom to form a consortium to bid for foreign
projects due to a potential expansion of the sanctions regime. Recurrent
domestic economic crises, due largely to unreformed structural rigidities
in the Russian economy and a poor business climate, also render Rosatom
vulnerable to reduced levels of state funding, without which developing
country clients would not be able to purchase nuclear reactors.
The speed of the global low carbon transition, facilitated perhaps by
images of starving polar bears or fire tornados in Australia, is the other
noteworthy landscape-level development. The sooner a global carbon
tax regime or other stringent restrictions on emissions come into being
and the larger the carbon tax, the more destabilizing the impact on
incumbent hydrocarbon-based energy regimes in MENA. In turn, this
will allow niche breakthroughs of nuclear and other low carbon energy
technologies.
At the niche level, one significant variable for the uptake of nuclear
energy concerns small modular reactors (SMRs). These are reactors with
not more than 300 MW of power generating capacity compared to the
1000 MW and more offered by conventional large reactors, which can be
constructed modularly (i.e. in factories) for assembly on-site. The advantages offered by SMRs include lower construction costs, minimal cooling
requirements, mobility, lower technical demands on grid capacity, faster
build times, a flexible modular system that can grow with electricity needs,