Interpreting Middle East Economic News and Analyzing Market Trends

Abu Dhabi starts building second nuclear reactor

Tomorrow Abu Dhabi, the largest of the seven Emirates and make up the United Arab Emirates, will start construction on the second nuclear power plant.  Construction of the first nuclear plant began last July and will not be operational until 2017.


The push towards nuclear power is yet another sign of the growing interest among Middle East oil exporters to find ways to save their oil for export rather than burn it locally.  Power demand is growing rapidly in these countries, mainly due to the huge government subsidies, making power use spike up while the cost to the consumer remains dirt cheap.


Abu Dhabi breaks ground on its second nuclear reactor tomorrow as it moves ahead with the construction of the Arab world’s first atomic power plant.

Yoon Sang-jick, the South Korean minister of trade, industry and energy, is set to visit the construction site at Barakah in Al Gharbia tomorrow for a ceremony in which he will be flanked by Emirati officials leading the work on the US$20 billion power plant, which it is hoped will meet up to a quarter of Abu Dhabi’s energy needs within the next decade.

The progress on the power plant is being closely watched across the world for a number of firsts.

It is the first, and so far only, nuclear contract South Korea has won overseas, although the country is eager for more nuclear projects.

The UAE is also the first nation to have embarked on nuclear power since the 1986 meltdown at the former Soviet Union’s Chernobyl plant.

Korea Electric Power Corporation, the state nuclear company, is the primary contractor for the four reactors scheduled to come online in Abu Dhabi between 2017 and 2020.

The first reactor, scheduled for completion in 2017 and which began construction last July, is taking shape as a massive crane lowers 3-metre steel rings in a stack to form the main dome of the reactor. The second reactor is at an earlier stage and ready for the pouring of the first safety-related concrete, the foundation of the reactor.

Earlier this year Emirates Nuclear Energy Corporation filed a 10,000-page construction license application for the third and fourth reactors. It was 1,000 pages longer than the application to build the first two reactors that was approved in July.

Two other milestones remain. The first is Executive Council approval for the plant’s financing, a package of Korean and American export credit, international bank loans and Abu Dhabi state funds.

A more long-term task is crafting a strategy for dealing with radioactive waste over hundreds of thousands of years. Options include building an underground waste repository in the UAE, as is being tested in Sweden, Finland and France; building a shared one for the GCC nations; and sending the waste back to the country that supplied the fuel, a yet-untested practice called fuel leasing.

Read the full story from The National.

Nuclear power is proving very attractive to Middle East oil exporters because of their massive energy subsidies in their domestic market.  Rather than try to address waste and high consuption rates, which will upset local populations, nuclear power is the answer.  It pushes off the discusion on high energy consuption for a few more years.  Saudi Arabia is also planning on building nuclear power plants.


Japan is also proving that it cannot stay away from nuclear power.  It will have its nuclear plants back in operation soon as the reality of its energy situation became obvious.  Read the story here from the New York Times.