Arab states and nuclear energy: Necessity or geopolitical status symbol?

The most explosive region in the world is going nuclear. But, tensed geopolitical environment and presence of non-state actors such as the Islamic State group [IS] al-Qaeda, and other extremist organisations make the nuclear power development controversial.

Moreover, the associated costs, the rise of more affordable renewable alternatives, and proliferation concerns could narrow the space for the widespread development of nuclear energy.

Despite political and security issues in the region and potential environmental hazards, which have downgraded the image of nuclear energy in the world, many Arab states are rapidly moving towards nuclear energy expansion.

Most nuclear programmes in the Middle East do appear to be connected to regional security competition so the turn to nuclear power by Saudi Arabia, and several other countries in the Middle East, raises the risk of a nuclear arms race.

Saudi leaders have said repeatedly, for example, that "whatever Iran has, we will have too."

Saudi leaders have said repeatedly, for example, that 'whatever Iran has, we will have too'

Growing energy needs and matter of prestige

The rapid growth of electricity and water needs and depletion of oil and natural gas reserves have created a need to develop nuclear energy potentials and Middle Eastern governments are using it as the main argument in their efforts to diversify their energy mix, which still heavily relies on oil and gas.

The Economist Intelligence Unit, for instance, forecasts a seven percent increase in the demand for energy in the region over the next 10 years.

The estimates of German conglomerate Siemens offer even greater cause for concern as it predicts that power demand in the Middle East will increase by more than three percent annually through 2035 and that the region will need to add more than 275 gigawatts of capacity – more than double what is now installed.

But advances in other energy technologies and the controversies surrounding Iran's nuclear programme are complicating the regional pursuit of nuclear power.

The Economist Intelligence Unit, for instance, forecasts a seven percent increase in the demand for energy in the region over the next 10 years

High costs

Despite obvious gains in regard to achieving greater security of supply of electricity and water, it is clear that nuclear development of Middle East will pose a heavy financial burden for the countries involved.

Carol Nakhle's study on Nuclear Energy's future in the Middle East and North Africa points out that given the already highly subsidised economies in the region, there are concerns about Middle Eastern governments making such massive investments in nuclear power.

It requires large, long-term investments in complex technologies and relies heavily on government support, and these projects will again require massive government subsidies. This makes purely commercial financing difficult to obtain.

Finally, operating such complex facilities will require hiring highly qualified (and mostly foreign) personnel. This may pose a problem for the poorer countries, although it may be the case even for rich but troubled GCC economies.

Read also: The Gulf Crisis: Fear and Loathing on the Arabian Peninsula

Saudi Arabia's plan, for example, to build 16 nuclear reactors which will produce 17GWe, or 15 percent of its power needs, by 2040, will come at an estimated cost of $80 billion, while UAE's Barakah Nuclear Energy Plant, comprised of four reactors and expected to go online in 2020, will cost some $20 billion.

However, experts from the field point out that all these cost estimates are likely to be revised upward. Although it is premature to make any conclusion about whether or not all of the Middle Eastern nuclear projects will be completed or not, it is clear that investments in nuclear programmes will put a significant pressure on public finances, which could be especially troublesome in the era of volatile oil prices.

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Finally, significant external costs of defending these plants against attacks, along with the costs of nuclear waste management and decommissioning, brings to the conclusion that nuclear power plants themselves can hardly compete against their alternatives.

Ali Ahmad, chief of the Energy Policy and Security in the Middle East Programme at American University of Beirut explained that unlike the dramatic decline of the capital costs of renewables, nuclear costs have risen mainly due to time overruns and technological adaptation to strict safety and quality control, which by the way, doesn't change the fact that nuclear power remains a risky endeavour.

According to Henry Sokolski, executive director of the Nonproliferation Policy Center and Dr Alexander G. Savelyev, the chief research scientist at Primakov National Research Institute of World Economy and International Relations, photo-voltaics are now being bid in the Middle East below two cents per installed kilowatt hour.

Moreover, concentrated solar power, which heats up sodium during the day and operates all night, is coming in well below eight cents. Nuclear, in contrast, is now pegged to cost roughly 11 cents.

Saudi Arabia's plan to build 16 nuclear reactors by 2040 will come at an estimated cost of $80 billion, while UAE's Barakah Nuclear Energy Plant will cost some $20 billion

Additionally, Ali Ahmad noted that "cost reductions in solar CSP and storage (variety of technologies) would further increase the penetration of renewables in the grid.

In our transition to a complete "green economy", the coupling between renewables, storage, and natural gas seems more economically sound," he told The New Arab.

So, will the rise of more affordable renewable alternatives, along with security and proliferation concerns slow down the development of the nuclear programs in the Middle East?

According to the Martin Malin, the Executive Director of the Project on Managing the Atom at the Belfer Center, nuclear energy is not likely to grow or spread quickly in the Middle East.

The primary reason is cost. High up-front capital costs make nuclear energy more expensive than readily available natural gas, even if the price of gas increases substantially.

The costs of solar and wind energy technologies are coming down quickly and present none of the safety, security, and proliferation risks associated with nuclear power. These risks also feed public reservations about nuclear technology in the Middle East region and beyond.

Matter of prestige

However, the policymakers are not always following the economics.

Many believe that one of the main reasons for pursuing nuclear technology, especially in the Gulf States, is primarily a matter of prestige and competition, particularly with Iran, so their nuclear ambitions may be understood as the security defence doctrine.

For Ali Ahmad, the decision to invest in nuclear power across the Middle East is not based on economic reasoning.

"In my opinion, the real reasons for deploying nuclear power in the region are the mixed perception of prestige and technological advancement as well as a means for geopolitical "rebalancing," particularly in the case of the Iran-Saudi rivalry," he told The New Arab.

A similar view is shared by William Tobey, a former US Deputy Administrator for Defense Nuclear Nonproliferation at the National Nuclear Security Administration from 2006-2009, and current Senior Fellow, Belfer Center for Science and International Affairs.

Tobey noted that "some states seem to see nuclear energy as a matter of geo-strategic prestige, even though other advanced technologies such as information technology or artificial intelligence offer far broader applications and greater economic benefits than nuclear technology, which is both old and a technological cultural-de-sac."

The real reasons for deploying nuclear power in the region are the mixed perception of prestige and technological advancement as well as a means for geopolitical 'rebalancing,' particularly in the case of the Iran-Saudi rivalry

Marco Giuli, a Policy Analyst in the Sustainable Prosperity and the Europe in the World Programme at the European Policy Centre (EPC), explained that as Middle East countries need to develop energy production fast and since they are conveniently located where both fossil fuels and renewables are cheapest, nuclear does not, in fact, represent a very appealing option.

"Nuclear development seems more as a way, for many countries in the region, to catch up with nuclear developments in Iran – and another means to conduct a multi-vectoral foreign policy in an era of uncertainty and shifts in the international system," he told The New Arab.

Renewables vs. Nuclear

Despite great potential, GCC countries have made little investment in renewable technology.

In the last two years, many new projects have been announced, but it remains to be seen how and when they will be materialised.

According to the Strategy& Middle East, investments within GCC's renewable energy is set to reach just $16 billion by 2020.

Still, there are major structural and institutional factors influencing the region's current underinvestment into renewable energy – such as generous fuel subsidies, unclear regulatory and policy frameworks that discourage the development of renewables.

Investments within GCC's renewable energy is set to reach just $16 billion by 2020

On the other hand, lowering the barriers to nuclear energy in the Middle East, according to Malin, will require major investments in technology, regulatory institutions, and education and training.

Some of this is happening. It will also require unprecedented regional cooperation to reduce fears that nuclear energy programmes in neighbouring states are not a cover for nuclear weapons development. Under the present political circumstances, such cooperation remains a remote prospect.

Giuli noted that the transition from civil nuclear power use to nuclear weapon production is not automatic and straightforward. And if all Arab countries were to commit to purchasing nuclear fuel from abroad, like the UAE and Bahrain, fears that proposed civilian programmes could evolve into weapons development would significantly diminish.

Read also: Denuclearising the Middle East

West in decline

Despite becoming expensive, uneconomical and obsolete, nuclear energy programmes are still relevant issue across the region.

Since the White House is very supportive of nuclear development, countries like Saudi Arabia and the United Arab Emirates are seizing the moment to build their own programmes.

The same goes for Russia and China, which are highly interested in exporting nuclear technology.

Nuclear development in the region is also a highly sensitive geostrategic issue, with global key players battling for greater influence over the Middle East.

Since the nuclear development is unimaginable without foreign expertise, nuclear diplomacy and politics are gaining their momentum.

A general belief is that Russia is far ahead of its peers, as its global share of nuclear power plant market has now reached 60 percent.

Russia has won contracts to build 34 reactors in 13 countries, with an estimated total value of $300 billion. After adding several Arab states such as long-term US allies Jordan and Turkey to its list of nuclear plant clients, Russia has proved that it is becoming an undisputed leader in the nuclear energy sector.

In addition, Egypt signed a memorandum with Russia in 2015, under which Moscow will extend cooperation in the construction of Egypt's first nuclear power station at El Dabaa.

In the case of Middle East, Russia is on the way to win nuclear power contracts with all countries except the United Arab Emirates, which cooperates with South Korea and Israel which is not a signatory of the Non-Proliferation Treaty.

Many predict that China will sooner or later become Russia's main competitor due to its growing know-how and export-orientated strategy

So, what makes Russian offers so attractive and does it mean that Russian technology and standards will become a leader in the nuclear sector?

The key to Russian success lies in the plants being priced 20 to 50 percent lower than their Western counterparts as well as in more than generous funding by Moscow and "full support" for projects undertaken by Rosatom.

Russia has been very active in securing private sector funds, which are operating abroad enabling Russia to construct, operate and own or partly own, nuclear plants abroad.

However, many predict that China will sooner or later become Russia's main competitor due to its growing know-how and export-orientated strategy.

A glimpse to the future

— AC Global Energy (@ACGlobalEnergy) June 20, 2018

Some believe that that once nuclear-friendly administration of US President Donald Trump leaves office, the nuclear power lever may not remain as attractive and available to the explosive Middle East.

According to Malin, the US policy in the Middle East has been so erratic under President Trump that the administration's policies on nuclear cooperation are lost in the noise.

In any case, US companies have not been very competitive as Middle Eastern countries consider their options and pursue contracts for nuclear development.

This situation is unlikely to change in the near term no matter who is the US president.

The absence of US nuclear policy engagement and companies in the Middle East may further undermine Washington's ability to shape their standards of non-proliferation safeguards, safety, and security developed and implemented in the Middle East.

Some environmental organisations as well as Western states, raised their concerns over the issue of nuclear fuel waste from newly constructed nuclear plants, especially in the countries that are newcomers in the nuclear energy club.

According to them, Russia has less strict standards and control of nuclear waste, which may pose a serious environmental and security threats in the already highly volatile region. Numerous political disputes in the region may impact the safety standards as well as security and standardisation throughout the nuclear fuel cycle.

According to Malin, if the states of the region could reach an agreement that no state will produce highly enriched uranium, or reprocess spent nuclear fuel, and that any enrichment of uranium will take place within a regional or multinational framework, then the spread of light water reactors for generating electricity in the Middle East would be less of a concern.

Dr Matthew Cottee, Research Associate, Non-Proliferation and Nuclear Policy Programme at International Institute for Strategic Studies states that there is a possibility that regional interest in nuclear energy will generate a common objective of safe and secure nuclear facilities, perhaps in the form of a regional organisation that could support the IAEA and work across the region to ensure certain standards of safety, safeguards, and security.

"However, ongoing political tensions in the region suggest this will be difficult to achieve, "he concludes.

Therefore, Ali Ahmad believes that preventing nuclear proliferation and eliminate the use of nuclear power due to its inherent security risks should be a shared global responsibility.

However, according to him, what the US can do is to help with providing incentives for countries to move away from nuclear power.

These incentives can be political such as by helping with reducing tension and building trust in the region and/or technical such as providing access to facilitated renewables financing and advanced American technologies, particularly in energy storage and help with upgrading the electricity grid.


Stasa Salacanin is a freelance journalist who has written extensively on Middle Eastern affairs, trade and political relations, Syria and Yemen, terrorism and defence.