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(November 2009)
The United Arab Emirates (UAE) was founded in 1971, comprising seven states including Abu Dhabi and Dubai. Abu Dhabi city is the federal capital of UAE, and Abu Dhabi emirate accounts for 86% of the land area of UAE, and 95% of its oil. Dubai is the UAE's largest city.
Background: Gulf Cooperation
Since commencing studies in collaboration with other members of the Gulf Cooperation Council (GCC), the UAE has proceeded with plans to set up on its own an ambitious nuclear power program with significant capacity being on line by 2020.
In December 2006 the six member states of the Gulf Cooperation Council (GCC) - Kuwait, Saudi Arabia, Bahrain, the UAE, Qatar and Oman - announced that the Council was commissioning a study on the peaceful use of nuclear energy. France agreed to work with them on this, and Iran pledged assistance with nuclear technology.
Together they produce 273 billion kWh per year, all from fossil fuels (2003) and 5-7% annual demand growth. They have total installed capacity of about 80 GWe, with a common grid. There is also a large demand for desalination, currently fuelled by oil and gas. A 2009 report projects GCC electricity demand increasing 10% annually to 2015, and desalination demand growing at 8%, implying the need for 60 GWe of new capacity by 2015.
In February 2007 the six states agreed with the IAEA to cooperate on a feasibility study for a regional nuclear power and desalination program. Saudi Arabia was leading the investigation and thought that a program might emerge about 2009.
The six nations are all signatories of the NPT and the UAE ratified a safeguards agreement with IAEA in 2003. In mid 2008 it appointed an ambassador to IAEA.
Nuclear power program in UAE
In 2006 the UAE produced 66.8 billion kWh gross, 98% of it from gas. It has about 18 GWe capacity. Electricity demand is growing by 9% per year and is expected to require 40 GWe of capacity by 2020.
In January 2008 three French companies Areva, Suez and Total signed a partnership agreement to propose to UAE the construction of two EPR units there. Suez and Total would each invest up to 25% of the project with Abu Dhabi entities providing at least 50%. Suez would be operator, Areva would supply the plant and manage the fuel. Total and Suez are well established in the region and together operate a power and desalination plant for Abu Dhabi, 100 km west of Dubai. The consortium's first EPR would not be operating before about 2017. In May 2009 it was reported that EdF had joined this consortium.
In April 2008 the UAE independently published a comprehensive policy on nuclear energy. This projected escalating electricity demand from 15.5 GWe in 2008 to over 40 GWe in 2020, with natural gas supplies sufficient for only half of this. Imported coal was dismissed as an option due to environmental and energy security implications.
Nuclear power "emerged as a proven, environmentally promising and commercially competitive option which could make a significant base-load contribution to the UAE’s economy and future energy security."
Hence 20 GWe nuclear is envisaged from about 14 plants, with nearly one quarter of this operating by 2020. Two reactors are envisaged for a site between Abu Dhabi city and Ruwais, and a third possibly at Al Fujayrah on the Indian Ocean coast.
Accordingly, and as recommended by the IAEA, the UAE established a Nuclear Energy Program Implementation Organization which set up the Emirates Nuclear Energy Corporation (ENEC) as an Abu Dhabi public entity, initially funded with $100 million, to evaluate and implement nuclear power plans within UAE (or specifically in Abu Dhabi emirate, which comprises 86% of the land area of UAE).
The UAE will "offer joint-venture arrangements to foreign investors for the construction and operation of future nuclear power plants" similar to existing Independent Water and Power Producer structures which have 60% owned by the government and 40% by the JV partner(s). The UAE is setting up a model of managing its nuclear power program based on contractor services rather than more slowly establishing indigenous expertise.
The UAE has also resolved to forgo domestic enrichment and reprocessing, and "to conclude long-term arrangements …. for the secure supply of nuclear fuel, as well as the safe and secure transportation and, if available, the disposal of spent fuel via fuel leasing or other emerging fuel supply arrangements."
The UAE invited expressions of interest from nine companies for construction of its first nuclear power plant. ENEC reduced this to a short list of three and sought bids by mid 2009. It is intended that a contract with one will be signed late in 2009 for an initial power plant. As well as Areva’s EPR promoted by the consortium described above, the GE-Hitachi ABWR and Korea's APR-1400 PWR technology are reported to be under consideration. The last group is led by Korea Electric Power Co, and apparently involves Samsung and Hyundai, as well as Westinghouse. The UAE has expressed an intention to standardize on one technology.
ENEC has appointed the global full-service program management, engineering, construction and operations firm C2HM Hill to manage the UAE's plans for bringing nuclear power to the country.
A construction start on the first unit is planned for 2012, with it coming on line in 2017. It will be financed by the state, without the need for loans, though outside equity partners remain a possibility. The construction contracts are expected to total some $20 billion. By 2020 UAE hopes to have three 1350-1650 MWe nuclear plants running and producing electricity at a quarter the cost of that from gas.
The USA signed a bilateral nuclear energy cooperation agreement with the UAE in January 2009 and South Korea signed one in June. The UK and Japan have signed Memoranda of Understanding on nuclear energy cooperation with UAE. France has a nuclear cooperation agreement with UAE.
In August 2009 the UAE advised the IAEA that it was ready to join the IAEA Convention on Nuclear Safety, and the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management.
In October 2009 the Federal Law Regarding the Peaceful Uses of Nuclear Energy was signed into effect, providing for development of a system for licensing and control of nuclear material, as well as establishing the independent Federal Authority of Nuclear Regulation to oversee the whole UAE's nuclear energy sector, and appointing the regulator's board, headed by a senior US regulator. The law also makes it illegal to develop, construct or operate uranium enrichment or spent fuel processing facilities within the country's borders.
ENEC is expected to be formally established as an investment vehicle in November. As well as overseeing development of the nuclear program, it will act as a government investment arm by making strategic investments in the nuclear sector, domestically and internationally. This is likely to include taking a significant stake in the successful bidder, though that is not a condition or criterion in the bidding process.
Non proliferation
The UAE is a signatory of the NPT and it ratified a safeguards agreement with IAEA in 2003. In 2009 it signed the Additional Protocol.