Is this the UAE’s most important megaproject?

The Barakah nuclear power project, once fully operational, will supply a quarter of the country’s energy needs.
Is this the UAE’s most important megaproject?
By Ed Attwood
Fri 18 Sep 2015 04:06 PM

Of all the UAE’s huge infrastructure projects, the one that’s actually most important tends to get the least headlines. It’s not an all-singing, all-dancing mall, an island made from land reclaimed from the sea, or even a supertall tower.

It’s being built in Barakah, a hamlet about two hours’ drive west of Abu Dhabi. When up and running, the four reactors of the UAE’s nuclear power plant programme will be producing about a quarter of the country’s energy needs.

Back in 2010, it was considered as something of a shock when South Korea’s then president, Lee Myung-bak, arrived in Abu Dhabi to sign off a $20bn (later revised to around $30bn) contract to build the plants, beating off highly fancied completion from a French consortium and a US-Japanese team that featured Hitachi and GE. South Korea’s domestic programme had an impeccable safety record, but it had never exported its nuclear plant capability, and the thinking was that the UAE would play it safe by signing up with countries with whom it had closer political and economic ties.

But at no point has the South Korean consortium that is building the Barakah reactors given the Emirates Nuclear Energy Corporation (ENEC) any reason to believe that the decision made five years ago was the wrong one. The overall programme passed the 50 percent completion milestone earlier this month, and the first reactor is three-quarters finished, and is scheduled to come online in 2017. Despite what some might have believed to be the consortium’s overseas inexperience, the Barakah programme is now the first in the world to be building four identical reactors at the same location.

Set this against disastrous programmes seen elsewhere in the world, and the UAE’s choice of partner looks like an even better bet. The third reactor in Olkiluoto, Finland, is not scheduled to come online until 2018, fully 13 years after a consortium including Areva — which had bid for the Barakah deal — broke ground. Areva thinks that losses on completion at that site, if indeed it is finished in three years’ time, could amount to over $5bn.

All this is well and good, but the estimated $30bn price tag is certainly not cheap. However, when set against the savings that the UAE is set to make from the removal or amendment of fuel and utility subsidies — estimated at up to $7bn next year alone, according to Standard Chartered — the rationale for nuclear power looks stronger than ever.

At the moment, Abu Dhabi’s rapidly rising demand for power is fulfilled almost entirely (99 percent) by natural gas, almost of a third of which is imported from Qatar. As well as the hefty baseload provided by nuclear power, the UAE is also planning for renewable power to make up 24 percent of its generation supply.

But the real holy grail could come in the form of solar desalination, which would make a hugely power-intensive, and thus expensive, process far more economical. According to reports in The National newspaper, four small pilot projects located near the Abu Dhabi-border are currently testing renewable energy desalination, with the hope that such technology can be commercialised and co-developed in conjunction with Masdar.

Is the UAE close to solving its energy future? There are still problems to be ironed out, not least the disposal of nuclear waste and the uncertainty over technology that is yet to be developed. But set against the difficulties that neighbouring Saudi Arabia is facing — with domestic oil consumption for power generation soaring and a seemingly paralysed nuclear and renewable energy programme — the UAE’s early decision to take the nuclear route looks prescient indeed.

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