January 8, 2010
The signature of a $ 20 billion contract, at the end of 2009, between the United Arab Republic and a South Korean industrial consortium under the leadership of the Korea Electric Company for the construction of four nuclear 1400 MW power plants marks a milestone in global energy cooperation:
· The UAE will be the first Arab country to enter nuclear power generation. Others like Egypt, Kuwait, Saudi Arabia and even Jordan have also declared their interest in covering some of their growing energy needs by nuclear reactors.
· For the first time, the South Korean nuclear industry openly defies established American, Japanese, European and Russian competitors, not only for the construction of the reactors but also for the supply of enriched uranium.
· For the UAE, the construction of the four reactors forms part of its long-term energy strategy. Though the country possesses 10 percent of global oil reserves, the government has concluded that oil is too precious to be burnt in power plants and be rather conserved, as long as possible, as a precious raw material for high value- added chemicals, fertilisers etc. It will therefore cover its domestic electricity needs from gas, nuclear, wind and solar sources. The ongoing construction of a $ 40 billion petrochemical complex, the world’s biggest, is to be seen as a crucial component of its long-term energy strategy.
The developments in the UEA should teach Europe at least four lessons:
· The Gulf countries, possessing by far the biggest oil and gas reserves, start realising that the time has come to use these more economically and switch to non-fossil energies wherever possible. That is a very positive signal for humanity and the climate.
· The Gulf countries will in the future transform more of their oil and gas production into base chemicals, from urea to polyethylene and export these instead of crude oil or LNG.
· The European nuclear industry will have to brace for a new, highly competitive player. It will have to join forces in order to keep up with the powerful Korean consortia.
· The time horizon for energy projects will stretch increasingly beyond 10-20 years, extending in some cases even to 80-100 years, as the nuclear arrangements between South Korea and the UAE demonstrate.
Brussels 04.01.10 Eberhard RheinAuthor : Eberhard Rhein