For Egypt and others, the alternatives to nuclear power hold more promise

The Economist The Economist

Why more Middle Eastern states are building nuclear power stations

EGYPT’S “long dream” is finally coming true, says Abdel-Fattah al-Sisi, the president. Not the dream of a capable government or reliable services—but the one in which Egypt’s nuclear-energy programme, started back in 1954, finally produces a watt of usable power. The government signed a deal with Russia on November 19th to build its first nuclear plant in Dabaa, on the Mediterranean coast.

Nuclear power has gone out of fashion in much of the world. The share of electricity generated by nuclear reactors has fallen to 10.8%, from a peak of 17.6% in 1996. More reactors have closed than opened of late. But the industry is not in crisis. China, Russia and India are all expanding their nuclear programmes. And several countries in the Middle East are pursuing nuclear power, creating what some have unfortunately called a “boom” in the region.

Some fear where this may lead—a nuclear-arms race pitting Sunni states, led by Saudi Arabia, against Shia Iran in pursuit of the bomb. A nuclear deal between Iran and the West, signed in July, has somewhat allayed those concerns. Nuclear fuel in the region remains mostly under the control of international suppliers. Moreover, there are legitimate reasons for the countries of the Middle East to seek alternative power sources. Demand for electricity is rising, along with pressure to lower carbon emissions; nuclear plants tick both boxes. Diversification away from fossil fuels must come sooner or later, say experts.

Short of oil and gas of their own, Egypt and Jordan in particular want nuclear power to shore up the security of their energy supplies, which have been disrupted by violence in the region. (Both have looked to Israel for gas, causing controversy at home.) They face big obstacles. The site chosen by Jordan for two planned reactors, also to be built by Russia, lacks water (necessary for cooling) and is opposed by local tribesmen. Egypt has assuaged its own locals, but previous plans have come to nought due to political upheaval and safety concerns. Financing is also a challenge for these cash-strapped countries, though Egypt claims that it will pay off its deal—over a period of 35 years from now—simply by producing electricity, which it will be able to buy at a low marginal cost.

The nuclear plans of Saudi Arabia and the United Arab Emirates (UAE) are more plausible. Both countries hope to free up oil and natural gas, which they now use for electricity generation, for export. To that end, Saudi Arabia has reached agreements with five countries, including Russia, to build 16 reactors by 2032. The UAE is already working with its partner South Korea on four planned reactors, which should begin supplying power in 2017. When the project is completed three years later, a quarter of the country’s electricity needs are expected to be met by nuclear energy.

The projects in Saudi Arabia, which burns oil it could more efficiently sell abroad to produce power, and the UAE, which got a bargain on its reactors, make some economic sense. But in general, nuclear energy is a bad deal for the Middle East. Most reactors would replace gas-fired plants, which are common in the region. But the nuclear sites hardly match up in terms of cost and productivity, say Ali Ahmad and M.V. Ramana of Princeton University. According to their calculations, a country like Saudi Arabia would benefit from nuclear power only if it could charge potential customers abroad several times the going price for its gas (otherwise, it is cheaper to burn it at home and forgo building reactors). Importers, on the other hand, should stick with gas-fired plants so long as the gas price does not rise dramatically.

Over the long term, as fossil fuels are depleted, nuclear power makes more sense. But only if you ignore the most bountiful—and safest—source of power in the region. It has been estimated that solar radiation could provide a country like Iran with 13 times its total energy needs—and decrease its dependence on Russia, which has withheld nuclear fuel in the past. Photovoltaic panels aren’t a spectacular target for terrorists. And the declining cost of solar power has made it an increasingly good deal. Indeed, it attracted more investment worldwide than nuclear energy last year.

Some in the region are thinking this way. Morocco, which currently imports electricity from Spain, is constructing one of the largest solar-power plants in the world for slightly less than the price of Jordan’s two nuclear reactors. It hopes to get 42% of its electricity from renewables by 2020—and to eventually export power to Europe. Saudi Arabia and the UAE have also splashed out on large projects; other countries in the region brag of big plans. Yet analysts say the sun-drenched Middle East, with its vast near-desert spaces, could be doing much more.

Less glamorous options also exist for countries looking to improve their power supplies. Fixing decrepit transmission lines in Iran would save more electricity than is produced by the country’s lone nuclear-energy plant in Bushehr. Egypt’s old power grid is in need of repair. But there is more prestige attached to nuclear power, which is often seen as a hallmark of technological progress, and which, of course, also allows for the development of skills that could one day be turned to bomb-making. “A few of these countries want to set up nuclear-power plants regardless of expense,” says Mr Ramana. In most cases it is a matter of national pride—and a poor use of resources.