Nuclear Energy: An Answer To Growing Energy Demands In The GCC

However, due to rapid economic development and energy subsidisation, the GCC countries' energy exports have become undervalued, leading to high rates of domestic consumption. The Gulf nations have some of the world's highest per capita consumption and subsidy rates. In 2021, the International Energy Agency (IEA) estimated the GCC's fossil fuel subsidies at US$76 billion, or their collective US$1.7 trillion GDP. 

The GCC states rank highest globally in terms of fossil fuel subsidies per capita, resulting in record-high energy consumption rates per capita. Qatar has the world's highest fossil fuel consumption and subsidies per capita due to its small population relative to its massive liquified natural gas (LNG) production capacity. 

Saudi Arabia and the United Arab Emirates are turning their attention to meeting the challenge of replacing fossil fuel consumption and have the most ambitious nuclear energy plans. 

According to the World Nuclear Institute, in 2009, the Saudi government announced that it was considering nuclear power. A royal decree said, "The development of atomic energy is essential to meet the Kingdom's growing requirements for energy to generate electricity, produce desalinated water, and reduce reliance on depleting hydrocarbon resources." 

The King Abdullah City for Atomic and Renewable Energy (KA-CARE) was set up in Riyadh to advance this agenda as an alternative to oil and to be the competent agency for treaties on nuclear energy signed by the kingdom. It is also responsible for supervising work related to nuclear energy and radioactive waste projects. 

In February 2022, Saudi Arabia announced the establishment of the Nuclear Holding Company, which will act as the country's nuclear developer. While the UAE announced an investment of US$163 billion by 2050 to achieve half of its energy from nuclear power and renewables. 

Cost-Effective Benefits Of Nuclear Energy 

Nuclear power plants use uranium as fuel, which is widely available and provides fuel cost stability. Although the initial costs of establishing a nuclear power plant can be high, uranium fuel costs are relatively stable compared to fossil fuels. This stability can provide long-term cost predictability for electricity generation. 

Once a nuclear power plant is operational, the cost of generating electricity can be competitive with other conventional energy sources, such as natural gas and coal, making nuclear energy cost competitive. The cost per unit of electricity produced can be lower compared to fossil fuel-based power plants, especially when considering volatile fuel prices. 

In the Gulf Cooperation Council (GCC), the average actual cost of generating electricity is estimated to be around US$0.11 per kilowatt-hour (kWh), while the average subsidised price stands at $0.06 per kWh. 

Saudi Arabia, being the largest generator, experiences the most substantial losses in electricity generation. In 2021 alone, the kingdom incurred nearly US$14 billion in losses while providing subsidised electricity to its domestic economy, as reported by MEI. 

On the other hand, Oman incurred the fewest losses, amounting to approximately US$857 million in 2021, as its subsidised electricity price aligns more closely with the actual cost of production. 

Kuwait relies heavily on imported natural gas and oil for its energy needs, making it vulnerable to price volatility and potential disruptions in fuel supply. By introducing nuclear power to diversify the energy mix, energy security can be enhanced by reducing dependence on external energy sources. 

Nuclear power plants have a long lifespan, typically around 40 to 60 years, providing longevity and operational efficiency. Once operational, they can be a reliable source of electricity for decades. Advancements in nuclear technology, such as Generation IV reactors, aim to improve efficiency and reduce operational costs further. 

The oil- and gas-producing countries of the Gulf region are currently experiencing significant financial gains amidst a global energy crisis. 

Kuwait, for instance, foresees oil revenue reaching an impressive US$16.7 billion in 2023. Meanwhile, Saudi Arabia projects government revenues of US$298 billion for 2023, alongside a year-on-year GDP growth of 8.6 percent in the third quarter of 2022. 

However, these countries understand that relying solely on high oil prices is not a sustainable long-term strategy. They need to prepare their political and economic systems for the impending global transition away from carbon-based energy sources, for which nuclear energy is the answer. 

As of 2022, Israel boasts the highest population growth rate among member countries of the Organisation for Economic Co-operation and Development (OECD). And Israel depends on electricity; its network is not connected to the systems of neighbouring countries. Hence, it has been sufficient to meet the energy needs of a population that has grown by an average of 3 percent a year between 2010 and 2020. 

It currently ranks third in population density within the OECD and is expected to become one of the most densely populated countries globally in a few years. By 2040, the population is projected to reach 13 million, compared to 9 million in 2020. With the doubling of electricity demand and the significant increase in domestic energy consumption, Israel faces considerable challenges. 

To address these challenges, the Israeli government is actively promoting various programmes aimed at meeting future electricity consumption forecasts, reducing pollution, and promoting the use of natural gas and renewable energy sources for power generation and transportation. 

New Technology For Nuclear Energy 

Electricity generation is the costliest domestic use of energy in the Gulf, despite only accounting for 12 percent of energy consumption. Electricity subsidies alone make up almost 40 percent of the value of energy subsidies in the GCC countries, highlighting the inefficiency of oil and gas use in the region. 

Small modular reactors (SMRs) are a recent advancement in nuclear energy, offering a more cost-effective alternative to traditional, large-scale reactors. Until recently, large reactors required decades and billions of dollars to build. SMRs generate a fraction of the energy, at less than 300 MW, and are quicker and more affordable to construct. 

One of the benefits of SMRs is their flexibility. They can be used for projects with lower energy needs, and multiple reactors can be added to projects with higher energy needs, like adding more cars to a freight train. This flexibility allows for a more tailored approach to energy generation. 

Nuclear energy is the future of the Gulf region. The nations are actively seeking solutions to meet their future energy demands while reducing their environmental impact and ensuring long-term economic stability.