Strategy vital for nuclear power in MENA

Nuclear energy is a proven and shared technology, with more than 440 currently operating nuclear power plants in the world and more than 12,000 reactor years experience.

In the region, the UAE, Egypt and Jordan are the most progressed countries when it comes to diversifying the electricity generation portfolio with means of nuclear energy. For MENA countries that have not built a nuclear power plant before, these countries can learn from experiences in the USA and Europe, according to leading consulting firm A.T. Kearney.

"Since the cost of each nuclear reactor varies between $4bn - $8bn, the commercial risks of building a nuclear power plant can be significant. Add to that the safety aspects and it becomes clear that having sound strategies and detailed plans are key to success,"

commented Dr. Dirk Buchta, Senior Partner and Managing Director of A.T. Kearney in the Middle East.

Without a clear strategy in place the construction phase and later on the use and maintenance of a nuclear power plant may face significant challenges. In Turkey for example, the national authorities caused significant delays in construction through a poor sourcing process. Turkey had to re-launch its tender process several times and thus lost time and increased costs.

"Taking key decisions at the beginning of a nuclear project is vital to avoid double work and budget overruns; it saves time, organizes resources efficiently as well as develops project deliverables effectively. In addition planning early on for safety and operational excellence of the facility in use will contribute to the success," said Dr. Götz Wehberg, Leader of A.T. Kearney's Utilities Practice in the Middle East.

Some countries believe that, by pursuing turn-key contracts they can avoid all the issues of building a nuclear plant. In Finland, however, experience shows that building a nuclear power plant is too complex to solely rely on a turn-key contract. The incumbent utility in Finland TVO had contracted Areva as a turn key supplier, and is now in discussions with Areva of how to share budget overruns. The overrun is estimated to be around USD 1.5 billion so far.

"Setting up and sourcing a nuclear plant is more complicated than other power plants. Firstly a lot of specific factors must be considered when constructing a nuclear plant, such as the site selection, sourcing of the construction itself, funding, safety regulation as well as the country's infrastructure and current generation portfolio. Secondly countries building a nuclear power plant must be clear about what is required for the nuclear plants to become operational and contribute to the power grid and economy. Creation of an industry cluster for nuclear as well as how to get some 4,000 - 6,000 thousand qualified individuals for operating the plant, must be considered early in the process of introducing nuclear power in a country," said Dr. Wehberg.

Besides developing a thorough strategy for the nuclear plant, countries have to consider the right timeline of setting it up.

"There is a fierce competition for qualified talents as well as contractors. This is why the timing for setting up a nuclear power plant is a key success factor," concluded Dr. Wehberg.