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Starting gun fired in Mideast race for nuclear power

IRAN'S CONTROVERSIAL plans to build 10 uranium-enrichment facilities has renewed global attention on nuclear energy ambitions in the Middle East. Several pro-Western Arab states are rolling out their civilian nuclear projects with the backing of the International Atomic Energy Agency (IAEA).

Iran said in late-November that it had begun work on five new sites, with locations for a further five to be found by this month, exacerbating the diplomatic stand-off with the UN. President Mahmoud Ahmadinejad has also said that his government is prepared to cut back already limited co-operation with the IAEA.

The focus on Iran's alleged use of uranium for military purposes has distracted attention from the steady advance of the UAE's nuclear plans. In October, the UAE adopted a federal law on the peaceful use of nuclear energy, establishing a national nuclear regulatory authority and prohibiting the country from pursuing uranium enrichment.

Abu Dhabi's by-the-book approach contrasts starkly with Iran's approach and has won the UAE the speedy approval of US policymakers. After the UAE's federal law, US Congress passed the so-called 123 agreement with the UAE, which is legally required to allow US companies to provide reactor technologies, fuel and nuclear energy services to other countries for civilian energy production.

With this final hurdle out the way, Abu Dhabi is moving ahead with plans to build up to four nuclear reactors, providing 6 gigawatts (GW) of capacity in the first phase. Two reactors are envisaged for a site between Abu Dhabi city and Ruwais, and a third at Fujairah, with a further one to be decided. The government is set to award a series of construction contracts, worth up to $20bn, in order to meet a 2017 start-up date. The UAE's haste is understandable; the country's domestic power demand is expected to more than double to 40 GW by 2020. Rapid economic development has stretched existing energy resources, and nuclear is designed to plug the electricity-demand gap with cost-effective power.

In November, the Emirates Nuclear Energy (ENEC) was formally established to act as the investment arm of the government in the nuclear industry, taking equity stakes in the projects, in collaboration with foreign partners. ENEC is set to decide on the choice of technology provider by early 2010: the contenders are French Areva's European Pressurised Reactor (EPR), the US-Japanese, GE-Hitachi Advanced Boiling Water Reactor and South Korea's APR-1400 Pressurised Water reactor. The successful vendors will also supply uranium feedstock.

With France's President Nicolas Sarkozy helping to lobby on behalf of Areva, analysts see it as most likely provider. "The EPR is a nice piece of state-of-the-art technology, which is creating a lot of interest in Abu Dhabi," says a London-based security analyst.

The UAE's nuclear programme is the region's most advanced, but will be joined by others. In December 2006, the Gulf Cooperation Council (GCC) states– Kuwait, Saudi Arabia, Bahrain, the UAE, Qatar and Oman – commissioned a study on the peaceful use of nuclear energy. Saudi Arabia and Qatar are considering nuclear possibilities.

But it is Jordan that is making most progress. The kingdom's Committee for Nuclear Strategy has set out a programme for nuclear power to provide 30% of its electricity by 2030. In November, the Jordan Atomic Energy Commission (JAEC) awarded WorleyParsons an $11m contract to carry out the feasibility study on the country's first nuclear plant. JAEC is evaluating proposals from four reactor vendors: Korea Electric Power, Areva-MHI, Russia's Atomstroyexport and AECL of Canada.

Lacking an indigenous pool of industry expertise, putative Mideast nuclear-energy club members face a steep learning curve in implementing the proposed new nuclear projects. According to management consultants AT Kearney, some 4,000-6,000 qualified individuals are needed to operate a typical nuclear plant. With 300 new reactors being planned globally, the region will have to compete for relatively scarce talent.

But with large state budgets behind them, Iran will face stiff competition in the Middle East's nuclear energy race.

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