United Arab Emirates' ENEC Awards $20 Billion Nuclear Power Contract to KEPCO Consortium

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Researched by Industrial Info Resources (Sugar Land, Texas)--A consortium led by Korea Electric Power Corporation (SEO:015760) (KEPCO) (Seoul, South Korea) has secured a $20 billion contract to build four nuclear power plants for the Emirates Nuclear Energy Corporation (ENEC) (Dubai, United Arab Emirates) in the United Arab Emirates (UAE). The four light-water reactors (LWR) of 1,400 megawatts (MW) each will be located at Sila, which is about 330 kilometers from Abu Dhabi. The construction is likely to be completed between 2017 and 2020. The KEPCO consortium and ENEC also will form joint venture companies to operate the power projects and identify options to source nuclear feedstock. As part of the agreement, KEPCO will supply nuclear fuel for the first three years of operations.

The consortium also consists of Westinghouse Electric LLC (Monroeville, Pennsylvania), Hyundai Heavy Engineering Industries Company Limited (SEO:009540) (Ulsan, South Korea), Doosan Heavy Engineering Industries Company Limited (SEO:034020) (Gyeongsahngnam-Do, South Korea) and Samsung C&T Corporation (SEO:000830) (Seoul, South Korea). The consortium beat bids from other international energy firms, including Hitachi Corporation (NYSE:HIT) (Tokyo, Japan), General Electric (NYSE:GE) (Fairfield, Connecticut) and Areva S.A. (EPA:CEI) (Paris, France).

Mohammad Al-Hammadi, chief executive officer of ENEC, indicated that the order was the first for a fleet of nuclear power plants planned for the UAE. Al-Hammadi is confident that by 2020, the four nuclear power plants will account for about 20% of the UAE's electricity demand. Industry forecasts suggest that the UAE's power consumption is expected to reach 40,000 MW through 2020. ENEC and KEPCO also have identified 10 potential sites to set up nuclear power plants in the future. The contract also includes the training of engineers for managing and operating nuclear power stations. The project, and UAE's nuclear program, is expected to initially create about 10,000 jobs and employ about 110,000 people over a 10-year period. Experts have observed that allied commercial and business opportunities of about $40 billion also will be created.

Sources have stated that the consortium is likely to earn an additional $20 billion over a 60-year period from operations, maintenance, refueling and repairs. ENEC is also discussing the possibility of signing cooperation agreements with international companies in areas not covered in the agreement. In a related development, France has offered technology support to assist UAE in its civil nuclear power program. This comes on the heels of a similar offer made to Saudi Arabia.

UAE's nuclear agreement with the United States does not allow domestic fuel enrichment processing. ENEC has envisaged a three-pronged process to take care of spent nuclear fuel (SNF). The first stage will include storing the SNF inside the nuclear plant complex for a 10-year period, after which it will be transferred to lead containers for the same period. The third stage will take care of shipping the SNF to countries with processing capabilities. This will be performed under the guidance and supervision of the International Atomic Energy Agency (Vienna, Austria).

UAE is the fourth-largest oil-producing country among the Organization of Petroleum Exporting Countries (Vienna). The country has been focusing on developing alternate energy sources, particularly nuclear power, to meet its growing demand for power. According to a report published by Ventures Middle East LLC (Abu Dhabi, UAE), contracts worth $78.2 billion have been awarded by the UAE as of December 16, 2009, a major portion of which is in the energy and infrastructure sectors. UAE is the first country in the Gulf region to begin development of nuclear power plants.

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