JEDDAH — No one can doubt that nuclear power is one of the most effective sources of energy. However, international politics, dangers from nuclear accidents, and nuclear waste disposal are some significant obstacles that need to be taken into consideration, Anfaal Capital said in its note released this month on the Kingdom's nuclear energy plan titled “Can Nuclear Energy be a Good Alternative for Saudi Arabia?” The Kingdom is trying to find many alternatives to reduce oil consumption, and nuclear energy is increasingly becoming one of the favored alternatives. Recently, in January 2012, Saudi Arabia has signed a nuclear cooperation agreement with China to build on 16 nuclear reactors by 2032 with a cost of $100 billion. These reactors could produce14 GW of electricity throughout the country. Saudi Arabian current consumption is around 30 GW of electricity per year. The nuclear reactors are assumed to cover almost half of the electricity demand. In terms of international politics and when comparing to its regional neighbors, Saudi Arabia can be considered to be a politically stable country, it noted. However, “with an increasingly unstable neighborhood, analysts are thinking twice about what would be the consequences if the nuclear reactors were mismanaged or were attacked from the outside.” Moreover, the waste from nuclear energy can be extremely dangerous for future generations. Such waste needs to be carefully looked after for many years and there are disposal risks. Some countries, like United States, bury the nuclear waste underground in huge concrete pits. The Saudi government will need to build the proper infrastructure for this waste, the report said. Yet from production, economic and domestic equity perspectives, nuclear energy is assumed to be an efficient alternative to the existing oil and gas power plants. There are many companies that are expected to benefit from the development and the construction of the nuclear power, the study said. For, instance Saudi Bin-Ladin Group already signed a partnership agreement with the French nuclear group Areva in 2011. Likewise, the steel companies, such as Al-Zamil Industrial Investment Company and the Saudi Steel Pipe Company, are expected to benefit from the new power source. Such companies are already showing a good growth and relatively high Return on Equity (ROE), and they are expected to expand in the future as they will be needed in the manufacturing process of the nuclear plants. “From a purely production perspective, nuclear energy cannot come sooner to Saudi Arabia. If we assume that using the nuclear energy will reduce the oil consumption by 25 percent, then that means that Saudi Arabia can save up to $25 billion annually of its oil consumption. Such an amount is able to pay back the nuclear reactors cost in around four years.” Moreover, the nuclear energy can be a good solution for an economic point of view. Saudi Arabia can re-invest the $70 million per day in the development of the country's education, health, and many other sectors. In April 2010, Saudi Arabia announced plans to establish a center that will take a major role in its moves to set up a nuclear power program. The center, called the King Abdullah City for Atomic and Renewable Energy (KA-CARE), was established by a royal order issued by King Abdullah Bin Abdul Aziz, Custodian of the Two Holy Mosques. It aims to develop 41 gigawatts of solar capacity over the next 20 years. 25 gigawatts will be installed in the form of solar thermal plants, and the remaining 16 gigawatts will be supplied by photovoltaic panels. The Riyadh-based ‘city' will be tasked with promoting research, making future deals, and overseeing activities related to the use of atomic energy, according to an announcement by the Saudi government. — SG
