Saudi Arabia is close to appointing an advisory team to help it drive forward the development of its huge nuclear power programme.
The King Abdullah Centre for Atomic and Renewable Energy (KA Care), created in 2010 to develop renewable energy sources for the country, is to hold final meetings with two advisory groups shortlisted to work with the energy body during the week beginning 14 July.
It is the final stage of the process for KA Care to put together a team that will help it develop the regulatory and legal framework for its 17GW nuclear programme. The advisers are also expected to work on developing a commercial framework for the plans, explore financing options and help secure private sector involvement in the programme.
The two consortiums consist of a mixture of local banks, international banks, law firms, and technical experts on nuclear power.
KA Care is planning to develop the 17GW nuclear programme by 2032, and the first nuclear power could be produced by 2019. In comparison, the UAE nuclear power programme, which is valued at $30bn just for the construction of four reactors, will produce 5.6GW.
The value of the Saudi nuclear programme is still unclear, but some sources close to the talks with KA Care suggest that as many as 16 reactors costing about $7bn each could be developed.
“The advisers will help design and implement the nuclear programme, but there are still a lot of questions to be answered about the specifics, such as how many plants and how they will be funded.” says one source involved in the talks.
“There is still a lot to be decided, and that is what the advisers will be working on,” adds another source.
Several advisory groups have been in discussion with KA Care for about the past three to four months and the energy body has now narrowed the choice down to two consortiums. Members of the two shortlisted groups say KA Care has told them it would like to move forward quickly with an appointment after the final discussions scheduled for mid-July.
When the UAE signed its nuclear power contract in December 2009, it was the first country to start a civilian nuclear power programme in nearly three decades. Saudi Arabia is now set to be the second after other countries in the region scrapped plans to develop nuclear power, or have made little progress. Kuwait scrapped its nuclear plans in late 2011, while a proposal to develop nuclear power in Bahrain has languished.
Riyadh is keen to diversify away from using its hydrocarbons resources for domestic purposes like power production, that is often inefficiently used or wasted. The local Jadwa Investment estimates that based on current trends domestic consumption of oil, coupled with rising government spending and a growing population, will mean the kingdom needs the oil price to be around $320 a barrel just to balance the budget.
As a result, KA Care is developing a programme of renewable energy projects that should also include 41GW of solar power over the next 20 years, and 4GW of geothermal and waste-to-energy capacity. KA Care is expected to start seeking interest in its first renewables projects later this year.
The plan still needs to be approved by KA Care’s board of directors, which includes King Abdullah, the crown prince, foreign minister, oil minister, finance minister and the industry minister.
Riyadh has already been setting the diplomatic groundwork that it will need for the development of its nuclear plan. In 2008, it signed a nuclear energy cooperation deal with the US and in January 2012 King Abdullah signed a nuclear energy cooperation deal with Chinese Premier Wen Jiabo. Deals with countries including France and South Korea have also already been signed, and talks for cooperation deals with countries including Russia and the UK are under way.
In 2010, Finland-headquartered energy consultancy was appointed to advise KA Care on the development of its renewable energy strategy.
KA Care did not respond to requests to comment.