--Korea Electric Power Co., in conjunction with construction units of the Samsung and Hyundai business groups and with Westinghouse Electric Co., a unit of Japan's Toshiba Corp
--The KEPCO consortium will begin work on the power plant next year in Sila, a city located 330 kilometers west of the UAE capital of Abu Dhabi. There will be four 1,400 MW-capacity plants at the location generating a total of 5,600 MW of power.
--The other bidders in the year-long process included a consortium of French companies - Areva, Total and GDF Suez - initially touted as the front runner, and a third consortium of US and Japanese companies, including General Electric and Hitachi. (See the article in Sept:
--The road to the final selection was not smooth, however. Due to close ties between the UAE and France in politics, economy and military affairs, rumors swirled early this month that the French nuclear group Areva would win the bid. French President Nicolas Sarkozy also visited Abu Dhabi in May to help Areva’s cause. (in March 2008, the UAE endorsed an agreement signed with France in January to cooperate on the development of nuclear energy.)
--Under the deal, the KEPCO-led consortium will design and build four 1,400MW nuclear power units, one due for completion in 2017 and the other three by 2020. For the next 10 years, it will earn $20 billion for construction alone, the equivalent in money terms to exports of 1 million medium-sized cars or 180 300,000-ton oil tankers. By joining in the operation of the power plants during their 60-year life span, the consortium will make another $20 billion.
--According to data from the Ministry of Knowledge Economy, the APR’s construction unit cost of 2,300 dollars per kilowatt (kW) was lower than those of its competitors AREVA at 2,900 dollars per kW, and GE at 3,583 dollars per kW. In terms of electricity generation unit cost, the South Korean model’s 3.03 cents per kilowatt hour (kWh) was lower than AREVA’s 3.93 cents kWh, and less than half Hitachi’s 6.86 cents kWh.
-- The deal could be worth as much as $40 billion if the initial four plants are successful and the arrangement is extended.
South Korea Side:
--This is also the first time Korea is exporting its APR1400 light-water reactor since the country started operating its first nuclear power plant, Gori No. 1, with U.S. technology in 1978. With the contract, Korea has turned from an importer into an exporter of nuclear power technology.
--Korea, which built its first commercial nuclear reactor in 1978 and now receives 40% of its electricity from 20 reactors, hopes to make nuclear infrastructure exports a pillar of its economy much like cars and electronic goods, according to presidential spokesman Lee Dong-kwan.
--Following the deal, KEPCO also said it was in talks with Turkey for two nuclear power reactors and was planning a separate bid for a Ukraine nuclear power plant.
--Executives at Doosan Heavy said in November it expected to win five to six new orders for nuclear power plant equipment in the United States and China in 2010.
--The UAE project is the largest-scale overseas project order ever picked up by South Korea. The selection is further significant in that it marks the first exportation of South Korea’s independently developed nuclear power plant model APR.
--the Korean government pulled out all the stops to win the contract. High-ranking officials from the ministry frequently called their counterparts in the UAE to explain the advantages of selecting the Korean consortium. The Korean presidential office of Cheong Wa Dae, the Education, Science and Technology Ministry, and the Defense Ministry did also their part.
--Korea failed to win contracts to build nuclear power plants in China in 2004, South Africa in 2007, and Canada last year.
----Lee’s administration is heralding a “nuclear power Renaissance” and usees nuclear power as a green energy resources.
--South Korea’s Ministry of Knowledge Economy said yesterday in its 2010 policy plan that it will strive to boost exports in industries such as nuclear power generation, aviation and defense.
--UAE is expected to award the contract in March,
--The first of the UAE's nuclear units is scheduled to produce electricity to its grid in 2017, the other three to be complete in 2020.
--The UAE hopes to become the first Gulf state to develop a civilian nuclear programme to help meet soaring demand for power. The contract involves construction, commissioning and fuel loads for four 1,400 megawatt plants.
--Many other Middle Eastern states have signalled interest to develop civilian nuclear power plants to meet future power demand, partly in response to Iran's nuclear ambitions. The UAE, a close US ally, is the first nation in the region to act.
--Oil income has left Abu Dhabi, the leader of the seven-member federation of the UAE, with huge cash reserves. It is unlikely to struggle with financing the programme. Financing issues have delayed programmes elsewhere in the world. It is also unlikely to suffer the licensing and planning delays that often hit similar programmes in more democratic countries, where residents and local politicians are more likely to raise objections.
--The UAE established a Nuclear Energy Program Implementation Organization which set up the Emirates Nuclear Energy Corporation (ENEC) as an Abu Dhabi public entity, initially funded with $100 million, to evaluate and implement nuclear power plans within UAE (or specifically in Abu Dhabi emirate, which comprises 86% of the land area of UAE) the implication here is that Abu Dhabi funds ENEC, so no financing problems.
--A construction start on the first unit is planned for 2012, with it coming on line in 2017. It will be financed by the state, without the need for loans, though outside equity partners remain a possibility.
--The Emirates Nuclear Energy Corporation (Enec) announced that it had selected a team led by Korea Electric Power Corporation (Kepco) to design, build and help operate four 1,400-MW civil nuclear power units.
--The UAE, the world's third largest oil exporter, expects to see its power demand grow from around 15,000 megawatts in 2008 to 40,000 MW in 2020 as oil wealth drives population and economic growth. At the moment gas could only supply 20,000-25,000 MW, leaving a growing gap to fill beyond 2020. The country would rather use gas for oil activity, industry and as a petrochemical feedstock than for power generation.
--Chief Executive Officer of Emirates Nuclear Energy Corp. (ENEC) Mohammed Al-Hammadi stressed that the four nuclear plants planned by the United Arab Emirates (UAE) will provide 25 percent of the country's electricity demand by 2020, according to the Emirates news agency (WAM)'s report on Monday.
--A nuclear power programme would make the UAE less vulnerable to power shortages and would remove the cap tight power supplies could place on future economic growth, allowing it the freedom to expand industries and embark on new ones without limitations.
--The Emirates imports most of the natural gas that it burns to generate electricity and using its own oil would reduce amounts available for export.
--According to Oil and Gas Journal, the UAE’s proven natural gas reserves were 214.4 trillion cubic feet (Tcf) as of January 1, 2009. The UAE holds the sixth largest proven natural gas reserves in the world after Russia, Iran, Qatar, Saudi Arabia, and the United States. The largest reserves of 198.5 Tcf are located in Abu Dhabi. Sharjah, Dubai, and Ras al-Khaimah contain smaller reserves of 10.7 Tcf, 4.0 Tcf, and 1.2 Tcf, respectively.
--In 2008, the UAE produced 1.77 Tcf and consumed 2.1 Tcf of dry gas. The UAE became a net natural gas importer in 2007, as consumption has grown much faster than production. Increased domestic demand for electricity, the desalinization of water, growing demand from the petrochemical industry, and the need for an enhanced oil recovery (EOR) system based on natural gas injections in mature oil fields have caused the UAE's domestic demand for natural gas to rise.
--According to EIA estimates, the UAE had gross imports of 592 Bcf and gross exports of 267 Bcf of natural gas in 2008. Net natural gas imports amounted to about 280 Bcf, imported mainly from Qatar. Exports, in the form of LNG, were shipped to Asian countries, primarily to Japan.
--Some U.S. officials have voiced reservations about nuclear security. Iranian entities have been known to use front companies based in Dubai, the commercial capital of the country, to import sensitive military technologies. U.A.E. officials say they are cracking down on such shell companies and working to prevent materials sanctioned by the United Nations from reaching Iran.