Member of the International Association for Energy Economics (IAEE) Fahad bin Juma said the recently-announced plan of the Ministry of Commerce and Industry to build 16 nuclear reactors at the cost exceeding $100 billion makes them wonder on their economic feasibility of such reactors in the presence of abundant quantities of oil and natural gas in the Kingdom at low cost.
He said energy economics of new reactors for production of nuclear energy remains a controversy and that nuclear energy has normally high capitals in terms of cost whereas costs of direct fuel are low.
Compared to other energy generation means, the nuclear energy enormously depends on a number of assumptions such as time scale for building, financing, costs of storage taking into consideration issues related to decommissioning of the reactor and costs of storing nuclear waste, the expert said.
He said nuclear energy is clean energy but, however, it is not renewable and expensive in terms of construction and necessitates high efficiency in operation and lifespan of a reactor extends from 40 to 60 years at best before it becomes non-operational and be kept in a safe place at a cost exceeding $300 million.
Referring to cost, the Saudi expert said cost estimates are much higher now than earlier anticipated where financing of two nuclear units now stands at nearly $14 billion.
He said nuclear reactors require uranium for operation, though other materials may be used, adding that prices of uranium in global markets stood at nearly $44.09 per kg in 2005, rose to $249.12 per kilo in 2007 then fell considerably in 2008 in the aftermath of the international economic crisis where its prices have fluctuated since then.
He said the Kingdom consumed approximately 400 million barrels of oil for the production of electric power in 2009, and the consumption is expected to hit 450 million barrels in 2012 at a cost ranging between SR14 and 18 billion at world prices.
On his part, economic adviser Ali Al-Dagag said the Kingdom's concern over oil alternatives is strategic and important for Saudi economy in the next decades.
He said the alternatives owned by the Kingdom, in addition to oil, represent fossil and non-fossil elements, and it still maintains a good choice: That is peaceful use of nuclear energy.
He said the Kingdom is currently concentrating heavily on gas as feedstock rather than an alternative energy source and, additionally, it keeps big asset of solar energy and considered to be the biggest world country in this area.
Saudi Arabia has prepared itself to depend on solar energy since 1982 through Khurais project but it was not activated due to low prices of oil at the time. There is a tendency to return to exploit this source that could be also exported, he said.
The Kingdom's dependence on investment in solar energy is important so to maintain its oil revenues and, further, to maintain the stability of international oil markets in light of the growing domestic consumption of oil, which jumped from half a million barrels per day to two and a half million, which is projected to rise to four million barrels a day, matter that arouses concern of local economy, which calls for a big focus on other alternatives, he added.
