The Party That Failed
An Insider Breaks With Beijing
A few years ago, the Middle East’s nuclear energy prospects were in decline. Political instability made long-term investments in civil nuclear infrastructure risky. For one, Egypt was in the last stages of considering reactor bids when the popular uprising began in 2011. These plans were soon shelved by subsequent transitional governments. And the 2011 Fukushima Daichii meltdown in Japan had shaken public confidence across the world in the safety of nuclear power and raised questions about the industry's future. But now, at least in the Middle East, it appears that nuclear power is back in style. In April, Russian state nuclear firm Rosatom announced that it had opened an office in Dubai, the United Arab Emirates. The office will help oversee the company’s many nuclear power projects in Egypt, Iran, Jordan, and Turkey. It is also hoped that Russian regional presence would open up new opportunities for its nuclear industry in the region.
Rosatom’s new office comes at just the right time. The Middle East is now home to the greatest number of “nuclear newcomers” in the world, with at least six countries in total actively pursuing nuclear power. For one, in 2011, Iran became the first country in the region to operate a nuclear reactor. Tehran’s long-term plans include an ambitious expansion of its nuclear energy capacity by eight additional power reactors, something generally condoned by the recent nuclear deal.
For their parts, Saudi Arabia and the United Arab Emirates began to pursue nuclear power in 2010 and 2009, respectively. Both countries are driven by efforts to diversify their energy mix, and also use nuclear energy as a status symbol in the context of their strategic competition with Iran.
Saudi Arabia has perhaps the most ambitious nuclear plans, with a goal of building 16 reactors by 2032. The United Arab Emirates’ first reactor is under construction, with an expected completion date in 2017. Egypt has also revived its plans to build a series of nuclear power reactors in Dabaa on the coast of the Mediterranean. It is joined by Turkey and Jordan, which are building nuclear power reactors that are expected to be operational by Russia 2020 and 2025, respectively.
In these pursuits, Middle Eastern governments are on the lookout for nuclear technology providers, regulatory best practices and training opportunities. Over the past few years, the number of nuclear cooperation agreements between regional governments and possible suppliers has been steadily increasing. And the country that benefits most from contracts on offer is Russia, which has followed a unique export strategy and ambitious plans throughout the region.
Yet as the region considers its nuclear future, the global nuclear market is witnessing significant transformation. China, India, and Russia are pumping major investments in their domestic nuclear infrastructure. Beijing is in the early stages of developing an export strategy for its indigenous technology. Russia, on the other hand, stands out for its sophisticated export-oriented model to help grow its nuclear businesses. Russia’s business model, though, is uniquely appealing to Middle Eastern governments. Rosatom is willing to build, own, and operate nuclear reactors, selling the electricity they generate back to a country at a guaranteed price. Russia has also promised to provide training and educational opportunities in nuclear technology for locals, which will help create jobs.
This model has clear benefits for both sides. Russia’s nuclear partners receive a sustainable, environmentally friendly supply of electricity, even as they avoid some of the high up-front construction costs that have dissuaded governments from pursuing nuclear power in the past. Moscow profits from the sale of electricity and the use of a predominantly Russian supply chain for construction, and it establishes vital long-term economic links with Middle Eastern powers in the process. In addition, these deals provide Moscow with an opportunity to project itself as a scientifically advanced partner, reclaiming the former Soviet Union’s role in industrializing Algeria, Egypt, Iraq, and Libya in the Middle East during the Cold War.
This doesn’t mean that Russia will be able to sell its wares everywhere. Not every country is burdened by the cost of building their nuclear infrastructure. For example, Saudi Arabia will have fewer incentives to pursue Russia’s current model, given the nation’s abundant wealth. Russian foreign policy in the Middle East could also become a stumbling block. Moscow’s political and military support for Syrian President Bashar al-Assad strained the country’s relationship with Turkey and the Gulf Arab states. The downing of a Russian fighter jet by Turkish forces in December 2015 raised concerns that the two countries would halt their agreement to build the Akkuyu nuclear power plant in Southern Turkey. Although that hasn’t happened yet, the project’s fate still hangs in balance as political relations between the two countries continue to deteriorate.
Russia’s power play is both economic and strategic. Providing and maintaining nuclear reactors as well as fulfilling fuelling contracts has economic benefits. The development of long-term ties with Middle Eastern states also serve strategic purposes. How much influence Moscow seeks in the Middle East by way of its nuclear technology is still uncertain. Russia has already made significant gains in the Middle East’s nuclear market, and the new Rosatom regional hub suggests that Moscow is committed to its long-term nuclear strategy. Yet the extent to which Russia can consolidate its gains and expand its market share will depend on more than just providing affordable technology and services. Russia must become a credible and reliable long-term nuclear partner—especially as Moscow gets more involved in the partisan politics of the Middle East. For Russia and the regional states, it remains to be seen whether energy deals can remain separate from broader geopolitics.