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The successful commercialization on 24 March 2022 of the
Emirates Nuclear Energy Corporation's (ENEC's) second reactor
raises online capacity to 2.8 GW and supports expectations that all
four reactors will be on-line by 2024, when they should account for
over 20% of the integrated Abu Dhabi and Northern Emirates
generation capacity and close to 40% of electricity generated.
The ENEC Barakah nuclear facility is expected to be a
significant contributor to the UAE's 2021 United Nations Climate
Change Conference (COP26) commitment to be net zero by
2050: S&P Global's modelling projects that the
facility will displace low-efficiency legacy gas generation and by
2030 eliminate up to 18 million metric tons per annum (MMtpa) of
carbon dioxide (CO2) per year versus ongoing power generation with
the current committed mix of plant. This alone should represent up
to 25% of the UAE 2030 Nationally Determined Contributions (NDC)
commitment for decarbonization made to the United Nations Framework
Convention on Climate Change (UNFCCC) last year.
When fully online, the nuclear plant should reduce gas
consumption in 2030 by between 900 and 1,200 million cubic feet per
day (or 155,000 and 205,000 thousand barrels oil equivalent per
day)[1]: This
will substantially support the UAE's target to be self-sufficient
in gas supply by 2030, and along with Abu Dhabi National Oil
Company's (ADNOC's) recent commitments for development of sour and
unconventional gas fields, should place the nation in a strong
position to advance plans for expansion of LNG export capacity at a
time when the world is facing a major gas supply challenge.
Clean energy certificates of origin for nuclear power
from ENEC are now being offered, alongside those for renewable
solar via the Abu Dhabi and Northern Emirates power utility,
Emirates Water and Electricity Company (EWEC): These have
been taken up by major players in the country such as ADNOC and
Aldar, and imminently Emirates Global Aluminium (EGA), to support
their own commitments to net zero. This is the first offering of
clean nuclear certificates anywhere in the world, and the take-up
suggests that the model may be replicable elsewhere. It is expected
to support offerings of green aluminium, green steel and greener
oil from UAE enterprises, all of which will serve as key examples
to support net zero realization which can be leveraged as the UAE
prepares to host COP28 in 2023.
Both nuclear and renewables are expected to contribute to the
future sustainability of power supply in UAE although nuclear
offers baseload reliability whereas renewables are inherently
intermittent. More aggressive incorporation of renewables by EWEC
may be supported by nuclear but the overall optimization including
necessary investments in grid reinforcement and in storage and
possibly commitment to further nuclear development will need to be
further assessed. In order to realize the full benefit of both
nuclear and renewables capability EWEC will also need to push
forward with its plans for the decoupling of older linked
desalinated water and power production which could otherwise force
some under-utilization in low power demand winter months.
Successful operation of the nuclear facility is a cornerstone of
Abu Dhabi's clean energy strategy and is allowing Abu Dhabi's power
utility EWEC (which is also responsible for Northern Emirates
supply within the UAE) to substantially reduce its use of gas
generation, and in particular to back-out low efficiency/older
generation technology in its system.
S&P Global has applied its models of the UAE power demand
and supply systems to assess the impact of the nuclear facility in
terms of supporting the nation's decarbonization objectives and
freeing up gas from use in power generation to support the national
goals for self-sufficiency and potential further export
development.
Our analysis indicates that the nuclear facility should support
the long-term elimination of up to 18 million tonnes pa of CO2
compared to what might have been the case without its successful
operation. In 2030 this should account for 25% of the targeted
total UAE reduction planned within its latest NDC submission.
In addition, we estimate the gas savings from full four reactor
operation, based on backing out operation of the least efficient
gas-fired generation plants in the EWEC system, could be from 900
to 1200 million cubic feet per day (or 155 to 205 thousand barrels
oil equivalent per day) [1],
although these levels could be somewhat reduced longer term with
significant step ups in renewables penetration and/or investment in
more efficient gas generation. This gas demand impact will
represent a major contribution towards ADNOC's strategy to support
the UAE to be self-sufficient in gas by 2030 and potentially to be
a net exporter.
[1] The
high-end of the range reflects a non-optimal power dispatch
scenario where Barakah full-load generation would have been
replaced equally by each operating gas-fired power plant in the
EWEC grid.
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Raul Timponi is an Associate Director on the Europe,
Middle East, and Africa Energy Team, specializing in global power
markets.
Silvia Macri is a Principal Research Manager,
responsible for renewable and power market analysis in Africa and
the Middle East.
Andy Barrett is a Senior Advisor with the Climate and
Sustainability Consulting Team with an extensive background at the
highest levels of the international energy business.
Posted on 19 April 2022
This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.
