Localizing Nuclear Capacity? Saudi Arabia and Small Modular Reactors

​Working Paper #51

Authors:​​
Ali Ahmad and Reem Salameh, Energy Policy and Security Program, Issam Fares Institute for Public Policy and International Affairs (IFI), AUB
M.V. Ramana, Liu Institute for Global Issues, School of Public Policy and Global Affairs, University of British Columbia
July 2019

​Introdu​​​ction

In recent years, Saudi official statements and policy documents have emphasized the importance of localizing energy technologies. For example, “Saudi Vision 2030”, championed by the now crown prince, Mohamad Bin Salman identifies localization of portion of the value chain within the sector as a new pillar of the kingdom’s economy ("Saudi Vision 2030" 2016). A second trend in Saudi energy policy has been to promote the development of indigenous capacities in a variety of different electricity generation technologies with the aim of reducing the reliance on the oil and gas sectors. Currently almost all of Saudi Arabia’s electricity comes from fossil fuel sources (Demirbas, Hashem, and Bakhsh 2017).

One result of the latter trend is that over the last decade Saudi policy makers have been talking about building nuclear power plants. Of late, these calls have been coupled with an emphasis on localization. The National Transformation Program 2020 (NTP 2020) document released in 2016 stresses the importance of increasing the number of developed and localized technologies in the electricity sector, including nuclear energy, and increasing job opportunities in the renewable and atomic energy sector ("National Transformation Program" 2016). NTP 2020 also laid out localizing a percentage of the nuclear and renewable energy sector as strategic objectives.

According to the 2016 National Transformation Plan, Saudi policy makers seem to think that the way to achieve a significant degree of localization in the nuclear sector is to invest in new nuclear reactor designs called Small Modular Reactors (SMRs). The kingdom has initiated a joint venture with South Korea to develop one SMR design
called SMART (IAEA 2015; Lee 2016). It has also entered into agreements with China to explore high-temperature gas-cooled reactors, another class of SMR designs (WNA 2017b). The underlying belief seems to be that such technologies have a high potential for deployment in the Middle East and North Africa (MENA) region.

In this paper, we examine how compatible SMRs are with Saudi Arabia’s interest in localization, and assess the potential for localizing SMRs in Saudi Arabia. It starts with two sections that summarize the background for Saudi Arabia’s interest in nuclear power and in SMRs, and some of the claims made about the benefits of SMRs. This is followed by a section discussing localization. We end with a brief comparison of localization in another realm: Solar photovoltaics.