Competition from cheap hydrocarbons poses a greater threat to atomic power than the political backlash after Fukushima, according to the chief executive of the consultancy behind the UAE's nuclear programme.
The failure of Japan's Fukushima nuclear plant to withstand an earthquake and tsunami last March sparked fears that popular concerns and higher insurance and construction costs could stifle a nuclear renaissance. But nearly a year later, the biggest hurdle is freshly opened shale gas resources that are pushing the price of conventional energy to record lows.
"It's the economics that's the biggest issue right now," said Lee McIntire, the chairman and chief executive of CH2M Hill, the Colorado consultancy that is helping to manage Abu Dhabi's civil nuclear power programme. "You've got shale gas being developed around the world, so the cost of gas is historically low. If you're in the nuclear industry right now, the cost of alternative fuels is probably the biggest headwind."
New technology has allowed oil companies to access natural gas locked in shale formations, prompting the US, a gas importer, to begin converting at least one gas import terminal into an export site. Yesterday, the price of Henry Hub, the natural gas benchmark, was US$2.50 per million British thermal units, down from a high of $13.28 in 2008.
In Japan's Fukushima Prefecture, officials are still working to gauge the effects of radiation leakage, and the International Atomic Energy Agency, the UN's nuclear watchdog, is setting up an office to monitor the situation first-hand. The accident has also put a damper on the Japanese economy, with the government asking the nation's banks to provide ¥1 trillion (Dh47.33 billion) in loans to prop up Tepco, the plant operator. Elsewhere Germany, Italy, Switzerland and Belgium have announced phase-outs or halts in their nuclear programmes.
Even so, governments from Kuala Lumpur to Beijing remain undeterred. The International Energy Agency forecasts that nuclear power generation will grow by 70 per cent through 2035.
The UAE, with a US$20 billion (Dh73.46bn) plant in the works, is set to become the first Arab nation with nuclear power. In the region, Jordan and Saudi Arabia are the next most advanced in their plans, with Saudi officials saying as many as 60 reactors could be built.
CH2M Hill, which has a 10-year contract to manage Abu Dhabi's programme, is eyeing contracts with other emerging nuclear nations, said Mr McIntire.
"It definitely slowed everything down while people reconsidered," he said. "But there's 400 reactors around the world and the programme keeps progressing … The world's nuclear programme continues to move forward."
For developing nations with a hunger for energy, concerns about accidents or the unresolved question of where to store radioactive waste in the long term are outweighed by its pluses: zero carbon emissions and the low operating cost.
Construction costs could rise from redesigns for seismic factors raised after Fukushima, said Mr McIntire. Public relations could also add to the budget.
"It has to be more and better communications," he said. "They tend to focus on the regulatory side of things and what they need to focus on better is the public. Make sure the public has information."
In the US, new nuclear plants may also face difficulties getting off the drawing board because of the bankruptcy of the solar company Solyndra.
The California manufacturer, in which Abu Dhabi's Masdar was a minority investor, benefitted from $535 million in loan guarantees from the US government, prompting a Republican backlash against the loan programme that also backs nuclear plants.
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