Power consumption has risen by an average rate of 10.5 percent over the last 10 years DOHA: Qatar may decide as early as next year on whether to develop nuclear power capabilities as the gas-rich Gulf state looks to wean its dependency away from hydrocarbons. Qatar, an independent emirate that sits on the world's third-largest natural gas reserves behind Russia and Iran, is seeking to diversify its power generation portfolio to reduce its dependency on gas in the production of electricity, and to free up the resource for other purposes such as petrochemical production and for export in liquid form. “We are trying to see whether nuclear (power) will be good for the state of Qatar or whether it will be a collective project in the GCC (Gulf Cooperation Council),” Qatar General Electricity & Water Corp., or Kahramaa, acting managing director Essa Hilal Al Kuwari said at a recent industry event. Al Kuwari said initial findings from a feasibility study to determine if Qatar could use nuclear power to help it meet its soaring energy demand are expected by the end of this year. A decision on whether to pursue atomic energy may follow in 2011. Energy demand has risen rapidly over recent years in Qatar and neighboring states in the Gulf, the world's top oil-producing region, driven by rapidly growing populations, billions of dollars worth of infrastructure investments and economic diversification plans that involved developing new industries such as steel and petrochemicals. In a 2007 study, the International Atomic Energy Agency, or IAEA, concluded that it would be economically viable for GCC states to invest in nuclear energy. The six-member bloc-made up of Qatar, Saudi Arabia, the United Arab Emirates, Kuwait, Oman and Bahrain - is still mulling a joint atomic energy initiative. However, countries such as the UAE have already taken concrete steps towards developing nuclear power capabilities on their own to reduce their dependence on natural gas, which is the main feedstock used in power generation in the region. Regional countries including Qatar are also mulling nuclear in a bid to safeguard their energy security against the expected long-term rise in fossil fuel prices. “If you have 100 percent of electricity generation in your country based on gas you have a security risk of your entire power generation base. One aspect is to diversify security of supply by diversifying your fuel source. One day when hydrocarbons are no longer cheap or easily available you've got a different power generation source (nuclear),” said Matthew Nathan, director of project finance for the Middle East and North Africa at HSBC. Qatar's power consumption has risen by an average rate of 10.5 percent over the last 10 years, Kahramaa figures show, and production is set to hit 8,761 megawatts in 2011. Production of desalinated water, which requires large amounts of power, is expected to increase 24 percent to reach 325 million imperial gallons per day from current levels to the end of 2012. Despite the region's hydrocarbon riches, natural gas - a preferred fuel because of its lower carbon emissions- is in short supply in the Gulf due to the dramatic increase in consumption in recent years. Saudi Arabia is burning heavy fuels in many of its power plants because of limited gas availability. The UAE too is facing challenges securing enough gas to meet its energy needs- one reason for the country's decision to go nuclear. Qatar, the world's largest producer of liquefied natural gas, is the only country in the region, which doesn't face a shortage of the fuel at present - yet, with much of the resource earmarked for export and a ban on further development at its giant offshore North Field, there is a limit on what can be consumed locally. If Qatar builds up its power generation capacity using nuclear it would be able to trade surplus electricity on the GCC grid, which - on expected completion in 2011 - will allow all six member states to sell electricity to each other. “Without the GCC grid there is no chance for nuclear in Qatar,” said Yousef Janahi, Kahramaa corporate planning manager. “The GCC grid can help in accommodating nuclear units from a network stability point of view.” The region is looking into ways of developing nuclear power to diversify energy supply that would also act as a hedge against high oil prices. Demand for energy has soared in the region over recent years as countries pour billions of dollars into infrastructure projects and the industrial sectors such as steel and petrochemicals to diversify their economies.
