North Africa, West Asia

Does Jordan need nuclear energy?

Jordan hopes to become self-reliant with the creation of two nuclear power plants. However, in the future, there are dual challenges in the form of cost and safety.

Nikita Malik
29 January 2014

With greenhouse gases increasingly accumulating in the atmosphere, finding ways to produce power cleanly, safely, and affordably is a pressing issue for many governments. Accelerated by the discovery of 70,000 tons of uranium deposits in 2007, Jordan has opted for nuclear power to meet its growing energy needs. In time to come, it will be important to monitor the effect of Jordan’s decision to adopt nuclear power on shifting regional alignments, the evolution of geo-political and country-level risk, and the environmental, economic, and safety repercussions that are likely to result from this choice.

On October 28, Russia’s Rosatom Overseas won the contract to build Jordan’s first nuclear power plant. Many have angled the choice of Rosatom as one of a good fit: the company meets costs according to prerequisite demands by the Jordanian government [1], and has several functional prototypes around the world, reducing potential hidden costs and learning externalities. This outcome was influenced, in part, however, by the automatic exclusion of the United States, which was unable to bid for a tender because of Jordan’s decision to retain the right to enrich uranium. Under terms of the current US – Jordan agreement; Jordan can mine the uranium ore, but not convert it into fuel for nuclear power. Such a pact is unique to dealings with countries in the Middle East, given the United States signed a modified nuclear agreement with Vietnam in early October 2013.

It is hoped that the nuclear plants will shift Jordan’s position from one of dependency on its regional neighbors for oil, to one of self-reliance. Jordan’s profits would be two ended: the first in meeting demand, and the second in meeting supply. On the demand-side, the Hashemite Kingdom would commercially mine and export uranium to its regional and international neighbors with reactor plants, currently, western uranium production (37 kTU) is about half of current consumption (62 kTU)[2]. On the supply-side, Jordan will supply electricity regionally, by delivering highly enriched uranium to fuel reactors, and by providing electricity directly. Jordan has a regional grid connection of 500 MWe with Egypt, 300 MWe with Syria, and is increasing links with Israel and Palestine.

Moreover, the expected expansion of jobs to explore, mine, and regulate uranium in the Hashemite Kingdom is likely to reduce fiscal costs and increase economic growth. Uranium mines also generate royalties: in comparison, Australia obtains AUS$21 million in uranium mining royalties every year. Though it is hoped that Jordan’s nuclear fuel-cycle program will render it less dependent on foreign aid and subsidies, these hopes must consider the potential threat that the spread of nuclear energy infrastructure could have on the proliferation of nuclear weapons in a politically unstable regional backdrop. 

In the future, it is likely that the Jordanian government would regulate the sales process itself, with a possible role for Russia as a strategic partner. In order to reduce uncertainty for the public, the energy companies, and the investors, King Abdullah has relied on the premise that Jordan is a peaceful country that has signed the Nuclear Non-Proliferation Treaty (NTP), and a country that desperately requires economic advancement. It would be worthwhile, however, for the Jordanian government to explicitly state how it will keep material out of the hands of would-be proliferators, perhaps by giving the nuclear waste to a third country to destroy. It could also create further safeguard agreements to make sure civilian programmes do not mutate into military ones. For example, Jordan could insist that customer countries sign additional bilateral safeguard treaties that are even more vigilant than the NPT.

It is clear, however, that power-generation programmes are a pressing need in Jordan, given the linkage between protest and the rising price of basic goods such as electricity. Jordan spends more than a fifth of its GDP importing fuel, and cuts in Egyptian gas and globally unstable oil prices have negatively impacted Jordan’s energy situation. Sources of thermal power, such as the Aqaba thermal power plant, the largest power station in Jordan, have a total generation capacity of only 656 mW. Wind and hydro power are becoming increasingly widespread in the nation, in the form of the Ibrahimyah and Hofa wind power plants, at 0.32 mW and 1.12 mW, and the Jordan river dam. However, their intermittent and variable supply makes them poorly suited for large-scale use. In comparison, the nuclear reactors will produce a combined supply of 2,000 mW of energy. Jordanian officials say the nuclear project will lower electricity costs by 70% and bring domestic energy output from 3% to more than half the of the nation’s needs.

The steady supply of energy is necessary to maintain Jordan’s national security. In 2014, a 5% increase will be levied on domestic subscribers whose monthly consumption is above 1,000kWh, according to the new tariffs. Such a move is likely to increase mass protests, polarization, and populism. It is possible that improving economic growth would reduce the appeal of radical political parties prevalent in Jordan and the region, but high unemployment and rising prices will sustain the demand for political alternatives in the nation. To combat this risk, Jordan signed a memorandum of understanding with China in September 2013, to build a $2.5 billion oil shale-fired power plant in the Kingdom that will produce 900 megawatts of electricity. While this move has brightened prospects of efficient gas-burning power, the plant will be subject to the volatility of natural gas prices, and will still release large amounts of carbon dioxide.

The capital and safety costs involved with implementing nuclear power plants are considerable. Whether these costs can be accurately forecasted remains doubtful, given that a capital intensive and complex technology is at stake. Reactors implemented in Finland and France have run billions of dollars over budget, and public concern about radioactive waste is significant, with no country having a functioning system of disposing of it yet. The implementation of the nuclear reactors in Jordan comes with considerable learning externalities, and it is hoped by proponents of the scheme, such as Toukan, that observing other countries’ experiences will lead to lower construction costs.

In the future, Jordan faces a dual challenge to its nuclear power plants in the form of cost and safety. Waste management disposal, coupled with proliferation risk, in a region marred with political conflict, are significant factors that the government must address to earn public trust. It is possible that high-level cost forecasting, including these hidden and monitoring costs, will paint an accurate picture of the financial risk that is to be expected. Moreover, up-to-date information on plausible accidents can be incorporated into design requirements for nuclear reactors, thereby reducing safety concerns. If the benefits of nuclear power are to the realized in the Hashemite Kingdom, each of these hurdles must be overcome.

[1] Atomstroyexport (ASE), Rosatom’s international arm, will finance 49% of the project, and Jordan will pay for the remaining 51%, taking a controlling share.


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