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Too costly to matter: Economics of nuclear power for Saudi Arabia

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  • Ahmad, Ali
  • Ramana, M.V.

Abstract

Saudi Arabia has ambitious plans for nuclear power. Given this context, this paper examines the economics of nuclear power and compares it to two other sources of electricity, natural gas and solar energy. It calculates the costs of electricity generation, water desalination and the opportunity cost associated with forgone oil and gas revenues. A sensitivity analysis is included to account for variations in important parameters within the comparative cost analysis. Our results suggest that for a large range of parameters, the economics of nuclear power are not favorable in comparison with natural gas, even if the currently low domestic natural gas prices in Saudi Arabia were to rise substantially. Further, electricity from solar plants has the potential to be cheaper than nuclear power within the next decade if the rapid decline in solar energy costs in the last decade continue, i.e., before the first planned nuclear power plant would be completed. However, unless the price of oil drops substantially below current values, it would be more economically optimal to export the oil than using it for generating electricity.

Suggested Citation

  • Ahmad, Ali & Ramana, M.V., 2014. "Too costly to matter: Economics of nuclear power for Saudi Arabia," Energy, Elsevier, vol. 69(C), pages 682-694.
    • Handle: RePEc:eee:energy:v:69:y:2014:i:c:p:682-694
    DOI: 10.1016/j.energy.2014.03.064
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    3. Hsiao, Cody Yu-Ling & Chen, Hsing Hung, 2018. "The contagious effects on economic development after resuming construction policy for nuclear power plants in Coastal China," Energy, Elsevier, vol. 152(C), pages 291-302.
    4. Chandrasekharam, Dornadula & Baba, Alper & Ayzit, Tolga & Singh, Hemant K., 2022. "Geothermal potential of granites: Case study- Kaymaz and Sivrihisar (Eskisehir region) Western Anatolia," Renewable Energy, Elsevier, vol. 196(C), pages 870-882.
    5. Griffiths, Steven, 2017. "A review and assessment of energy policy in the Middle East and North Africa region," Energy Policy, Elsevier, vol. 102(C), pages 249-269.
    6. Geissmann, Thomas, 2017. "A probabilistic approach to the computation of the levelized cost of electricity," Energy, Elsevier, vol. 124(C), pages 372-381.
    7. Cartelle Barros, Juan José & Lara Coira, Manuel & de la Cruz López, María Pilar & del Caño Gochi, Alfredo, 2016. "Probabilistic life-cycle cost analysis for renewable and non-renewable power plants," Energy, Elsevier, vol. 112(C), pages 774-787.
    8. Karaveli, Abdullah Bugrahan & Soytas, Ugur & Akinoglu, Bulent G., 2015. "Comparison of large scale solar PV (photovoltaic) and nuclear power plant investments in an emerging market," Energy, Elsevier, vol. 84(C), pages 656-665.
    9. Alaqeel, T.A. & Suryanarayanan, S., 2019. "A comprehensive cost-benefit analysis of the penetration of Smart Grid technologies in the Saudi Arabian electricity infrastructure," Utilities Policy, Elsevier, vol. 60(C), pages 1-1.
    10. Price, James & Keppo, Ilkka & Dodds, Paul E., 2023. "The role of new nuclear power in the UK's net-zero emissions energy system," Energy, Elsevier, vol. 262(PA).
    11. D. Chandrasekharam & A. Lashin & N. Arifi & A. Bassam & C. Varun, 2017. "Desalination of Seawater using Geothermal Energy to Meet Future Fresh Water Demand of Saudi Arabia," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(3), pages 781-792, February.
    12. Cartelle Barros, Juan José & Lara Coira, Manuel & de la Cruz López, María Pilar & del Caño Gochi, Alfredo, 2015. "Assessing the global sustainability of different electricity generation systems," Energy, Elsevier, vol. 89(C), pages 473-489.
    13. Alshammari, Yousef M. & Sarathy, S. Mani, 2017. "Achieving 80% greenhouse gas reduction target in Saudi Arabia under low and medium oil prices," Energy Policy, Elsevier, vol. 101(C), pages 502-511.

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