El Dabaa Nuclear Power Plant Will Benefit Egypt’s Economy in Many Ways: Rosatom

Press release
Published February 26th, 2018 - 05:58 GMT
Dr. Yousry Abu Shady, former IAEA Chief Inspector
Dr. Yousry Abu Shady, former IAEA Chief Inspector

After the contracts for the El Dabaa nuclear power plant were signed last December, Egypt is finally entering a new stage of fulfilling its long-held nuclear dream. Already speculation is rife as to what the El Dabaa project – already dubbed the deal of the century – will mean to Egypt and its people in practical terms. And, whichever way you look at it, quite apart from the historic and symbolic significance of the project, its benefits can hardly be overstated. So what are the tangible benefits that Egypt stands to gain from the NPP project coming to fruition?

Firstly and most obviously, there is the electricity that will be generated at the El Dabaa NPP, which will go a long way towards meeting Egypt’s energy demand, which has been growing at a rate of more than 10% a year since 2010.  Former IAEA Chief Inspector Dr Yousry Abu Shady says: “The power generation from these fourVVER-1200 units [of the El Dabaa NPP] when completed should contribute to over 10% of the total power generation in Egypt.’ This will allow Egypt to increase its energy exports, which are at the moment stand at only 12.10 kW per capita, which is 50 times less than of the European average. As Dr Abu Shady highlights the detrimental impact of Egypt’s current reliance on hydrocarbons (which presently account for 90% of Egypt’s total power generation) has on the country’s economy and environment, ‘The current burning of fossil fuels (natural gas, petrol and coal) causes significant environmental pollution and a great loss of sources for valuable petrochemicals and the income of the state.’

To Egyptian consumers, the energy produced at the El Dabaa NPP will likely mean a reduction in electricity tariffs. Dr Abdel Aty Salman, former Chairman of the Nuclear Materials Authority of Egypt, cites the average global prices for different types of power generation, ‘Nuclear power is considered the cheapest energy source compared to other technologies. The price for kilowatt/hour for nuclear amounts on average to 3.2 cents, while the most expensive electricity is attributed to oil and gas, with prices reaching 11.2-13.0 cent / kWh.’

Not only that, but, as Dr Aty Salman points out, ‘Adding nuclear energy to Egypt’s energy mixt is some sort of diversification, in addition to other advantages of nuclear energy, including but not limited to sustainability, minimal waste, and economic benefits.’ Dr Abu Shady concurs, ‘Nuclear power, together with renewables, produces clean energy with no pollution or CO2 emissions. Nuclear power’s main advantage is its stability and continuous production every hour day and night for over one year with a short break to refuel.’  At the same time, as Dr Aty Salman stresses, ‘The production cost of renewables is very high compared to nuclear power, while their respective production capacities are still limited’, which means that, according to Dr Ali Abd El-Nabie, former Deputy Chairman of the Nuclear Power Plants Authority, ‘If Egypt is to reach its national goal of generating 20% of our electricity through renewable energy in the next few years, nuclear power is the most realistic, safe and environmentally friendly choice.’

Power generation is, however, only the tip of the iceberg in considering the impact of the El Dabaa NPP on Egypt’s economy. Due to the sheer scale and complexity of the El Dabaa project as Egypt’s first nuclear power plant, it will inevitably have a knock-on effect on the development of other industries needed to establish and support the extensive nuclear infrastructure. Dr. Ali Abd El-Nabie, former Deputy Chairman of Egypt’s Nuclear Power Plants Authority,  ‘The El Dabaa NPP construction will contribute to the development of Egyptian industry through a long-term program, in which local manufacturing share increases according to a clear and committed plan.’ Initially, the involvement of Egyptian companies in the El Dabaa NPP construction will amount to around 20%, which is already considered a high level, and will increase with each subsequent unit of the NPP as local players gain more experience and adapt their production facilities to make them suitable for NPP needs.

Even more significantly, the El Dabaa NPP project will therefore have a considerable effect on increasing Egypt’s GDP not only via driving local subcontractors’ revenues but also through stimulating growth in related industries such as construction materials, equipment and machinery, utilities and other services rendered. Furthermore, it will contribute to increasing the population’s purchase power and, consequently, in contracts for the consumer goods and services sector. The need for thousands of qualified cadre to operate the plant and service Egypt’s burgeoning nuclear industry will mean increased investment in educating and training specialists in nuclear sciences and related fields, which will in turn lead to an overall improvement in educational standards and job opportunities available to Egyptians in multiple fields including research and development, engineering, construction, IT and many others.

All Egyptians will also benefit from the tax revenues of the El Dabaa project during the construction stage, both at a national and regional level. Its scale and importance to the local economy mean that a nuclear power plant typically becomes one of the region’s biggest taxpayers, which in turn drives the quality of life. Overall, the economic impact of the El Dabaa NPP – projected to be in the billions of US dollars (‘Egypt’s income from the four El Dabaa nuclear reactors over their operational life may exceed $300 billion,’ says Dr Abu Shady) – is hard to overestimate as its impact will be felt far beyond the bare finances but will have a thoroughly transformative effect on Egypt’s economic development in the observable future.

Background Information

ROSATOM

The State Atomic Energy Corporation ROSATOM is one of the global technological leaders. The company has assets and competencies to work at all stages of the nuclear production chain from uranium mining to decommissioning of nuclear facilities and spent nuclear fuel management.ROSATOM brings together about 400 enterprises and organizations, including the world's only nuclear icebreaker fleet. It is the largest electricity generating company in Russia, accounting for 18.7% of the country’s total generation of electricity. ROSATOM is the third in the world in nuclear power generation.The corporation is the global leader in simultaneous implementation of NPP power units and has the largest portfolio of foreign construction projects (36 NPP units in 12 countries). ROSATOM manufactures equipment and produces isotopes for nuclear medicine, carries out research and material studies. It also assembles supercomputers and designs software as well as different nuclear and non-nuclear innovative products. The company has business ventures covering various clean energy projects, including wind energy. ROSATOM has second largest uranium reserves and 17% of the global nuclear fuel market.

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