In this week’s newsletter, we highlight China’s recent activity in Eastern Europe as it moves closer to completing its Hualong reactor design. We also note a recent Supreme Court decision regarding the zero-emissions credit programs in New York and Illinois, affirming the right of other states to take on similar programs. Lastly, we include a report published by the UK’s Nuclear Innovation & Research Advisory Board (NIRAB) that encourages the UK government to invest more in nuclear power in order to boost innovation in the field.
Game of Thrones apparently has switched locations from the Shivering Sea to the shimmering sands of Saudi Arabia. This is the unavoidable impression offered by a stream of speculation and palace intrigue over the potential sale of two nuclear reactors to the kingdom.

There are several threads that run through this highly-charged nuclear debate that should be disentangled. One is the belief that the U.S. is trying to end-run its own non-proliferation standards and approval processes. Second is the questioning of Saudi Arabia’s desire for nuclear power. Third are the implications of Russia and China becoming the kingdom’s nuclear supplier. And fourth is the value of the technology and standards of the U.S. and its allies in these nuclear builds.

The U.S. has had a trifecta of miscues in the Saudi process, providing ample fuel for critics.

It is clear that there was a very misguided effort in the early months of the new administration to get approval for a document that outlined how the U.S. could supply technology to Saudi Arabia. There was a suggestion that this could be done without consulting Congress. That would be illegal and also easily detected . The Congress is not blind, and whistleblowers would have come out of the woodwork, as they already have, to draw attention to efforts to circumvent congressional authority. The White House document was never acted on, but its existence cast a long and lingering shadow over U.S.-Saudi discussions.

That specter intensified because the administration took the unusual step of giving the Department of Energy rather than the Department of State the lead responsibility in negotiating the required 123 nuclear cooperation agreement. That upset the regular order in Washington and raised concerns about the forcefulness with which the U.S. would pursue strong non-proliferation commitments from Saudi Arabia. But high-level administration officials so far have made the right responses, pledging their commitment to achieving the Gold Standard or getting close to it.

A third strike for the administration’s strategy was its decision not to make public, or to brief Capitol Hill on, the approval of seven Part 810 export applications from U.S. companies. These are necessary to initiate discussions on nuclear technology with Saudi officials. These companies were playing by the rules, not trying to circumvent them. Even though they were not approvals to transfer technology as some have suggested, the opaque process fed into the negative narrative. This has led to a congressional backlash that, if acted upon, will further hobble already limping U.S. nuclear exports.

Complicating the situation are the serious mistakes that the Saudis have made. They may have legitimate reasons for wanting nuclear power. Their first step across the civil nuclear threshold will come later this year with the completion of an Argentina-produced research reactor. But statements about matching a potential nuclear weapons program by Iran, pushing back on U.S. nonproliferation demands, and an unwillingness to accept the IAEA’s more intrusive inspection regime have raised real questions about their commitment to the peaceful use of nuclear power. The Khashoggi case has further curdled congressional support for the current Saudi leadership. This collectively has impeded the completion of a U.S.-Saudi nuclear cooperation deal and led to calls to end the negotiations.

Eagerly eyeing this smoldering landscape are Russia and China, both still in the running for Saudi Arabia’s business. Neither is limited by a critical Congress or the need to adhere to America’s high non-proliferation requirements. And both are financially backed by their governments and fully integrated into their geostrategic objectives. In the Middle East, Russia already has a nuclear foothold in Iran and an agreement with Egypt to build four large nuclear power plants among numerous other MOUs. Handing the Saudi nuclear business to either of these authoritarian governments will be self-defeating for the U.S., its allies, and their geopolitical objectives.

The other active nuclear supplier in the Middle East is South Korea, which is building four reactors in UAE that contain substantial U.S.-origin technical content. While Korea and the U.S. are now competing for the Saudi reactors, the kingdom’s decision to push back its decision on the ultimate winner until 2020 (and likely after the U.S. presidential election) presents the time and opportunity for the U.S. and Korea to explore a joint reactor offer that would benefit both countries and global security. But it will take a significant political and diplomatic effort to reconcile the hard-charging corporate competitors in both countries to make this work.

The Saudi decision to pursue nuclear power has generated concerns, conspiracies, and the conflation of many separate issues into one dark narrative. But the Saudi delay in making a final decision has opened the opportunity for a rethinking of the competition. The U.S. and Korea together can counterbalance the influence of Russia and China in the region, offer some solace to a skeptical Congress that the U.S. is not going it alone, and provide a blueprint for future fruitful joint nuclear initiatives. Their technical capabilities are complementary, they have a collaborative nuclear history, and their democratic and nuclear security credentials are an important barrier to the potential for proliferation. The real game is preventing a nuclear arms race in the Middle East.

Ken Luongo, President of Partnership for Global Security
There is a strong case to be made for the societal value of nuclear power in the 21st century that is compelling and globally important.
Nuclear Policy, Governance, and Geopolitics
China is taking the leading role in nuclear power construction, with 54 nuclear power units under construction in 17 countries in 2018, according to remarks by China National Nuclear Corporation Chairman Yu Jianfeng at the China Nuclear Energy Sustainable Development Forum.

Chinese Premier Li Keqiang met with the prime ministers of the Central and Eastern European Countries (CEEC) and called for closer bilateral ties to better align China’s One Belt One Road Initiative with the development strategy of the region. Separately, Vice President Pence addressed NATO foreign ministers in Washington DC to mark the 70th anniversary of the alliance and said NATO must adapt to meet the challenge of the “easy money offered by China’s Belt and Road Initiative.”

China’s first Hualong reactor is to finish ahead of schedule, beating out other foreign designs which are being held back by construction delays and cost overruns. The first foreign project using the Hualong reactor is under construction in Pakistan, while the reactor is also currently in the run for projects in Argentina and the UK.

Brazil’s national energy plan for 2050, which will be made public by the end of the year, will consider new nuclear power plants, including advanced reactor technologies and small modular reactors (SMRs) to meet the nation’s growing electricity demand.

The Spanish Nuclear Industry Forum invited the Vice-Chair of the United Nations Intergovernmental Panel on Climate Change (IPCC) to present in Madrid the " Global Warming of 1.5 °C" report, as well as the role of nuclear energy in reducing emissions.

The International Atomic Energy Agency (IAEA) and UzAtom have started the process of siting Uzbekistan’s first nuclear power plant (NPP), as current projections indicate that the country will need to double its electricity output by 2030 in order to meet demand. The chosen Russian-designed twin VVER unit is expected to generate about 15% of Uzbekistan’s power needs by 2030.

UK renewable energy company, Greencoat Capital, is in talks  to bid for a multibillion-pound stake in the UK’s existing fleet of nuclear power plants, marking the firm’s first move into nuclear power. It plans to create a new investment fund with the aim of acquiring a minority share in eight nuclear power stations from EDF Energy and Centrica.

Egypt's Nuclear Power Plants Authority has received a site approval permit for the El Dabaa site from the Egyptian Nuclear Regulation and Radiological Authority.

Saudi Arabia plans to issue a multi-billion-dollar tender in 2020 to construct its first two nuclear power reactors, with U.S., Russian, South Korean, Chinese, and French firms currently in talks with Saudi Arabia to supply the reactors.

The IAEA is asking Saudi Arabia to agree to the comprehensive safeguards agreement on nuclear materials that could be arriving by the end of the year for its first research nuclear reactor.
Domestic Civil Nuclear Developments
The Supreme Court declined to take up cases challenging state zero-emissions credit programs in New York and Illinois, affirming the right of states to undertake similar programs and giving a major boost to clean energy programs that favor all forms of carbon-free generation.
Ohio’s House of Representatives will hear a clean energy bill designed to save the state’s two nuclear power plants from retirement and encourage the building of new renewable facilities.
U.S. Senators introduced legislation that would require the executive branch to disclose which companies it allows to share nuclear information with other countries. This follows the letter that U.S. Senators Marco Rubio and Bob Menendez sent to Secretary of Energy Rick Perry asking for further clarifications about the Administration's approval for U.S. companies to sell nuclear energy technology to Saudi Arabia. Separately, the Nuclear Regulatory Commission (NRC) stated that it was consulted over the part 810 authorizations from the Energy Department to share nuclear energy information with Saudi Arabia.
Nuclear Security and Technology
The Energy Department's Office of Cybersecurity, Energy Security, and Emergency Response (CESER) plans to develop a resilient cybersecurity infrastructure for the energy and utility industries by 2020 that can survive a cyber attack and other emerging threats while maintaining integral operations.
Noteworthy Research
The UK’s Nuclear Innovation & Research Advisory Board (NIRAB) in a new report, has recommended that the government should consider investing up to $1.3 billion between 2021 and 2025 to boost the progress of innovation in the nuclear energy sector.
The Nuclear Conversation
Arms Control Wonk, April 16, 2019
Anchorage Daily News, April 14, 2019, April 10, 2019
New York Times, April 6, 2019
Daily Times, April 5, 2019
For more than two decades, the Partnership for Global Security (PGS) has developed actionable responses to global security challenges by engaging international, private sector, and multidisciplinary expert partners to assess policy needs, identify effective strategies, and drive demonstrable results.
1400 I (Eye) St. NW, Suite 440
Washington, DC 20005