UAE Says It Will Pursue Nuclear Energy

ABU DHABI, The United Arab Emirates — The United Arab Emirates, holder of almost 10% of the world's oil reserves, plans to pursue a peaceful nuclear energy program to offset a shortage in natural gas supply amid growing demand for electricity.

The U.A.E. considers nuclear energy a cheaper alternative to oil in generating electricity and expects demand for power to triple to 41,000 megawatts by 2020, Foreign Minister Sheikh Abdullah bin Zayed Al-Nahyan said in a speech, a copy of which was received by Bloomberg in advance. "Nuclear energy represents a commercially competitive option, particularly in light of projected future shortages of natural gas."

Power demand in the U.A.E. is surging as it uses record oil revenue to develop new industries and infrastructure. Abu Dhabi, the biggest of the U.A.E.'s seven emirates, will need to build additional power capacity this year to avoid a blackout in 2012, according to a study published last month by the Abu Dhabi Electricity & Water Co.

Abu Dhabi started importing natural gas from Qatar this year because its own deposits are too high in sulphur, making it too costly to process for power plants. U.A.E. power demand is rising 9% a year on an oil-fueled economic boom, Moody's Investors Service has reported.