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Cablegate: Czech Republic: All Conflicted About Nuclear Energy

VZCZCXRO2512
RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHPG #0112/01 0511307
ZNR UUUUU ZZH
R 201307Z FEB 08
FM AMEMBASSY PRAGUE
TO RUEHC/SECSTATE WASHDC 0079
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 PRAGUE 000112

SIPDIS

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: ENRG ECON PGOV PREL EZ
SUBJECT: CZECH REPUBLIC: ALL CONFLICTED ABOUT NUCLEAR ENERGY

REF: A. PRAGUE 992
B. PRAGUE 256
C. PRAGUE 77

1. (SBU) SUMMARY AND COMMENT: It is difficult to imagine how
the Czech Republic will meet its future electricity demand
AND new EU CO2 emissions cuts without expanding its nuclear
power plants. At the same time, nuclear energy is arguably
the one issue that could cause the Green Party to walk and
bring down the government coalition. Reflecting this
reality, Czech nuclear energy policy is guided by two
conflicting policy guidelines: (1) the coalition agreement,
prohibiting expansion or even planning for expansion of
existing nuclear facilities; (2) the Czech Energy Concept
Paper for 2005-2030 approved by the previous government, that
calls for construction of two additional nuclear reactors.
In practice, implementing government Ministries and
institutions are doing as much as possible, as silently as
possible, to pave the way for nuclear expansion by 2020, when
domestic demand is expected to outpace domestic supply.
However, there is only so much that can be done silently to
ensure timely expansion of nuclear energy to meet future
energy demands. The government could be forced to reconcile
the two conflicting policy documents in the latter part of
2008 when an updated Czech Energy Concept paper is due for
government approval. Unlike most other contentious issues in
the Czech Republic, government consensus is the key obstacle
whereas Parliamentary support is overwhelmingly for expansion
of nuclear energy. END SUMMARY AND COMMENT.

THE NUCLEAR APPEAL
------------------
2. (U) As reported in ref A, the unified message from the
Czech energy industry is that nuclear generation is the only
option available to the Czech Republic that reduces carbon
emissions, increases energy security, and effectively meets
growing domestic demand. Even though the Czech Republic is
supposed to increase its use of renewable energy assets from
the current 3% to 13.5% by 2020 under new EU regulations,
this is widely regarded -- even among some members of the
Green Party -- as pure science fiction. CEZ - the Czech
electricity monopoly that is 66.7% owned by the government --
currently generates 64% of electricity via 16 coal power
plants, 30% with two nuclear power plants, and the remainder
via gas and renewables.

3. (U) Nuclear energy makes sense for the Czech Republic not
just in terms of energy efficiency and emissions control, but
also because the GOCR has faced less popular and
Parliamentary opposition to nuclear energy expansion than its
neighbors Germany or Austria. In terms of public acceptance
to the two existing nuclear plants, 80% of local residents
support Dukovany whereas 50% of local residents support
Temelin, despite the superior safety and security features at
Temelin. Temelin Communications Department Head Milan Musak
believes this is explained by local economic conditions.
Dukovany is in an extremely poor area, where people's
livelihoods and jobs depend more heavily on Dukovany than is
the case in the relatively prosperous region around Temelin.


NUCLEAR EXPANSION TIMELINE
--------------------------
4. (SBU) According to CEZ Executive Director for Power
Generation Vladimir Hlavinka, domestic electricity demand
will exceed supply somewhere around 2020. Regarding the
timeline required for expanding nuclear energy, he explained
that the construction and test phase takes seven years,
territorial approval three years, the environmental impact
assessment (EIA) two years, and the EU public tender process
also two years. Given that both the EIA and the public
tender process must be completed before a territorial
approval can be requested, the two processes must begin in
2008. Hlavinka told emboff that he does not/not need
government permission per se to begin the EIA. However, CEZ
management believes starting the EIA could trigger a
government crisis, which is not good for its majority
shareholder -- the Czech government.

GREEN PARTY "CRAZY TALK"
------------------------
5. (SBU) The political dilemma stems almost completely from
the presence in the governing coalition of the Green Party,
which is strongly anti-nuclear and anti-coal. For those
responsible for ensuring adequate electricity supply to
enable the Czech economy to keep growing, the Greens' policy
is crazy talk. The current coalition agreement prohibits
expanding or even planning for the expansion of nuclear power
plants. The same coalition agreement also puts restrictions
on coal mining expansion. According to Ministry of Industry
and Trade (MPO) experts, to be against coal and against
nuclear at the same time for the Czech Republic is "technical

PRAGUE 00000112 002 OF 002


nonsense."

6. (SBU) Consequently, there are many, especially within MPO,
who simply disregard the current coalition agreement on
nuclear energy. These bureaucrats point out that PM
Topolanek himself has said publicly that nuclear energy is
essential to meeting future Czech energy demands. Still
other argue that the Czech Energy Concept paper was approved
by the previous government so unless the current government
actively overturns it -- which they have not -- then the
paper stands. One MPO contact even insisted, "our obligation
is to the Czech State, not temporary politicians." Another
MPO contact admitted, "we pretend we didn't notice (the
coalition agreement) and we stick to this material (the
energy concept paper)."

7. (SBU) Instead of nuclear and coal, the Greens believe gas
is the answer for the future. Although gas power plants can
be built relatively quickly (2-3 years), both from the
economic (increasing prices) and energy security (increasing
dependence on Russia) perspectives, this is far from
desirable. Martin Bursik, Deputy Prime Minister, Minister of
Environment, and the Green Party Chairman, seemed to discount
the concerns regarding energy dependence when he recently
told the Ambassador that Russia has been a stable strategic
partner. In his view, Europe's relationship with Russia in
the areas of energy had to be resolved by the EU as a whole,
not by the Czech Republic alone.

PACES COMMISSION: THE HONEST BROKER?
------------------------------------
8. (SBU) As mandated by Czech law, the Czech energy concept
paper must be updated every five years. The next draft is
due by end-2008, which must then be presented to government
for approval. MPO indicates that the substance will largely
be based on the findings of the Paces Commission. Head of
the Czech Academy of Sciences Vaclav Paces has been given the
dubious honor of assessing future Czech energy needs. There
are conflicting expectations about whether the Commission
will "only" assess the domestic energy needs or also make a
policy recommendation explicitly supporting nuclear energy
expansion. Still, others expect the Commission to "punt" and
postpone the problem as long as possible by submitting
various scenarios for energy demand. While the Commission's
endorsement of nuclear energy expansion would be helpful, the
CEZ Executive Director for Power Generation said that alone
would not trigger CEZ starting its environmental impact
assessment for nuclear power expansion.

CZECH NUCLEAR ENERGY ASSETS
---------------------------
9. (U) In 2006, nuclear generated electricity accounted for
42% of total CEZ electricity generation (26 TWh out of 62 TWh
total). CEZ is the second largest exporter of electricity in
Europe after EDF of France. There are currently six nuclear
reactors at two nuclear energy plants in the Czech Republic.
The older Dukovany plant (est. 1985) in southern Moravia has
four VVER 440 reactors of Soviet design and technology.
Temelin (est. 2004) in south Bohemia close to Austria, has
two VVER 1000 reactors of Russian technology and American
control system.
Graber

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