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Cablegate: Ambassador, Electricity Minister Discuss Nuclear

VZCZCXYZ0000
PP RUEHWEB

DE RUEHEG #1146/01 1571343
ZNR UUUUU ZZH
P 051343Z JUN 08
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC PRIORITY 9455
INFO RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS CAIRO 001146

SIPDIS

ISN/RA FOR STUKALIN
NEA/ELA FOR NAFZIGER

E.O. 12958: N/A
TAGS: ENRG EWWT SENV IAEA EG
SUBJECT: AMBASSADOR, ELECTRICITY MINISTER DISCUSS NUCLEAR
ENERGY COOPERATION, CONVENTIONAL POWER AND RENEWABLE ENERGY
SOURCES

REF: CAIRO 190

1. Summary: During the Ambassador's introductory call on
Electricity and Energy Minister Hassan Younes June 3, Younes
expressed interest in renewing bilateral cooperation on
civilian nuclear power, and specifically requested technical
assistance training on regulatory matters. Younes said that
the GOE has finalized its draft nuclear regulatory bill in
consultation with the IAEA and plans to submit the bill to
parliament in the fall of 2008. He noted that the GOE plans
to finance its nuclear power industry with public funds.
Younes said that the GOE has a plan to add to its annual
conventional electricity production capability through 2027,
and is committed to developing solar and wind power. The
Ambassador reaffirmed U.S. support for a bilateral
partnership to develop Egyptian civilian nuclear power, and
noted that Ambassador Wolcott's delegation would discuss
specific means of cooperation during its June 8-9 visit to
Cairo. The Ambassador advocated on behalf of Bechtel's
nuclear consulting bid, and Emerson Corporation's bid to
upgrade controls at a conventional power plant. End Summary.


--------------------------
Nuclear Energy Cooperation
--------------------------

2. The Minister praised previous U.S.-Egyptian nuclear energy
cooperation efforts, and said he is interested in renewing
this partnership. Minister Younes said he and Energy
Secretary Bodman agreed in January (reftel) to continue
bilateral cooperation on nuclear and conventional power. The
Ambassador noted Ambassador Wolcott's upcoming June 8-9 visit
to Cairo, and said that the U.S. delegation will be
discussing bilateral nuclear energy cooperation with GOE
counterparts. The Ambassador said that the U.S. hopes to
partner with the GOE to develop Egyptian resources and
technical capacity for civilian nuclear energy. The
Ambassador urged the Minister to strongly consider Bechtel's
bid for the nuclear power plant consulting contract the GOE
is currently reviewing. The Minister noted that, separately,
Bechtel has formed a partnership with an Egyptian company to
develop conventional power plants in Egypt.

3. Younes said that following close consultation with the
IAEA, the GOE has finalized its draft bill that will
establish an independent regulatory structure for licensing
nuclear power plants. Younes noted that the GOE had worked
with the IAEA to ensure that the draft bill complies fully
with international regulations. He said that the GOE plans
to introduce the bill to parliament during the November 2008
fall session. Younes said that the GOE plans to fund the
nuclear power plants "100 percent" with public money in order
to mitigate the high risk involved in such a venture. He
said that the GOE had studied neighboring countries' attempts
to begin a civilian nuclear industry, and concluded that all
private efforts had failed. Younes assessed that if the GOE
assumed the financial risk, with the assistance of loans from
international funding agencies, the overall cost of the
project would be lower. He expressed an interest in
receiving technical assistance from the U.S. to train his
staff in nuclear regulatory issues. The Ambassador suggested
that the Minister could visit Oak Ridge or Sandia National
Labs to view U.S. nuclear research.

------------------
Conventional Power
------------------

4. Younes said that the GOE plans to add 1500-1700 Megawatts
annually to its conventional electrical power capability
through 2027. He noted that GOE-owned, privately operated
companies supply electrical power to Egyptian consumers with
subsidized fuel, lowering prices significantly. The
Ambassador said that a U.S. Company, Emerson Corporation, is
bidding on a contract to upgrade controls at the West Delta
Power Plant, and encouraged the Minister to consider its bid.
The Ambassador said that Emerson had discounted its bid, and
that its Japanese competitor had then done the same. The
Minister said that the GOE would not take the discounts into
consideration when choosing between the two companies, but
would plan to pay the eventual contract at the discounted
price.

----------------
Renewable Energy
----------------


5. Younes said that Egypt is exploring energy alternatives to
fossil fuels, such as nuclear, solar and wind power, out of
necessity. He said that fossil fuels are increasingly
expensive, are a limited and finite resource, and are in
great demand from consumers. He noted that Egypt has much
potential for harnessing renewable energy sources, and said
that in cooperation with the Danish Reno Institute, Egypt had
finalized a "wind atlas" that has tracked Egyptian wind
patterns over the past several years. The Minister said that
solar power is very expensive, but the GOE has started work
on a solar-thermal power plant, in cooperation with a similar
plant in California, that is scheduled for completion in
2010.
SCOBEY

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