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Cablegate: Moroccans More Forward-Leaning On Nuclear Energy

VZCZCXYZ0000
PP RUEHWEB

DE RUEHRB #1109/01 3331352
ZNR UUUUU ZZH
P 281352Z NOV 08
FM AMEMBASSY RABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 9380
INFO RUCNMGH/MAGHREB COLLECTIVE
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS RABAT 001109

SENSITIVE
SIPDIS

STATE FOR ISN/NESS, NEA/MAG AND EEB
USDOC FOR 3131/USFCS/OIO/RD/CREED/GLITTMAN, HOLLY
VINEYARD/MAC/ITA/USDOC, MICHELLE ONEILL/OUS/ITA/USDOC
USDOC PLEASE PASS TO USTDA
DOE FOR NNSA

E.O. 12958: N/A
TAGS: ENRG TRGY ETRD TNGD KNNP MO
SUBJECT: MOROCCANS MORE FORWARD-LEANING ON NUCLEAR ENERGY
THAN EXPECTED

REF: A. RABAT 0693
B. RABAT 1058

1. (SBU) Summary: Moroccan government, research, and
industry leaders told Special Envoy for Nuclear
Nonproliferation Jackie Wolcott that the Kingdom is preparing
the necessary infrastructure and legal and regulatory
framework for nuclear power. According to the Minister of
Energy, the decision that Morocco will eventually require
nuclear energy has essentially been made, although the
government is not yet ready to announce this "loudly."
Morocco's nuclear research center is trying to identify the
steps needed to prepare the knowledge and skills base that
will be required to support nuclear power production, but the
National Electricity Office (ONE) seems ready to plunge ahead
on a contract basis, leaving technical details to be managed
by private enterprise. The need for technical, regulatory,
and planning assistance that will accompany progress toward
nuclear power will create opportunities for bilateral civil
nuclear cooperation to help steer Morocco towards a safe,
secure, and non-proliferating path, as well as openings for
U.S. companies with nuclear expertise to supply goods and
services. End Summary.

---------------------------------------------
GOM's Decision Made, U.S. Cooperation Welcome
---------------------------------------------

2. (SBU) Secretary General of the Ministry of Foreign
Affairs and Cooperation (MFA) Youssef Amrani welcomed
Ambassadors Wolcott and Riley to his first official meeting
in his new position. Amrani noted that while the French had
been pushing Morocco hard to accept (French) civil nuclear
power programs, up to now Morocco has not committed to
anything with France. Technical details of collaboration on
nuclear technology and energy would be outside of the MFAC's
purview, Amrani observed, but in general the MFA welcomes all
areas of cooperation with the U.S. "Politically, our
cooperation with you is essential," he stated, and "you will
always find in Morocco a partner you can trust." Amrani also
plugged Morocco's support of global nonproliferation efforts,
including the Global Initiative to Combat Nuclear Terrorism.

3. (SBU) Minister of Energy, Mines, Water and the
Environment Amina Benkhadra told the Ambassadors that Morocco
began considering a nuclear energy industry as early as the
1960's, and envisions power generation "in the 2020
timeframe," assuming "all the conditions are right." In
fact, she clarified, nuclear energy is a "long-term priority"
in Morocco's new energy plan (Ref A), especially given that
96 percent of its energy needs are currently imported. The
GOM has "decided that nuclear power is necessary for the long
term," she added, and as soon as certain "aspects are
clarified" it can "announce this more loudly." To lay the
groundwork for nuclear power, the Ministry's current focus is
on preparing a legal and regulatory framework, developing
human resources, and selecting the most suitable technology.

4. (SBU) The Ministry has submitted draft nuclear
legislation to the Secretary General of the Government for
parliamentary action, Benkhadra said. The legislation would
establish a regulatory framework, including a new regulatory
body, so as to conform to "international obligations and
standards." It was developed with the input and approval of
the International Atomic Energy Agency (IAEA), and the GOM
hopes to bring it into force in 2009. Ambassador Wolcott and
her delegation applauded Morocco's progress to date and
encouraged continued cooperation with the IAEA (in
particular, through the Agency's "Milestones" process, to
which the U.S. has been a major contributor). In addition to
indirect cooperation through the IAEA, Wolcott and her
delegation noted that the U.S. can offer complementary
bilateral programs, such as support for setting up regulatory
bodies, workshops on management and technical requirements
for a nuclear energy infrastructure, funding for training
programs, and university partnerships. In particular,
officials of the Department of Energy's National Nuclear
Security Administration (NNSA) reported that a proposal for
"Technical Assistance in Development of National Regulations
for Nuclear Power" had been approved by the U.S. and was now
awaiting approval by the Ministry of Energy and the Moroccan
National Center of Energy Sciences and Nuclear Techniques
(CNESTEN).


5. (SBU) Minister Benkhadra praised the existing Department
of Energy/NNSA collaboration with CNESTEN, and expressed her
hope that this could be "reinforced" in the coming years. In
particular, as soon as a political commitment to nuclear
power is made, Morocco will enter a "new era" where focus
will be placed on practical steps, in particular training and
the development of a nuclear regulator. She noted that the
Ministry of Energy, Mines, Water and the Environment (MEMEE)
is the focal point for nuclear power, with technical support
coming from CNESTEN and the National Electricity Office
(ONE). To this end, she reiterated her support for an
International Training Center (ITC) to be hosted by CNESTEN
with U.S. support, and inquired into recent advances. NNSA
officials reported that U.S. funds had now been allocated to
purchase equipment for this facility, and that it was hoped
the GOM would be able to provide funds to build the facility.
Minister Benkhadra commented that this multi-purpose
training center, which could be used for regional courses and
also offer opportunities for "train the trainer" programs,
would be a "good starting point" for the future. NNSA also
noted that it was co-hosting a seminar with CENSTEN in
March/April 2009, which would focus on human resources issues
related to the development of nuclear power.

6. (SBU) Additionally, Minister Benkhadra observed,
developing countries like Morocco have a great need for
renewable energy technologies, and hope that advanced
countries like the U.S. would assist them in fielding more
renewable energy applications (Ref B). Nuclear is one
long-term energy solution for Morocco, Benkhadra explained,
but renewables are also important, and "easier than nuclear
energy" to implement in the near term. "We'll need all these
kinds of energies in the future," she concluded.

----------------------------------
CNESTEN Working to Lay Foundations
----------------------------------

7. (SBU) CNESTEN Director General Khalid El Mediouri
explained that CNESTEN's stated missions, to promote nuclear
science and technology, to develop a technical base for a
nuclear power program, and to provide technical support to
higher level authorities, will each offer critical support
for a political decision to pursue nuclear power. El
Mediouri explained that Morocco's political establishment has
approached the nuclear energy option by identifying two major
decision points: a choice to invest in the infrastructure
required to prepare for nuclear power (made decades ago), and
a choice to proceed with power generation (yet to be
finalized). The commitments Morocco has already made
stemming from that first decision are "not trivial," Mediouri
argued, highlighting the USD 100 million investment in
CNESTEN's Maamora research center and research reactor.
(Note: The latter, a 2 MW TRIGA Mark II reactor from General
Atomics that was supported in part by export credits from the
Ex-Im Bank, was commissioned earlier this year and now awaits
a final license to authorize regular operation. This license
is expected within weeks. End Note). Despite the high cost,
the GOM's political commitment would similarly ensure the
funding to pay for the regulatory, training, and oversight
functions that would be required to support the deployment of
nuclear power.

8. (SBU) In potential anticipation of a positive decision,
CNESTEN has recently been moved from the Ministry of Higher
Education back to the Ministry of Energy (under which it was
originally established in 1986). The Ministry of Energy has
also recently established a multi-agency commission to
coordinate nuclear-power-related decision making (similar to
the Nuclear Energy Program Implementation Office, or NEPIO,
recommended by the IAEA "Milestones" document.)

9. (SBU) El Mediouri noted that Morocco's most significant
requirement to prepare for a nuclear power industry will be
the development of human resources. It will take time and
money to train enough people to fill the operational,
regulatory, and technical positions needed, and a real
challenge will be creating opportunities for personnel to
gain experience, for example at power plants overseas,
without Morocco losing their skills and its investment in
their training to permanent emigration. The future ITC is a
high priority for CNESTEN, El Mediouri asserted, as it will

provide a venue and impetus for greatly expanding Morocco's
domestic training programs in addition to international
outreach.

10. (SBU) NNSA already supports many areas of engagement
with CNESTEN, dating back over 20 years. In addition to the
ITC project, DOE is helping CNESTEN to host a workshop on
human resource development in March/April 2009 which will
include participants from North Africa and Jordan, the United
States, and the IAEA. A series of Action Sheets provide
pathways for NNSA assistance to CNESTEN in areas such as
regulatory body development, materials accountability,
radiation protection/health physics, reactor operations,
radioactive waste management, implementation of international
obligations, and other related fields. DOE and DOS (through
their financial support of the IAEA) also promote joint
research and Moroccan participation in scientific and
technical conferences in nuclear technology. CNESTEN greatly
values the continuing cooperation with the USG, El Mediouri
assured Ambassador Wolcott, and hopes to continue to benefit
from this cooperation.

--------------------------------------------- ------
ONE Proceeding with Plans for Commercial Generation
--------------------------------------------- ------

11. (SBU) Amid management turmoil at Morocco's National
Office of Electricity (ONE's Managing Director was dismissed
and a replacement named one day before Ambassador Wolcott's
visit) (septel), Ambassador Wolcott's delegation met with
ONE's Directors of Finances (Mohammadi Allach), Strategy and
Planning (Mohamed Fadili), and Electro-nuclear Projects
(Taheri). The ONE management team outlined ONE's history of
studying nuclear technology, including hiring international
consultants to conduct assessments and feasibility studies in
the early 1980's. At that time, with the assistance of the
French firm SOFRATOME and the IAEA, the managers explained,
ONE identified and qualified a site (Sidi Boulbra) halfway
between the coastal cities of Essaouira and Safi, that met
IAEA standards (such as ease of access, population density,
and availability of cooling water). This early feasibility
study also looked at demographic, geological, hydrological,
meteorological, seismic, radiation protection, and other
factors, the managers reported. Though technically feasible,
however, the study indicated that electricity generated from
a nuclear plant would not have been cost competitive at the
time. As a result, the project was shelved.

12. (SBU) In 2003 - 2005, ONE again conducted a feasibility
study (this time handled internally, but again in
consultation with the IAEA) that indicated the technical and
economic feasibility of introducing two nuclear power
generation units of 700 to 1000 megawatts electric (MWe) each
in 2017 - 2018, using the site identified in the earlier
study. At the time of introduction, a 1000 MWe plant would
constitute about 12 percent of Morocco's projected total
installed capacity (assuming average growth of 8 percent),
predicted Planning Director Fadili.

13. (SBU) Nuclear project manager Taheri told Ambassador
Wolcott's delegation that ONE began a "pre-selection" process
in 2006 by inviting non-binding offers from interested
reactor vendors and operators on a proposal to construct,
operate, and maintain two production units. ONE would
consider any of the major commercialized technologies now in
use, he noted, including pressurized light water reactors
(PWR), boiling water reactors (BWR), or heavy water reactors
(such as the Canadian CANDU). ONE declined to identify the
firms that responded, but stated that following that initial
sounding, ONE is now finalizing draft contracts that will
form the basis for a formal request for proposals. These
draft contracts, which have been prepared with assistance
from a technical consultant (Sargent & Lundy), a legal
consultant (Simon and Simon), and the IAEA. ONE anticipates
hiring an Engineering, Procurement, and Construction (EPC)
firm which would be tasked with assembling a consortium to
oversee all aspects of plant deployment (finance,
construction, operation, maintenance, fresh fuel provision,
and spent fuel management).

14. (SBU) ONE would likely be a minority partner in the
consortium, but would be a guaranteed and unique off-taker of
the produced electricity, which would then be sold to one of

its many distributors, Taheli outlined. In fact, the
management team reiterated, ONE intends all of its future
generation facilities of any technology to fit this model,
where Independent Power Producers (IPPs) would sign Power
Purchase Agreements (PPA) with ONE, and financing would be
provided by a private entity via a Special Purpose Vehicle
(SPV). Morocco will need to add 600 to 700 MWe of generating
capacity each year on average, and a nuclear plant will be
considered just as any other option. ONE's sole concern,
Director of Planning Fadili emphasized, is to purchase
electricity at the lowest cost possible.

15. (SBU) Ambassador Wolcott's delegation raised concerns
about potential lack of clear roles for licensing and
regulatory oversight. Fadili noted that as a partner in the
consortium, ONE would be responsible for full compliance with
the government's regulations. The GOM's role would include
regulatory oversight, as well as guarantees that ONE would
continue to purchase the power as contracted. The contract
package will include a "letter of support" from the GOM,
Allach explained, which would include not only the purchase
guarantee but assurances to the investor of support for the
project in the legal and regulatory fields as well.
Regulatory oversight will come from the proposed regulatory
body to be created under the draft nuclear legislation,
Taheri noted, drawing elements from the Ministries of Energy
and Health, and two extant government committees provide
guidance on national policy for nuclear energy. The first is
a National Council for Nuclear Energy created in the 1980's
under the Prime Minister, including the Ministers of Energy,
Health, Industry, Agriculture, and Environment, and the
second is an ad hoc "Review Committee" recently set up by
Minister of Energy Benkhadra and including ONE, CNESTEN,
national phosphate mining company Office Cherifien des
Phosphates (OCP), and the Ministries of Health and Energy.
The conclusion of this latter committee on the utility of
nuclear power is due in 3 to 4 months, ONE stated.

--------------------------------------------
Moving Ahead, but Varying Degrees of Clarity
--------------------------------------------

16. (SBU) Comment: Moroccan officials seemed much more
forward-leaning on nuclear power during this visit than in
previous interactions, from Minister Benkhadra's hinting that
the decision has already been made, to ONE's apparent
readiness to issue a tender for nuclear plant construction.
It was striking that while CNESTEN is most concerned with
developing a local infrastructure and human knowledge base to
support a nuclear industry, ONE appears to be willing to
leave all such concerns to private industry (with regulatory
oversight from the government). ONE seems determined to
treat nuclear power as just another option for electricity
supplies, emphasizing several times that as long as the
projected kilowatt-hour cost is less than competing options,
ONE has no hesitation pursuing a nuclear power plant. Given
the advanced state of ONE's preparations to act on an
expected forthcoming official decision to proceed with
nuclear power, the delegation recommends that USTDA consider
sponsoring an Orientation Visit to the U.S. of Moroccan
government and corporate officials to meet with U.S.
companies and potential suppliers or service providers in the
nuclear energy arena. End Comment.

17. (U) Ambassador Wolcott's delegation included:

-- Ambassador Jackie Wolcott, Special Envoy for Nuclear
Nonproliferation, Department of State
-- Alex Burkart, Deputy Director, ISN/NESS, Department of
State
-- Marc Humphrey, Special Assistant to the Special Envoy for
Nuclear Nonproliferation, Department of State
-- Michael Mayfield, Nuclear Regulatory Commission
-- Matthew Van Sickle, DOE/National Nuclear Security
Administration
-- Moussaddak Bissani, Lawrence Livermore National Laboratory

18. (U) Ambassador Wolcott's party has cleared this cable.


*****************************************
Visit Embassy Rabat's Classified Website;
http://www.state.sgov.gov/p/nea/rabat

*****************************************

Riley

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