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Cablegate: Spain to Maintain Civil Nuclear Energy, No Further

VZCZCXYZ0001
RR RUEHWEB

DE RUEHMD #1362/01 3641238
ZNR UUUUU ZZH
R 291238Z DEC 08
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 5826
INFO RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEHUNV/USMISSION UNVIE VIENNA 0100
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS MADRID 001362

SENSITIVE
SIPDIS

STATE/T FOR MARC HUMPHREY, COMMERCE FOR SARAH LOPP

E.O. 12958: N/A
TAGS: ENRG TRGY BEXP BTIO SP
SUBJECT: SPAIN TO MAINTAIN CIVIL NUCLEAR ENERGY, NO FURTHER
EXPANSION PLANNED

REF: SECSTATE 127468

1. (SBU) Summary. Civil nuclear power in Spain is being
phased out. Nuclear power provides approximately 20 percent
of Spain's electricity, and has remained relatively constant
in recent years. Spain operates 8 nuclear reactors at 6
plants, as well as other nuclear facilities including a waste
repository, and the industry employs an estimated 30,000
people. GOS policy toward the use of nuclear power shifted
after the current ruling Socialist party (PSOE) was elected
in 2004. Current President Zapatero has staunchly maintained
an anti-nuclear stance, calling for the closure of Spain's
nuclear plants as early as his election campaign in 2003.
Yet the realities of steady increases in demand for
electricity in what had been one of Europe's fastest growing
economies have forced the GOS to maintain its existing
nuclear power capacity. The result has been a GOS policy of
prohibiting expansion of nuclear energy, and decommissioning
existing plants as they reach the end of their useful lives.
The GOS is following its plan, with the most recent
decommissioning in 2006 of its Jose Cabrera plant.
Politically, support for nuclear energy has traditionally
fallen along party lines -- the Socialist PSOE opposes it,
the conservative Partido Popular (PP) supports it. However,
Zapatero and PSOE have recently signaled that their
opposition to nuclear energy may be easing due to several
factors, including the need to meet growing demand, reduce
emissions and fund renewable energy subsidies. Additionally,
accidents at three different nuclear reactors this year have
fueled the national debate about nuclear power. Public
support for nuclear energy is split, with slightly more
people opposing its expansion than supporting it. End
Summary.

----------------------------
Civil Nuclear Power Industry
----------------------------

2. (U) Today, there are no nuclear power plants under
construction. Spanish architectural and engineering
companies in the sector now concentrate on operational
support, shutdown and decommissioning of nuclear power
plants, limited research and development, and radioactive
waste engineering. The lack of business opportunities in the
Spanish civil nuclear market has also forced them to expand
into other markets. Three of the largest Spanish nuclear
companies, ENUSA Industrias Avanzadas, ENSA Equipos Nucleares
and Tecnatom, have recently begun competing for new nuclear
projects in China, primarily against the French company Areva
and U.S. firm Westinghouse. In March 2008, an alliance of
Spanish nuclear companies signed contracts with Chinese firms
worth 20 million euros (28 million dollars). These companies
- Equipos Nucleares SA (ENSA), Tecnatom and ENUSA - will
provide equipment, steam generators, fuel control mechanisms,
supervision of construction, and control and inspection
technology.

--------------------------------------------- ---
GOS Mindset: 20 Percent Nuclear a Necessary Evil
--------------------------------------------- ---

3. (U) Politically, support for nuclear power has fallen
along party lines in Spain in recent years. The previous
conservative government, which last ruled in early 2004,
supported nuclear energy. The PSOE, however, has opposed the
expansion of nuclear energy and has long called for the
shutdown of existing facilities. During his election campaign
in 2003-2004, current President Zapatero announced his
intention to close Spain's eight operating nuclear reactors
as renewable energy sources became viable. In March 2005,
Zapatero described himself as "the most anti-nuclear
component in the Spanish Government." Public support for
nuclear energy is split, with 48 percent of the Spanish
public opposing its expansion and 40 percent supporting it,
according to an opinion poll earlier this year. A series of
accidents at three nuclear plants over the past 12 months has
helped fuel the debate over nuclear power.

4. (U) While Spain has aggressively developed renewable
energy and is now the world's third largest producer of wind
energy, the rapid economic growth of the last several years
has led to a steady increase in Spanish electricity
consumption. Despite generating 10 percent of its
electricity from wind power, and an additional 10 percent
from other renewable sources like hyrdro and solar, the
challenge of meeting growing demand for electricity in what
had been one of Europe's fastest growing economies has

effectively prevented the PSOE government from replacing
nuclear energy with alternative sources. As a result, the
GOS' policy on civil nuclear energy has shifted from
Zapatero's original call to shutter productive nuclear power
plants to one of closing them as they reach the end of their
useful lives.

---------------------------------
However, Opposition May be Easing
---------------------------------

5. (SBU) In 2007, the Ministry of Industry, Tourism and Trade
commissioned a study to forecast Spanish energy demand to the
year 2030. The study was created with the assistance of an
advisory board consisting of experts from the government and
industry, and analyzed various scenarios using different
energy production mix ratios. Notably, most of the various
scenarios conducted included the assumption of at least
maintaining the country's currently installed nuclear power
until 2030. Upon its completion, however, the study was not
published due, in part, to the nearing elections in March
2008. The study, and its delayed publication, contributed to
calls for a national debate on nuclear energy.

6. (SBU) Since his reelection, Zapatero has subtly signaled
that his opposition to nuclear energy may be easing. During
a speech in April 2008, the President said that to solve the
problem of energy supply, the GOS will need to consider the
"development of new technologies, the evolution of the fossil
fuels market, cross border cooperation and the availability
of water resources. Along with decisions made by the
European Union, this will determine the Spanish position on
nuclear energy." Presumably, any new EU legislation, such as
the recent Energy and Climate Package, will require sustained
reductions in emissions, which could conceivably make nuclear
energy a more attractive alternative.

7. (U) In May 2008, the President and his cabinet released a
2008-2012 national plan for electricity and gas. The plan
called for the continued generation of nuclear electricity at
current volume levels. The result will be a gradual
reduction of nuclear power in the percent of total primary
energy use as overall electricity demand and development of
other sources increase. The GOS reported in the plan that
nuclear energy as a percentage of electricity generation
would fall from 24 percent in 2006 to 17 percent in 2016.

8. (U) According to recent media reports, the Ministry of
Industry, Trade and Tourism is considering extending the life
of nuclear plants from 40 to 60 years. One motivation for
doing so would be to help pay the accumulated debt the GOS
owes to electricity generating companies for charging
consumers less than the cost of producing electricity.
Although rates have increased more than inflation in 2008,
consumers still pay around 20 percent less than cost for
electricity. According to some estimates, this debt has now
reached 16.5 billion euros (23 billion dollars).

9. (U) Although the GOS has been a strong supporter of the
Kyoto Protocol and has introduced a number of alternative
energy and efficiency measures intended to reduce emissions,
Spain remains among the top two developed countries furthest
away from its Kyoto obligations. Under Kyoto, Spain is
required to cap its emissions at 15 percent above 1990 levels
by 2012. Yet Spain's emissions are estimated to be 50
percent above 1990 levels, and the country will certainly not
be able to meet this target. While Zapatero and the ruling
Socialist government (PSOE) have publicly defended their
anti-nuclear energy stance, the GOS certainly recognizes that
the use of nuclear energy contributes to emissions
reductions, relative to gas and coal.

10. (SBU) Spain is constructing additional transmission lines
along its border with France that will effectively double the
capacity to import and export electricity between the two
countries. Spain is a net importer of small amounts of
electricity from France, much of which is likely generated at
nuclear plants. To paraphrase a recent statement made by an
official at the company that operates Spain's national
electricity transmission network, Spain has a 'don't ask,
don't tell' policy toward electricity imported from France.
Officially, Spain has no knowledge of the source of
electricity imported from France yet certainly understands
that at least some of the electricity is generated by nuclear
power.

11. (U) As expected, industry and union organizations favor

the use and expansion of nuclear energy, and are increasing
pressure on the GOS to do so. CEOE, the largest business
association in Spain, has called for the government to
develop a new energy strategy to include nuclear power
generation. The energy sector has recommended the expansion
of nuclear energy as a way to decrease both Spain's
dependency on foreign oil and CO2 emissions. And several of
Spain's large unions have called for increased investment in
nuclear energy.

-----------------------
Ongoing Decommissioning
-----------------------

12. (U) The GOS is currently following its plan to
decommission and dismantle nuclear power plants that have
reached the end of their useful lives. In 2006, Spain
decommissioned the latest nuclear power plant - Jose Cabrera
- and is planning for its dismantling and decontamination.
Actual decommissioning work will not begin before 2009 and is
expected to be completed by 2015. Spain is also in the
process of dismantling its Vandellos 1 plant, which shut down
in 1990. Phase 2 of the Vandellos plant was completed in
2003, with more than 80 percent of the site released. The
final phase 3 will take place after an estimated waiting
period of 25-30 years.

13. (U) The GOS is also remediating several uranium treatment
facilities, restoring 19 uranium mines that are no longer
used, and decommissioning two 'argonaut-type' experimental
reactors. The GOS is also decommissioning several nuclear
research facilities that are currently operated by Ciemat,
the government's scientific research and development
organization.

14. (U) Decommissioning projects in Spain must include an
Environmental Impact Assessment (EIA) and must obtain
approval from the Spanish Nuclear Safety Council (CSN),
Spain's nuclear regulator, as well as the Ministry of
Environment, Rural Development and Marine Affairs. CSN was
established in 1980 and is solely responsible for nuclear
safety and radiation protection, and for regulating and
supervising nuclear installations. The organization operates
independently from the Administration and reports directly to
the Spanish Parliament. Nuclear power operating licenses,
which are issued by the Ministry of Industry, Tourism and
Trade, are subject to approval by CSN.
AGUIRRE

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