Cablegate: Recommendation to Pursue Nuclear Energy Technology

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1. (SBU) Summary: In his October 21 letter to Czech PM
Fischer, Energy Secretary Chu wrote that he "would welcome
discussion on a bilateral technology agreement that would
promote cooperation in nuclear energy research and
development in areas such as next generation design." The
Government of the Czech Republic (GoCR) views the further
development of nuclear energy as key to strengthening its
energy independence and economic development, has a
long-history of nuclear research, and treats both energy
security and creating new research and development
opportunities as key priorities. Post strongly recommends
that the USG begin this dialog on a bilateral technology
agreement as soon as possible. It would help the U.S.
broaden its relationship with the Czech Republic post radar
and demonstrate that the U.S.-Czech relationship is about
more than defense. It would also help Westinghouse in its bid
to win the semi-state electricity company CEZ's USD 27.5
billion tender for up to five new nuclear reactors. A
Westinghouse win would also create an estimated 9,000
high-paying U.S. jobs and position Westinghouse to capitalize
on future opportunities in the region. End summary.

Czechs Have a Long History of Nuclear Research
2. (SBU) The Czech Republic has a long history in nuclear
research and is the home to two nuclear research reactors.
It also hosts six commercial nuclear power plants at two
sites, with plans to build more. Currently, nuclear power
accounts for roughly 30 percent of Czech electricity
production. The Czechs were the center of research on
thorium-based molten salt reactors for the Soviet bloc,
research that continues today. To further this research,
including the planned construction of a working molten salt
reactor, the Czech Government recently established the
Advanced Thorium Research Agency and is actively seeking
international partners. Australia, where around 60 percent
of the world's known thorium reserves are located, is
reportedly interested. As part of this project, the REZ
nuclear research reactor, majority owned by the semi-state
electricity company CEZ, has developed a draft memorandum
with UT-Battelle, the management contractor for DOE's Oak
Ridge National Laboratory, on the transfer of excess Lithium
7 from the U.S. to the Czech Republic.

3. (SBU) Westinghouse has also had preliminary talks with REZ
about joining Westinghouse's project to develop IRIS, an
advanced "Generation III-Plus" small modular pressurized
water reactor. Westinghouse is also exploring with REZ the
possibility of collaborating on several "Generation IV"
reactor projects including a high-temperature gas reactor and
fast reactor Generation IV technology. Over the past two
decades, DOE's National Nuclear Safety Administration has
also worked closely with REZ and the research reactor at the
Czech Technical University to improve their security, make
the transition from the use of highly-enriched to
low-enriched uranium, and to transfer used fuel to Russia for

Public Support for Nuclear Energy
4. (SBU) The Czech public is firmly behind the expansion of
nuclear power. Nuclear energy is supported by all political
parties except for the small Green Party. Even the
Environment Ministry, whose political leadership is still
from the Green Party, has recently come to embrace nuclear
power as a low-emissions energy source. The Ministry of
Environment is now proposing a larger future share of nuclear
production than even the Ministry of Industry and Trade. A
2008 European Commission EuroBarometer poll showed that
Czechs are more in favor of nuclear energy than any of the
other 26 EU countries, with 64 percent of Czechs indicating
that they are either totally or fairly in support of nuclear
power plants. Some local opinion polls have shown that
Czechs are even more supportive of nuclear power than of wind
energy. Most analysts believe that the 2009 January gas
crisis has further strengthened support within Czech society
for expanding domestic nuclear production as a way to enhance
Czech energy security by lessening dependence on Russian gas
and oil.

R and D Agreement Would Help Westinghouse
5. (SBU) Earlier this year, CEZ, which is 70 percent owned by
the Czech state, released a tender for two additional nuclear

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power plants at the Temelin Nuclear Power Station, with
options for three additional units elsewhere in the Czech
Republic or Europe. Should CEZ choose to build all five
power plants, the contract would be worth roughly USD 27.5
billion. A Westinghouse win would create an estimated 9,000
new highly-paid jobs in the U.S. and position it to
capitalize on future growth opportunities in the region. The
Department of Commerce has determined that USG advocacy on
behalf of Westinghouse is in the national interest. VP Biden
raised Westinghouse's bid during his October 23 visit and
Energy Secretary Chu has sent a letter of support.
Westinghouse, however, faces significant competition from the
Russian AtomStroyExport and the French Areva.

6. (SBU) Conclusion of a U.S.-Czech research and development
agreement would significantly help Westinghouse's chance to
win this major tender. In his meeting with VP Biden, Czech
PM Fischer noted that selection criteria for the government
included technology transfer and cooperation on research and
development. As already noted, Westinghouse is inviting REZ,
which is majority owned by CEZ (the semi-state electricity
company that is issuing the tender) to participate in the
research and development of generation III-plus and
generation IV reactors. A U.S.-Czech nuclear research and
development agreement can serve as an umbrella agreement to
this and other U.S.-Czech cooperation that will make the
Czech government more amenable to choosing U.S. technology
for its future commercial reactors.

Further Diversifying the U.S.-Czech Relationship
7. (SBU) The Bush Administration's plan to construct a
missile defense radar site in the Czech Republic became
highly politicized and helped create the misperception that
the U.S.-Czech relationship is mainly about defense. The
Obama administration's decision not to include the radar in
its revised missile defense strategy has led part of the
Czech elite to fear that the USG is abandoning central Europe
as part of its "reset" with Russia. Fostering increased
opportunities for research and development in the Czech
Republic is a key priority of all Czech political parties and
is seen as essential in helping the Czech Republic transform
itself from an assembly line economy, with an overreliance on
manufacturing, to a modern knowledge-based economy. A
U.S.-Czech nuclear research and development agreement would
help underscore the U.S. commitment to the Czech Republic and
the region post radar. It would also help demonstrate the
diversity and depth of the U.S.-Czech relationship and that
the relationship is about more than defense.

8. (SBU) Embassy Prague strongly recommends that the USG, led
by the Department of Energy, begin discussions with the Czech
Republic on concluding a nuclear energy technology
cooperation agreement as soon as possible. The recently
signed U.S.-Italy Agreement for Cooperation in Civilian
Nuclear Energy Research and Development can potentially serve
as a model. A U.S.-Czech nuclear energy research and
development cooperation agreement will help increase
Westinghouse's chances of winning the Czech Republic's USD
27.5 billion tender for new commercial reactors. It would
also help expand the U.S.-Czech bilateral relationship post
radar, into an area that is a priority for both of our
countries. An agreement would also help demonstrate the
U.S.'s continuing commitment to engagement in this important
region and that the U.S.-Czech relationship is about more
than defense.

© Scoop Media

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