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RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
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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