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UNCLAS SECTION 01 OF 03 BUCHAREST 000997 
 
DEPT FOR EUR/ERA AND EEB 
ALSO FOR EUR/CE ASCHIEBE AND T MHUMPHREY 
COMMERCE FOR SLOPP 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG ECON TRGY BEXP BTIO SENV EPET KSEI RO
SUBJECT: ROMANIA: NUCLEAR POWER SECTOR ON THE RISE 
 
REF: A) State 127468, B) Bucharest 595 
 
SUMMARY 
 
¶1.  Nuclear power accounts for an increasing share of Romania's 
electricity production.  The country's two operating reactors at the 
Cernavoda Nuclear Power Plant currently provide 18 percent of 
Romania's domestic electricity production, with this number 
scheduled to double after two additional reactors planned for the 
same site are completed.  When combined with Romania's large 
hydroelectric power base, more than half of Romania's current 
electrical power generation is carbon-free.  The Government of 
Romania (GOR) plans to expand the use of nuclear power in order to 
meet increasingly aggressive EU carbon emissions targets.  Romania 
is largely able to operate and fuel its nuclear reactors without 
outside assistance, but will use foreign companies to provide a 
secondary source of nuclear fuel and to design and supervise the 
construction of new reactors.  This report responds to Department's 
ref A request for information about the nuclear power sector.  END 
SUMMARY. 
 
NUCLEAR GENERATION TODAY 
 
¶2.  Romania has been operating nuclear reactors for power generation 
since December 1996, when the first reactor at the Cernavoda nuclear 
power plant came on line.  The Cernavoda site, located on the Danube 
River 150 km east of Bucharest, was initially conceived by the 
former communist regime as the location for up to five nuclear 
reactors, of which four will ultimately be built.  A Canadian 
design, the Canada Deuterium Uranium (CANDU-6) pressurized heavy 
water reactor (PHWR) using natural uranium, was selected for use in 
the power complex.  Reactor 1 was built in cooperation with Atomic 
Energy of Canada Ltd. (AECL) and Ansaldo (a company of the Italian 
Finmeccanica Group).  General Electric (GE) provided the turbine, 
the generator, and the fuel loading machines. 
 
¶3.  Romania's second nuclear reactor at Cernavoda began operations 
on May 6, 2007, and was fully connected to the power grid on October 
1, 2007.  The second unit is also a PHWR CANDU reactor, built by the 
same joint venture between AECL and Ansaldo, with GE providing 
additional components.  Today both reactors are operating at full 
capacity with reliability records placing them in the top tier of 
CANDU operators.  On a recent visit to Cernavoda, EconOff met both 
the professional managers and the competent technical staff working 
for the state-owned nuclear power company, Nuclearelectrica.  While 
only a few expatriates are currently employed by Nuclearelectrica, 
additional foreign consultants and project managers will be needed 
to assist in the construction of reactors 3 and 4.  Many of the 
employees have benefited from foreign training, mostly in the U.S. 
or Canada.  The company is able to provide sufficient salary and 
benefits to attract and retain a high quality workforce 
domestically. 
 
¶4.  With two reactors now on line, the operating efficiency of the 
complex has improved, helping to ensure baseload stability on the 
Romanian electrical grid.  Following commissioning of the second 
reactor, Nuclearelectrica became the second-biggest electric power 
provider in Romania (hydroelectric producer Hidroelectrica is 
bigger), with nuclear power covering 18 percent of Romania's 
domestic electricity consumption.  Nuclearelectrica has been a 
profitable contributor to the state budget, earning the equivalent 
of 37 million USD in the first half of 2008. 
 
WHY NUCLEAR POWER? 
 
¶5.  The GOR decided in 2007 to construct two additional reactors in 
Cernavoda, in part to help Romania meet aggressive EU climate change 
targets.  This project, designed as a public-private partnership, 
has been subject to lengthy delays, with the GOR making a 
last-minute decision (only after accepting bids for the project) to 
increase the government's stake in the consortium to 51 percent.  A 
lengthy negotiating process finally resulted in an agreement on 
November 20, 2008 between the Government and the six private 
companies involved.  The new agreement puts Nuclearelectrica firmly 
in charge, with a 51 percent stake, while Czech CEZ, French GDF 
SUEZ, Italian Enel and German RWE each hold 9.15 percent.  The 
remaining shares, of 6.2 percent each, belong to Spanish Iberdola 
and the Romanian division of Arcelor-Mittal.  The 4 billion euro 
project is scheduled to be completed in 2015, with Nuclearelectrica 
contributing the government's share through loans, retained earnings 
and in-kind contributions.  Each of the two new units will be able 
to produce 720 MW of electricity.  The 1500 RPM turbine, to be 
delivered by GE, will be among the biggest steam turbines ever 
built. 
 
¶6.  Romanian policymakers clearly see nuclear energy as a source of 
 
BUCHAREST 00000997  002 OF 003 
 
 
energy security for Romania.  Even as plans are just being finalized 
for reactors three and four, the GOR has already floated the idea of 
building additional reactors elsewhere in Romania, probably in 
Transylvania (a feasibility study is planned for summer 2009).  This 
proposed facility would be completed after 2020, host between two 
and four reactors, and have a total output of up to 2,400 MW. 
 
¶7.  Nuclear energy is attractive, in part, thanks to Romania's 
ability to generate nuclear fuel domestically.  Using a research 
reactor operating near Pitesti and locally mined uranium ore, the 
GOR is able to produce up to 10,000 fuel bundles each year, enough 
to supply both existing Cernavoda reactors (reftel B).  After use, 
the radioactive assemblies are stored in a 49,250 rod capacity 
cooling pond at the Cernavoda site.  Once cooled, low- and 
medium-level radioactive waste is usually moved to a permanent, 
21,000-drum capacity storage facility located inside of a retired 
uranium mine in Baita Bihor.  High-level waste is being kept on site 
in a temporary storage facility until the permanent high-level waste 
repository being built in Saligny, near Cernavoda, is completed in 
¶2014. 
 
¶8.  With Romania holding enough natural uranium deposits to last for 
30 to 50 years at current usage levels, as well as possessing a 
domestically-designed heavy water plant and a large-capacity, 
temporary radioactive waste storage facility, nuclear power 
production here is largely a domestic affair.  While additional 
reactors will most likely outpace the GOR's ability to mine and 
manufacture sufficient quantities of nuclear fuel, the GOR would 
prefer importing nuclear fuel from western suppliers to generating 
electricity through increased natural gas imports from Russia.  Post 
fully expects that any new reactors built in Romania will be of a 
western design. 
 
¶9.  A secondary interest in nuclear power stems from efforts to meet 
EU climate change targets.  With four reactors, nuclear power 
production will provide nearly a third of Romania's growing 
electricity demand.  Coupled with the existing hydroelectric 
capacity, which accounts for almost a third of power production, 
Romania is well on the path to meeting increasingly aggressive 
carbon reduction targets.  This large and expanding carbon-free 
production base opens the door to future electricity exports to the 
rest of the EU. 
 
GOVERNMENT ACTORS 
 
¶10.  While Cernavoda is managed by Nuclearelectrica, other entities 
play leading roles in Romania's nuclear sector.  Inspections and 
enforcement are the responsibility of the National Commission for 
Nuclear Activities Control (CNCAN), an independent nuclear regulator 
directly subordinated to the Prime Minister.  CNCAN also enforces 
the nuclear liability law, which makes the operator exclusively 
responsible for a nuclear accident, and verifies that nuclear 
operators are sufficiently indemnified against potential losses. 
The Nuclear Agency, under the Ministry of Economy and Finance, sets 
the overall policy direction for the GOR with regard to nuclear 
power.  Other smaller players assist with nuclear research and 
manage radioactive waste disposal. 
 
TRADE OUTLOOK 
 
¶11. The expansion of the nuclear industry in Romania is likely to 
generate new business opportunities for U.S. companies in the areas 
of: engineering design, construction and project management, supply 
of specialized equipment (turbines, valves, gauges, control 
equipment, safety and detection systems), waste management, 
security, and safety.  Among the American companies with appropriate 
expertise and technology that have expressed interest in the 
Romanian market are American Ecology Corporation, Babcock and 
Wilcox, Bechtel Nuclear, CH2M Hill, Crane Nuclear, GE, Shaw Group, 
and URS Corporation. 
 
COMMENT 
 
¶12.  Romania has a developed nuclear power base which it will 
continue to expand.  Energy security concerns, climate change 
targets, and rising demand all argue for an increased focus on 
building new nuclear power plants.  The GOR is able to manage 
operations and run reactors using domestic labor and expertise. 
However, there is no indigenous company with the capability to 
design and supervise the construction of world-class reactors, 
meaning that the GOR will continue to form partnerships with foreign 
firms, such as that for reactors 3 and 4, if it hopes to build 
additional plants.  While there is a long history of cooperation 
with Canadian nuclear experts, the GOR would be open to any western 
technology, preferring to avoid deeper nuclear energy ties to 
Russia.  As Russia is the sole supplier of imported natural gas and 
 
BUCHAREST 00000997  003 OF 003 
 
 
a major oil supplier, further dependence on Russia in the nuclear 
sector would do nothing to advance Romania's energy security goals. 
End Comment. 
 
GUTHRIE-CORN