VZCZCXRO4622
PP RUEHFL RUEHNP
DE RUEHRO #1577/01 3591324
ZNR UUUUU ZZH
P 241324Z DEC 08
FM AMEMBASSY ROME
TO RUEHC/SECSTATE WASHDC PRIORITY 1381
INFO RHEBAAA/DEPT OF ENERGY WASHDC
RUEHLO/AMEMBASSY LONDON 1543
RUEHFR/AMEMBASSY PARIS 2493
RUEHBS/USEU BRUSSELS 4724
RUEHNP/AMCONSUL NAPLES 3529
RUEHMIL/AMCONSUL MILAN 9738
RUEHFL/AMCONSUL FLORENCE 3363

UNCLAS SECTION 01 OF 02 ROME 001577 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG TRGY BEXP BTIO IT
SUBJECT: INFORMATION ON ITALY'S PLANS TO RETURN TO NUCLEAR ENERGY 
 
REF: A) SECSTATE 127468 B) UNVIE 576  C) ROME 1053 
 
¶1. (U)   In response to Ref A questions, post provides the following 
information. 
 
¶2. Plans to expand Italy's nuclear power program: 
 
(U) The GOI's Economic Development Minister Claudio Scajola (i.e. 
Italy's de-facto energy minister) announced in May 2008 that Italy 
planned to return to nuclear energy power and that the government 
would work towards starting construction of new nuclear power plants 
by April 2013.  Press reports from the recent London Energy Summit 
of November 19 quote Minister Scajola stating that even with the low 
price of oil, nuclear energy is competitive and that Italy will work 
towards obtaining nuclear energy. 
 
(U) A return to domestic nuclear power generation was part of Prime 
Minister Berlusconi's April 2009 election platform. Solid 
majorities in both chambers of the Italian Parliament should help 
the GOI pass and implement the necessary legislative and regulatory 
infrastructure for a return to nuclear energy. Although the Italian 
public in 1987 approved three referenda that had the practical 
effect of ending Italy's nuclear power generation, there is now 
growing public support for a return to nuclear power.  However, 
there remains substantial opposition from environmental groups and 
the far-left parties, currently not represented in Parliament, as 
well as very strong "not in my backyard" (NIMBY) sentiment. 
 
¶3. Italy's underlying motivations for returning to nuclear power: 
 
(SBU) The GOI has stated that one of the principal motivations for 
bringing nuclear power back is to diversify its domestic energy 
supplies and improve Italy's energy security.  Italy depends on 
imported natural gas and oil for approximately 90 percent of its 
domestic energy demand.  According to the EIA, installed domestic 
electricity generation has not kept up with increasing demand. This 
has resulted in increasing imports of electricity as a percentage of 
total consumption, including electricity imports from France's 
nuclear power plants. Minister Scajola has stated that his goal is 
for Italy to reach by 2020 a mix of energy sources of 25 percent 
nuclear, 25 percent renewables and 50 percent fossil fuels. The GOI 
also has said that nuclear power can provide more affordable energy 
than other new alternatives. 
 
¶4. The Government's role in the financing of the civil nuclear 
energy sector: 
 
(SBU) It is not yet clear how Italy's nuclear power plants will be 
financed.  Local expert opinion holds that Italy's electricity 
parastatal ENEL will have the lead on nuclear power plant 
construction and that ENEL will likely finance the program, either 
through company bond issuances and/or long-term electricity supply 
agreements with local industries (the Finland model is often 
mentioned in the press or public discussions). The GOI is not 
expected to provide direct financing.  However, all interested 
parties believe that the GOI will have to provide some form of long 
term guarantees to insure investors against potential future 
political "rethinking" regarding nuclear power generation. 
 
¶5. Nuclear regulatory authority: 
 
(SBU) Italy does not currently have a nuclear energy regulator, 
since at present it has no nuclear energy industry.  There is a bill 
in parliament that provides for the creation of an independent 
regulator, likely reporting to the Prime Minister's office, which 
will group together about 50 experts each from  two existing 
agencies, ISPRA (Higher Institute for Environmental Protection and 
Research) and ENEA (Agency for New Technologies, Energy and the 
Environment).  ISPRA currently has oversight responsibility for 
safety and security of nuclear material in Italy (e.g., in research 
reactors, mothballed nuclear power plants, and in the medical 
sector).  ENEA conducts nuclear research, and also coordinates 
programs such as subsidies for renewable energy and energy 
efficiency.   Responsibility for nuclear power promotion lies with 
the Economic Development Ministry.  There has been some discussion 
of the new regulator also hiring 100 additional staff who are not 
current GOI employees, but funding has not yet been approved for 
those positions. 
 
¶6. Domestic nuclear liability law: 
 
(SBU) Italy has ratified the Paris Convention, but has not yet 
ratified the "Paris-Brussels Updating Protocol" increasing the 
minimum level of liability coverage.  (The latter protocol is 
currently moving through the internal GOI review process.)  Italy 
 
ROME 00001577  002 OF 002 
 
 
also has signed, but not ratified, the Convention on Supplementary 
Compensation for Nuclear Damage (CSC).  GOI officials are reviewing 
the possibility of CSC ratification, but it is not as far along in 
the process as the Paris-Brussels Updating Protocol; see ref C for 
more details). 
 
¶7. Italian manufacturing base involvement in nuclear-related 
products/services: 
 
(SBU) Italy's large electricity parastatal company ENEL has over 
recent years begun to reconstitute its nuclear expertise, 
particularly in cooperation with countries with nuclear energy 
power. For example, it has an MOU with France's EDF to acquire a 
12.5 percent share of the new nuclear project for a European 
Pressurized Reactor and has become a minority partner with EDF in 
various research projects and in the operation of France's reactors 
in Flammanville.  ENEL also acquired and has run since 2005 a 
nuclear power plant in Slovakia.  The other Italian player is 
Ansaldo Nucleare, a relatively small subsidiary of Italian defense 
and high tech parastatal Finmeccanica.  Ansaldo is the only Italian 
company which has, over the years, remained active in the field of 
nuclear engineering. Both ENEL and Ansaldo would like to be able to 
provide products and services to a future Italian nuclear energy 
sector. 
 
¶8. Extent of nuclear-trained workforce in Italy: 
 
(SBU) Italy has a relatively small nuclear-trained workforce. 
Ansaldo Nucleare employs approximately 200 technicians, while ENEL 
has only recently begun to reconstitute its nuclear department and 
to hire nuclear engineers.  Only a few Italian universities 
currently offer nuclear specialization programs.   However, Italian 
industry contacts have expressed a desire to see as much local 
content as possible in the construction of Italian nuclear plants. 
They have similarly stated that Italy has the local capabilities for 
the physical construction of the plants and would not need to import 
significant foreign workforce for construction. 
 
¶9. Current or anticipated nuclear related tenders: 
 
(U) Given that Economic Development Minister Scajola has indicated 
2013 as the target year for beginning construction of the first 
nuclear power plant, early tenders for engineering studies, site 
planning, etc. may be expected in the near term. Much will depend on 
GOI's progress in passing and instituting the legal and regulatory 
framework to allow a return to nuclear power to Italy. 
 
¶10. Nuclear sector opportunities for U.S. Industry 
 
Given that Italy has not operated a civil nuclear energy program for 
almost twenty years, the country has only a minimal nuclear 
infrastructure.  It is therefore reasonable to posit that 
opportunities for U.S. industry will exist across a broad spectrum 
of supporting industries.  We cannot be more exact absent a decision 
on the nuclear technology design and provider.  Note that U.S. 
companies are currently bidding to provide waste management services 
for existing nuclear waste. 
 
¶11. Primary companies (domestic and foreign) for consideration in 
involvement in the civil nuclear energy sector: 
 
(SBU) Italy is in the early stages of planning a return to nuclear 
power. There are no active bids or information on on-going 
construction/production projects. Nevertheless, we understand that 
among U.S. firms, Westinghouse and General Electric may be 
interested. A prime European competitor appears to be French Ariva. 
Even the Russians have made a pitch for involvement, but most local 
observers discount their chances owing to the "Chernobyl factor." As 
mentioned, Ansaldo Nucleare, a subsidiary of Finmeccanica is a 
leading Italian firm in the field. 
 
¶12. Other nuclear supplier countries engaging Italy in its civil 
nuclear power program: 
 
(SBU) See above. Due to the compressed time frame that the GOI 
envisions for its nuclear power restart, it is likely that it will 
rely on established nuclear technology and services suppliers, at 
least for the construction of the first few nuclear power plants. 
Consequently, we understand that major nuclear energy technology and 
service supplier countries are currently engaging with the GOI and 
relevant Italian energy companies with a goal of securing business 
opportunities.  We also understand that some countries are lobbying 
the GOI at the highest levels. 
 
DIBBLE