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UNCLAS SECTION 01 OF 04 THE HAGUE 000044 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG TRGY BEXP BTIO NL
SUBJECT: NETHERLANDS: NUCLEAR ENERGY EXPANSION NOT IMMINENT 
 
REF: STATE 127468 
 
 SENSITIVE BUT UNCLASSIFIED; PLEASE PROTECT ACCORDINGLY. 
 
¶1. (SBU) SUMMARY: The Netherlands will not lead a European 
"nuclear renaissance."  If Europe's commitment to nuclear 
power takes off, the Dutch will eventually follow.  There is 
a growing consensus that the Netherlands cannot achieve its 
ambitious greenhouse gas (GHG) emission reduction targets 
without expanding its nuclear power production.  However, key 
political leaders remain categorically opposed to nuclear 
power.  If the Netherlands does expand its nuclear sector, 
construction will not commence before 2012 even under 
industry's most optimistic scenario.  Although the 
Netherlands lags behind much of Europe in its civil nuclear 
power program, it remains an important location for nuclear 
energy research.  END SUMMARY. 
 
--------------------------------------------- 
Overview of Dutch Civil Nuclear Power Program 
--------------------------------------------- 
 
¶2. (U) The Netherlands currently has one operating nuclear 
power plant -- the 485 megawatt (MW) Borssele facility. 
Borssele supplies approximately 3 percent of Dutch annual 
electricity consumption.  In addition, the Netherlands 
imports a further 5 percent of its annual electricity 
consumption from Belgian and French nuclear producers. 
Borssele entered service in 1973 with its Siemens/Kraftwerk 
Union (KWU) reactor.  Borssele's owner/operator is 
Electricity Generating Company for the Southern Netherlands 
(Dutch acronym EPZ), a 50/50 joint venture of Dutch utilities 
Essent and Delta.  (Note: Essent agreed January 12 to sell 
its energy generation and supply operations -- including its 
Borssele stake -- to German utility RWE for 9.3 billion Euros 
(USD 12.4 billion); the deal is expected to close in the 
third quarter of 2009.  End note.)  Borssele's original 
decommission date was 2004, but Essent and Delta reached an 
agreement with the Dutch Government in 2006 to allow the 
plant to continue operating until 2033. 
 
¶3. (U) Upon taking office in February 2007, the current Dutch 
government coalition, led by Prime Minister Jan Peter 
Balkenende of the Christian Democratic Appeal (CDA) party, 
agreed that no new nuclear power plant would be built during 
its term -- that is, until 2011 at the latest.  This 
compromise was struck between the CDA, which generally favors 
the expansion of nuclear power, and its coalition partners 
Labor Party (PvdA) and Christian Union (CU), which oppose it. 
 
--------------------------------------------- ---- 
Industry Pushing to Build 2nd Nuclear Power Plant 
--------------------------------------------- ---- 
 
¶4. (SBU) The coalition agreement notwithstanding, EPZ is 
restless to move ahead with its strategy to expand nuclear 
Qrestless to move ahead with its strategy to expand nuclear 
energy in the Netherlands.  Delta announced in September 2008 
that it was starting the environmental assessment process to 
construct a second nuclear power plant at the Borssele 
location.  Delta estimated that permits and licenses would 
take at least three and a half years, and construction would 
take four and a half years.  Therefore, the earliest that a 
new power plant could be operational is the end of 2016. 
EPZ's action is consistent with the coalition agreement -- 
licensing can occur on this government's watch, but the long 
lead time ensures no construction would commence until 2012 
 
THE HAGUE 00000044  002 OF 004 
 
 
at the earliest.  During a December 2008 seminar ("A nuclear 
renaissance in the European Union?") at a think tank in The 
Hague, Delta CEO Peter Boerma said "this government will take 
steps for the next government to decide."  EPZ has also 
emphasized that planning must begin now if the Netherlands is 
to bring new nuclear power on-line in time to help achieve 
its GHG reduction targets by 2020. 
 
¶5. (U) EPZ has not made any formal decision regarding the new 
plant's supplier, capacity, or cost.  Estimates range from 
1000 to 1600 MW and from 3 to 5 billion Euros.  EPZ maintains 
that the Borssele site is suitable for up to 5000 MW and 
would like to see two to four new power plants there in the 
long-term.  The location has plentiful seawater for cooling 
(so no cooling towers needed), supportive municipal 
shareholders and local community, and proximity to the 
existing interim nuclear waste storage facility (see para 12). 
 
¶6. (U) The motivations for Dutch interest in expanding 
nuclear power are threefold: 
 
-- Energy Security:  Almost 60 percent of Dutch electricity 
production is gas-fired.  The Netherlands is a net exporter 
of natural gas, a situation that will reverse drastically 
over the next 20 years as domestic reserves are depleted. 
The Dutch realize the need to diversify their electricity 
production away from gas. 
 
-- Environmental: After rejecting nuclear power in the wake 
of Chernobyl, the Dutch public and decision-makers are 
reconsidering this position in light of their climate change 
priorities.  The Netherlands wants to reduce its GHG 
emissions 20 to 30 percent by 2020.  There is a growing 
consensus that nuclear energy must play a role in achieving 
this goal. 
 
-- Competitiveness:  To remain competitive with European 
neighbors on electricity costs, the Netherlands' fuel mix 
should gradually converge with them.  Some observers have 
estimated this will require nuclear to supply 20 percent of 
Dutch power demand. 
 
--------------------------------------------- ---- 
Other Civil Nuclear Activities in the Netherlands 
--------------------------------------------- ---- 
 
¶7. (U) The Netherlands is also home to a 45 MW nuclear 
research high flux reactor (HFR) in Petten.  This reactor is 
owned by the European Commission and operated by the Nuclear 
Research and Consulting Group (NRG), staffed by about 350 
Dutch and international researchers.  As a by-product of its 
research function, the Petten HFR is a major producer of 
isotopes for medical applications (supplying approximately 70 
percent share of the European market and 30 percent of the 
world market).  Research projects at Petten include: reducing 
the lifetime of radioactive waste; "very high temperature 
reactors" for hydrogen production; fast, gas-cooled reactors; 
Qreactors" for hydrogen production; fast, gas-cooled reactors; 
and materials testing.  The reactor is almost 50 years old, 
and work is underway to develop a new HFR. 
 
¶8. (U) Urenco Nederland B.V., a subsidiary of multinational 
Urenco Ltd, provides uranium enrichment services.  Urenco 
Nederland's high-speed centrifuge facility in Almelo is an 
important international supplier of enriched uranium for 
power plants. 
 
 
THE HAGUE 00000044  003 OF 004 
 
 
------------------------------------------- 
Regulatory, Financial, Legal Considerations 
------------------------------------------- 
 
¶9. (SBU) Financing for nuclear expansion will have to come 
from private sources.  During the December 2008 nuclear 
energy seminar, Delta CEO Boerma said a new nuclear power 
plant at Borssele could be funded via the utility operations 
of EPZ's joint owners, the capital markets, and "money from 
Gulf investors."  He did not elaborate on the latter.  The 
Dutch government, a strong voice within the EU for energy 
market deregulation and the dismantling of national energy 
champions, is unlikely to provide direct financial support 
for nuclear power expansion.  Areva Senior Vice President 
Jean-Paul Poncelet, who also spoke at the seminar, agreed 
that the pivotal challenge was to convince deregulated 
utilities (like Essent and Delta) they could invest in new 
nuclear power plants without public money.  (Note: The 
presentations given by Boerma and Poncelet are available on 
the Internet at 
http://www.clingendael.nl/ciep/events/2008120 4/.  End note.) 
 
¶10. (U) Nuclear regulatory authority is not centralized in 
the Netherlands.  The Environment Ministry (VROM) has lead 
responsibility for licensing nuclear installations and 
activities, in conjunction with the Economic Affairs Ministry 
(EZ) and the Social Affairs Ministry (SZW).  Other ministries 
are consulted on specific issues related to nuclear 
activities, such as health and water.  This decentralization 
is exacerbated by stark political differences at the 
leadership level -- VROM's Minister Jacqueline Cramer is a 
PvdA stalwart and a vocal opponent of nuclear power, while 
EZ's Minister Maria van der Hoeven of the CDA supports 
nuclear expansion.  The Department of Nuclear Safety, 
Security and Safeguards (KFD) is an independent body within 
VROM responsible for the safety of nuclear facilities as well 
as the storage and transport of nuclear materials.  KFD has 
approximately 22 employees, about half of whom supervise 
Borssele.  There are no plans to expand KFD at this time. 
 
¶11. (U) The Netherlands, in addition to being party to the 
Paris Convention on nuclear liability, has its own Nuclear 
Incidents (Third Party Liability) Act of 1979.  Major 
elements of the law include: 
 
-- In the case of an accident, the nuclear operator's maximum 
liability is 340 million Euros. 
 
-- The operator is not exonerated from paying compensation 
for damage caused by an incident due directly to a grave 
natural disaster. 
 
-- If, in the opinion of the Minister of Finance, an operator 
of a nuclear installation cannot obtain the financial 
security required by the Paris Convention or if such 
financial security is only available at unreasonable cost, 
Qfinancial security is only available at unreasonable cost, 
the minister may enter into contracts on behalf of the state 
as insurer or provide other state guarantees up to the 
operator's liability limit. 
 
-- The time limit for submission of claims resulting from 
personal injury is thirty years from the date of the 
accident; for other types of damage, this limit for 
submission is ten years. 
 
¶12. (U) All nuclear waste produced in the Netherlands is kept 
 
THE HAGUE 00000044  004 OF 004 
 
 
in vitrified form at an above-ground storage facility 
adjacent to the Borssele power plant.  This "temporary 
storage" is for at least 100 years, at which time "final 
storage" can begin.  The Central Organization for Radioactive 
Waste (COVRA) is the single government entity entrusted with 
responsibility for radioactive waste.  COVRA operates under 
the "supplier pays" principle where the nuclear operator pays 
the costs up front.  For a nuclear power plant, this would be 
about 100 million Euros for an operational period of 40 years. 
 
--------------------------------- 
Industrial and Competition Issues 
--------------------------------- 
 
¶13. (SBU) Post believes the Netherlands does not have the 
capability to design and build a new nuclear plant on its 
own.  The domestic manufacturing base has had little 
incentive to focus on the nuclear sector since Chernobyl.  In 
theory, the skilled Dutch engineering and construction 
workforce could be redirected to the civil nuclear industry, 
but there is no program in place to do so.  During the 
September 2008 visit of Chairman Dale Klein of the U.S. 
Nuclear Regulatory Commission, KFD told him that attracting 
adequate staff for the nuclear industry was a constant 
challenge in the Netherlands.  KFD has identified the threat 
that the organization's nuclear expertise will fall in the 
near-term due to an aging workforce. 
 
¶14. (SBU) Post is not aware of any imminent nuclear-related 
tenders.  However, Delta CEO Boerma said he expects "a 
maximum of three will go through a tender process" if a 
second EPZ power plant at Borssele moves ahead.  He added 
that Areva's EPR and Westinghouse's AP-1000 are the only 
current "third generation" reactors "accessible" for EPZ -- 
implying these were both operationally satisfactory to EPZ's 
owners and acceptable to Dutch regulators from a safety point 
of view.  Areva would certainly like the Netherlands to be 
part of its European "home market" but post believes safety 
and commercial considerations will drive EPZ's and the Dutch 
government's decisions.  There is no reason to suspect 
political considerations would sway the choice of reactor 
supplier. 
 
¶15. (SBU) Any future expansion of the Netherlands' civil 
nuclear sector will offer subcontracting opportunities for 
U.S. firms, particularly in engineering and construction.  To 
remain competitive with Areva and other European suppliers, 
U.S. firms should start now to reestablish links with Dutch 
energy companies and government stakeholders. 
 
FOSTER