SPAIN: SOCIALIST DEPUTY'S VIEWS ON ENERGY ISSUES

UNCLAS MADRID 001803

SIPDIS

SENSITIVE

DEPARTMENT FOR OES/EGC, EB/ESC/IEC, AND EUR/WE; NRC FOR
INTERNATIONAL PROGRAMS: ROSALES-BUSH; DOE FOR INTERNATIONAL
PROGRAMS: BHAT

E.O. 12958: N/A
TAGS: ENRG SP
SUBJECT: SPAIN: SOCIALIST DEPUTY'S VIEWS ON ENERGY ISSUES

REF: A. MADRID 1496


B. 04 MADRID 4241


1. (SBU) ESTHOFF met with Socialist Party (PSOE)
Congresswoman and Industry Commission spokesperson Arantza
Mendizabal Gorostiaga May 11 to discuss nuclear and renewable
energy-related issues. Mendizabal made several interesting
comments that tended to confirm our previous reporting
(reftels) on the future of nuclear energy in Spain:

-- Prime Minister Zapatero and the PSOE will keep their
campaign promise and will take no actions during the current
Congress (through 2008) to reconsider Spain's de facto
moratorium on the construction of new nuclear power reactors.

-- That said, the Prime Minister and the PSOE understand
that the strong policy impetus to meet Kyoto Protocol
commitments will complicate any future efforts to meet the
PSOE commitment to gradually phase out Spain's nine existing
nuclear power reactors.

-- No hard decision regarding the possible closure of an
existing nuclear power facility will be taken before 2008
(after the next national elections).

-- The Spanish people are more like the Germans than the
French in their general distaste for nuclear power.

-- To keep all options open, the PSOE plans major efforts
during this Congress (i.e., through 2008) to establish a
central depository for nuclear waste. (Note: at the moment,
each of Spain's nuclear facilities stores its own waste. End
Note.) Dealing with the nuclear waste issue is a
prerequisite for any possible PSOE attempt to back away from
its anti-nuclear policy.

-- The recent nuclear accident at the Vandellos II facility
(Ref A) presents the PSOE with an interesting set of
challenges. The government must take a hard line to
demonstrate to the public that it takes safety issues
seriously and will thus have to consider reforming Spain's
Nuclear Security Council (CSN - Spain's NRC equivalent). But
it must do so in a way that does not fuel anti-nuclear
sentiment.

-- Reconsidering the PSOE's anti-nuclear stance makes
obvious sense from an economic and energy security sense, but
politically it would be enormously difficult for the PSOE to
agree to the construction of new nuclear power reactors in
Spain.

-- Renewable energy sources are "nice" but offer no short,
medium or long-term solution for Spain's dependence on
imported energy (i.e., oil and natural gas).

-- Spain's energy problems are aggravated by an almost out
of control energy demand growth rate. Reducing the growth
rate is not easy. Raising prices would be inflationary and
would violate PSOE campaign promises.

-- Congress' Industry Commission (which overseas
energy-related issues) plans to implement minor energy market
reforms to make this market more transparent and "perfect."
The current "confused" nature of electricity grid regulation
complicates wider efforts to curb the excessive electricity
consumption growth rate.


2. (SBU) COMMENT: Mendizabal, a Basque who is in her fifth
consecutive term in Congress, struck us as pragmatic and
realistic. She is no anti-nuclear campaigner, but realizes
that moving the PSOE away from its anti-nuclear stance would
be very difficult. Her comments on the need for energy
market reforms suggest that she understands that the best way
forward is through market liberalization. Mendizabal
appeared well aware of the significant and mounting
energy-related challenges facing Spain, but did not see any
politically realistic way to reduce Spain's dependence on
imported petroleum and natural gas.
MANZANARES