MEDIA REPORT OFFICIAL ADVICE ON VIABILITY OF NUCLEAR ENERGY

UNCLAS SECTION 01 OF 02 WELLINGTON 000480

SIPDIS

SIPDIS

STATE FOR EAP/PD-AGRIMES, EAP/P-K BAILES, EAP/ANP-DRICCI, INR/R/MR

E.O. 12985: N/A
TAGS: OIIP KPAO KMDR OPRC MNUC PREL NZ
SUBJECT: MEDIA REPORT OFFICIAL ADVICE ON VIABILITY OF NUCLEAR ENERGY
IN NZ

REF: A) 05 WELLINGTON 650, B) WELLINGTON 260


1. SUMMARY: On June 15, 2006, Radio New Zealand aired a report on
the viability of nuclear energy in New Zealand after using the
Official Information Act to obtain government papers prepared for
the Minister of Energy.

Two sets of official advice on possible future use of nuclear energy
in New Zealand dismiss it as too expensive, too difficult to set up,
and posing significant risks. However, the government papers say
this could change within the next twenty years as the technology
improves.

Radio New Zealand reporter Caitlin Cherry canvassed the views of
many of the major players: New Zealand's Electricity Commissioner,
Ministry of Economic Development, Green Party co-leader, an
Australian and New Zealand energy analyst, and Acting Energy
Minister Trevor Mallard. Quotes from the radio report are detailed
below with the main protagonist in each paragraph underlined. END
SUMMARY.


2. Radio New Zealand outlines the Electricity Commissioner's view
that nuclear energy is not presently a viable option for New
Zealand. The network reports that Auckland's recent five-hour power
cut prompted calls for the country to invest in nuclear power to
meet future energy demands but that the Chair of the Electricity
Commission, Roy Hemmingway, says that that argument has no merit.

"It's very tempting whenever something happens like this, like
happened in Auckland on Monday, that people with an agenda for
something will push that agenda as the solution. The truth is that
nuclear power would make the electricity system in New Zealand less
reliable rather than more, so it's not a solution to anything in the
New Zealand power system at this stage."

Reporter Caitlin Cherry reports this quote is consistent with advice
Hemmingway has provided to the Government. She says, "In his
submission to the Energy Minister in March of this year, Roy
Hemmingway argued that setting up a typical 1200 megawatt nuclear
power plant would create massive problems for the energy system
here. That's because if the plant ever trips off-line and there's a
problem, full back-up power needs to be ready to fill that gap. Mr.
Hemmingway says that would require an unreasonably large amount of
generation just sitting there as a back-up."


3. RNZ reports that the Electricity Commissioner, Roy Hemmingway,
says that the situation could change.

"Now on the horizon, maybe 20 years out, there is potentially some
technology change in nuclear power that will make it economical at
much smaller sizes. When those plans have been demonstrated to be
available, I think that New Zealand might take a look at them, but
at this stage nuclear power is not the right choice for New
Zealand," says Hemmingway.


4. The news report goes on to underline that another Government
agency has provided similar advice. RNZ states that the same
argument is made in the Economic Development Paper, which also
points out that this country would need an entire nuclear
infrastructure and trained nuclear physicists and engineers,
significantly adding to the already huge cost.


5. The network also interviewed Green Party co-leader Jeanette
Fitzsimmons, who agrees that nuclear power isn't feasible for New
Zealand, but is reported to accept that the issue will need to be
looked at again when the technology improves.

"If, in the next generation there is a new technology that is safer,
cheaper and doesn't have all the problems associated with this one,
then of course we should look at it again -- but we can't wait for
technology to save us in that way; we have to do something now and
the obvious things to do now are much greater energy efficiency, use
of technologies that are already here and cost-effective like wind
and solar and bio-fuels. In a generation's time we probably won't
even need to think nuclear."


6. The network also sought the views of two energy industry analysts
-- one Australian and one New Zealander. Reporter Caitlin Cherry set
up the quote from the Australian scientist by noting that "across
the Tasman Prime Minister John Howard has set up a task-force to
look at whether Australia should adopt nuclear energy. While most of
New Zealand's power comes from hydro-schemes, 86% of Australia's
energy comes from coal, a major contributor to green-house gases."

The editor of science magazine "Cosmos," Wilson da Silva, believes
that Australia will have no option but to go nuclear.

"I think that it is inevitable, particularly with global warming now
taking away water, we don't have hydro as an option. Australia has
always been the second driest continent after Antarctica, so we

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don't have the option of using hydro, which is the one that
generates clean power without any greenhouse gases. So if we don't
want to down to the coal and gas and oil, so we basically have to
think about nuclear and I think it will happen here [in Australia],"
says da Silva.

Wilson da Silvia adds that there is some significant work under way
around the world in creating safer, smaller, and more efficient
nuclear power plants.


7. The second power industry consultant RNZ interviewed was New
Zealander Bryan Leyland, who has also been looking at some of the
new technology. He says there is no point waiting around to see what
happens.

"If we started now, if we started doing our homework, by the time we
are in a position to order one, which would be several years, these
newer plants will be available anyway and it is still going to be
several years till it is running. So the time that they are talking
about in the future is the time that I think we would arrive at if
we started doing our investigations now."


8. Radio New Zealand considers that the Government is unlikely to
undertake such investigation and says that the Government has
reiterated that nuclear power is not an option for New Zealand.
Acting Energy Minister Trevor Mallard says:

"Roy Hemmingway, who is the Electricity Commissioner, essentially
had it right. Roy is a supporter of nuclear power in the right
context. What he says is that our energy system is so small that
technically having a nuclear power station, one of 1000 or 1200
megawatts -- which would be a quarter of the supply of NZ -- having
to have standby generation ready to go would just be enormously
inefficient... I don't know of any suggestion which makes a power
plant of below say 600 megawatts nuclear power plant something which
is viable and if that's the case you'd have to have another power
plant one and half times the size of the biggest one in New Zealand
sitting ready to go if this thing went down so there is an absolute
duplication which makes it uneconomic here."


9. In a social conversation one media contact from a rival radio
network has suggested that beyond the logistics the Labor Government
may also have a political motivation as she believes that "until now
being anti-nuclear has been the one issue that has consistently
united the right and left of the Labor caucus."

MCCORMICK