Identifier
Created
Classification
Origin
08ROME1577
2008-12-24 13:24:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Rome
Cable title:  

INFORMATION ON ITALY'S PLANS TO RETURN TO NUCLEAR ENERGY

Tags:  ENRG TRGY BEXP BTIO IT 
pdf how-to read a cable
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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

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