IAEA: LETTER RECEIVED FROM IAEA REGARDING VOLUNTARY

UNCLAS UNVIE VIENNA 000644

SIPDIS

STATE FOR ISN/NESS, IO/T, ISN/MNSA, ISN/RA
NA-243-GOOREVICH/BRUNNS; NA-241 O'CONNOR, LAMONTAGNE

E.O. 12958: N/A
TAGS: ENRG KNNP IAEA AORC TRGY
SUBJECT: IAEA: LETTER RECEIVED FROM IAEA REGARDING VOLUNTARY
CONTRIBUTION OF USD 500,000 TO SUPPORT NUCLEAR ENERGY ACTIVITIES


1. U.S. Mission received a letter from the IAEA dated October 30,
2008, which we conveyed initially by e-mail.

Begin text of letter:

Sir,

I have the honour to refer to my letter dated 2008-06-26 informing
you of the IAEA's acceptance of your Government's voluntary
contribution of USD 500,000 for 2008 to support the IAEA's nuclear
energy activities.


Over the past few years there has been a considerable increase in
the number of countries expressing interest in a first nuclear power
plant. The IAEA has been able to respond to the needs of these
countries in a timely manner due to extrabudgetary contributions
from inter alia the United States of America. This correspondence
serves to provide you with a brief status report on the projects for
which US funds were provided in 2007, as well as to propose
activities for the use of the US contribution received in 2008.

With the U.S. contribution of USD 500,000 in 2007, we have completed
a publication entitled "Evaluation of National Nuclear
Infrastructure Development Status" (NG-T-3.2),which is designed to
accompany the guide published last year, i.e. "Milestones in the
Development of a National Nuclear Infrastructure" (NG-G-3.1). We
are nearing completion of a publication on the "Responsibilities and
Competencies of a Nuclear Energy Programme Implementing Organization
(NEPIO)" to provide further information on how to integrate various
stakeholders into the early planning for a nuclear power programme.
These two publications (NE series technical reports) will be the
main subject of a Technical meeting/Workshop on 'Evaluation
Methodology for Nuclear Power Infrastructure Development' to be held
from 10-12 December 2008 at the IAEA's headquarters in Vienna. A
review meeting was held in July on a publication tentatively titled
"Improving the Prospects of Financing Nuclear Power Plants," which
will be finalized by the end of 2008. Unless you indicate
otherwise, we propose to use the remaining funds allocated to this
activity (approximately EUR 19,000) for follow-on activities in 2009
related to financing nuclear power plant programmes. Activities
regarding development of a document on site issues and industrial
capacity are just getting underway and will continue into 2009.
More detailed information on the financial aspects of these
activities is provided in an attached spreadsheet. In the area of
Technology Deployment, the US contribution in 2007 is being used for
the development of a publication reviewing current construction
technologies and their application to new nuclear power plant
construction. The project will cover technologies that are
generally used for large civil construction projects, not unique to
the nuclear industry or to any specific nuclear plant design.

Regarding the US contribution of USD 500,000 received in 2008,
please find enclosed a list of suggested activities for the use of
these funds as discussed between representatives of the Department
of Nuclear Energy and Mr. Alex Burkart, of the US Department of
State. We are proposing activities that support nuclear power
infrastructure development and technology deployment in response to
the needs of countries planning a new nuclear programme as well as
countries expanding existing nuclear programmes. The proposed
technology deployment activities focus on equipment reliability
lessons learned, materials management, and technology improvement
for near term plants to reduce water consumption. We would
appreciate receiving your Government's concurrence to utilize the
funds indicated for the activities described in the attachment.

I look forward to the fruitful and continuing cooperation between
the Government of the United States of America and the International
Atomic Energy Agency.

Accept, sir, the assurances of my highest consideration.

Y.S. Sokolov
Deputy Director General
Head of the Department of Nuclear Energy

End text of letter


2. Per the foregoing letter, following is the list of activities
the IAEA proposes could be financed from the USG CY 2008
contribution.

Text of attachment:

Voluntary Contribution from the USA for 2008 in tbe amount of USD
500 000 (EUR 321 027) for Nuclear Energy Activities.

Possible Topics for US Extra Budgetary Funding


Infrastructure Development Activities (2007 savings: EUR 65,000):


1. TM/Workshop on Evaluation Methodology for Infrastructure
Development, 10-12 December 2008, Vienna, Austria

This workshop will provide Member States an opportunity to learn how
to evaluate their infrastructure status through a self-assessment or
peer review. It is hoped that the results of the evaluation will
inform the nuclear power programme planning process, and allow for
more effective development and delivery of technical cooperation
projects. The workshop will also provide information on the NEPIO
and raise emerging issues regarding infrastructure development. As
with previous infrastructure workshops, Member States will be asked
to provide their experience and breakout sessions will give them an
opportunity to discuss challenges and solutions.

This activity is associated with the development of documents on
assessment methodology and NEPIO, and EUR 65 000 in savings from the
2007 contribution for those activities will be used to support the
workshop. (No additional 2008 funds are requested for this
activity.)


2. Develop a document on alternative contracting and ownership
policies for nuclear power plants (EUR 70 000)

Build-Own-Operate and Build-Own-Operate-Transfer models, regional
approaches and leasing of nuclear power plants have not been used at
all, or not widely in the nuclear industry, despite their successful
application in other segments of the energy sector. Some advantages
associated with the BOO/T concept may be reduced need for human
resource development and access to vendor secured financing.
Examination of the issues associated with these approaches will
further understanding of their current viability, as well as the
advantages and disadvantages associated with them. The report will
also identify challenges and possible solutions to their more
wide-spread use.

Funds are requested to support consultancies, consultants, review
meetings and other costs associated with the project. Approximate
costs total EUR 70 000.


3. Develop a document on workforce planning to meet the human
resource needs associated with the Milestones document (- EUR 90
000)

Human resource development is one of the most critical issues
associated with development of a nuclear power programme, especially
in a country with little nuclear infrastructure. Identification of
the skills and technical competencies needed by key personnel for
planning and implementing such programmes in the stakeholder
organizations -industry, NEPIO, regular, owner-operator and others,
will help member states understand their human resource needs. This
will be coordinated closely with related documents on the
higher-level responsibilities and competencies of NEPIO and
owner-operator. The document will also identify how these skills can
be acquired whether through use of qualified contractors and
consultants, or through training and education.

Funds are requested to support consultancies, consultants, review
meetings, and other costs associated with the project. Approximate
costs total EUR 90 000.


4. Management Systems for developing nuclear power programmes (EUR
18 500)

Recent experience of Finland and France have identified the need for
appropriate management systems to be in place prior to issuing
requests for bids and constructing nuclear power plants. The vendor
(and all subcontractors),owner-operator and licensing organization
should have a common understanding of the project, share a safety
culture, and implement management systems. This project will look at
lessons learned from recent experience and extrapolate useful
guidance for new or expanding nuclear programmes.

Funds arc requested to support the effort, especially participation
by developing countries in a technical meeting scheduled for early

2009. Approximate costs total EUR 18 500.


5. Vendor issues associated with a first nuclear power plant (EUR 20
000)

In introducing a Nuclear Power Programme, most countries will
acquire facilities and components from a limited number of
established international manufacturers and vendors. However, those
facilities or components are different from those purchased for
other industrial uses, because (a) most of nuclear technology goods

are sensitive as they could have non-peaceful uses (in addition to
peaceful uses),(b) the monetary amount per transaction is
comparatively large, and (c) technical support by vendors and
supplier governments, including the regulator, during the planning,
construction, and operation, or in the long-term, is needed.
Furthermore a rapid growth in demand for nuclear power plants all
over the world may cause shortage of supply in the future. A
Technical Meeting will be held with the participation of vendors,
users and related parties for information exchanges with a view to
understanding the issues required for mutual benefit.

Funds are requested from the US and Japan to support a workshop and
associated activities. Approximate funds requested from the US are
EUR 20 000.


6. Beijing Ministerial conference (EUR 15 000)

Funds are requested to support the full participation by developing
countries in the International Ministerial Conference on Nuclear
Energy in Beijing in April 2009. Approximate costs total EUR 15 000.


Research Reactor/Human Resource De'Vel9pment Activity:


7. Initial Consultancy on International Remote Nuclear Engineering
Training on a Research Reactor (EUR 7 527)

North Carolina State University's research reactor facility bas
experience in training nuclear engineering students at other U.S.
universities over an internet-based connection. Should this kind of
remote training be available across national borders, it could
increase the opportunities for nuclear engineering students without
access to a research reactor, especially in developing countries.
Given the expected increase in demand for nuclear engineers in
countries expanding and developing nuclear power programmes,
demonstrating the feasibility of this kind of arrangement could help
address human resource development issues in many regions.

Up to EUR 7 527 in funding is requested to have an initial
consultancy to explore the feasibility of an Agency demonstration
project. Should the results of the consultancy be favourable, an
additional request may be made for the project itself.

Technology Deployment Activities:


8. Component and system reliability and new plant development and
deployment (EUR 50 000)

A major impact on the economics of nuclear plants is system and
component reliability including the impact of materials on
reliability. A systematic assessment of these areas as they impact
new plant development and deployment will enhance the overall
economics and sustainability of new plants. This activity would
examine experience regarding component and system reliability and
materials behaviour and review how this experience is incorporated
into new plant designs. Similar activities are being conducted in
individual countries but no significant attempt has been made to
integrate worldwide practices in these areas. In particular, it is
expected that this activity will integrate ongoing work at EPRI and
other research organizations in industrialized countries with
experience from developing countries (e.g. Rep. of Korea, China,
India) to present a global assessment.

Funds are requested to support the consultancies and review meetings
as well as the consultants to produce the first draft report.
Approximate funds requested from the US are EUR 50 000.


9. Design approaches for efficient water use for new, evolutionary
water-cooled NPPs (EUR 50 000)

Efficient use of water is very important in several developing
countries considering introduction of nuclear power, and in
industrialized countries considering expansion of their nuclear
power programme. In some countries, the lack of water has even
resulted in shortages in electricity generation. Therefore, the
efficient management of water use at new nuclear plant designs is
highly important.

This activity would evaluate the use of water for nuclear power
plants, and identify means of more efficient use. The approach
followed will utilize recent or ongoing industrialized country
activities and expand the information to incorporate global and
developing country perspectives. The activity would examine
strategies for modes of water generation/consumption for NPPs with
regard to needs (e.g. service water make-up water, refueling water,
and others) and types of cooling systems to assure efficient use
water by the plant. For cases in which the nuclear plant is also

used for desalination, it would examine the optimal balance between
water production and consumption through the applications of
water-consumption reduction strategies, and identify areas in
design/operation and in waste water treatment which at the end will
affect the reduction of water consumption and cost for the overall
power generation.

Funds are requested to support the consultancies and review meetings
as well as the consultants to produce the first draft report.
Approximate funds requested from the US are EUR 50 000.

End text of attachment.


3. Mission anticipates close coordination with Washington agencies
in the prioritization of activities as proposed by the IAEA and in
preventing assistance to inappropriate activities such as the
recently approved Technical Cooperation project SYR/0/020. U.S.
Mission POC is Nuclear Energy Attache Lee Gebert
(GebertLH@state.gov).

SCHULTE