SLOVAKIA GAS CRISIS UPDATE, JANUARY 15

UNCLAS BRATISLAVA 000031 SENSITIVE SIPDIS STATE FOR EUR/CE K. ERTAS AND L. LOCHMAN STATE FOR EUR/RA E. MCCONAHA E.O. 12958: N/A TAGS: ENRG ECON EINV PREL LO SUBJECT: SLOVAKIA GAS CRISIS UPDATE, JANUARY 15 REF: A. BRATISLAVA 0008 ¶B. BRATISLAVA 0013 SUMMARY ¶1. (SBU) The Slovak government has quickly backed away from last week's announcement that it plans to re-start the recently closed nuclear reactor at Jaslovske Bohunice. Experts have told us there is virtually no need to restart the plant because of the gas crisis. Gas reserves are reportedly adequate to last until the end of January. Yesterday's agreement to get 20 mcm/d of Ukrainian gas may be technically difficult because of the current configuration of the Ukrainian system to move reserves eastward from storage facilities near the western border. End summary. BACK FROM THE NUCLEAR BRINK ¶2. (U) With the Russian gas cutoff now in its second week, the Fico government has backed away from its previous declarations that it would reconnect the V1 nuclear power plant at Jaslovske Bohunice, which it closed at the end of December in accordance with its EU accession agreement. Both PM Robert Fico and his economy minister, Lubomir Jahnatek, have now positioned the Bohunice restart as a vague contingency in case the electrical grid is threatened by the gas crisis. ¶3. (SBU) Apart from the sharp criticism last week's announcement drew in Brussels and Vienna, independent experts here have questioned the need for more electrical capacity during the gas crisis. One of the GoS's leading energy experts recently told us that the electrical system here uses gas for perhaps 10-12 percent of the total power generation at peak demand, mainly to stabilize the grid as loads vary. This stabilization could be accomplished with coal-fired power plants. With large industrial users offline, normal peaks have flattened out and the overall load is low, so the stability of the system is quite high and should remain so. Adding to the argument against restarting Bohunice V1 is the limited availability of nuclear fuel: Slovakia reportedly has about 50 days of supply on hand. Several experts have speculated that the main reasons to consider starting the plant were that it shows the government taking decisive action (albeit irrelevant),and that the GoS could use the revenue for its already stretched budget. RESERVES TO END OF JANUARY ¶4. (U) At the same time, the gas reserve situation has become somewhat clearer, though there is still a disparity between government statements and those of the gas utility. According to distribution monopoly SPP (which also runs the transit business through Slovakia),the country has reserves to last until roughly the end of January. GoS statements have put reserves at anything from 8 to 12 days at the current emergency rate. Earlier reports that the country's 2 bcm reserves would last 70 days (ref A) turn out to be based on the assumption that there are imports to pressurize the system. Without that pressure, the system cannot move most of the reserves through the system. UKRAINE, RUSSIA AGREE TO SWAP ¶5. (SBU) Fico's January 14 trip to Kyiv and Moscow landed an in-principle agreement for Ukraine to move 20 mcm/d to Slovakia from its western reserves, which would then be replenished from Russia. Slovakia's normal daily consumption in cold weather is roughly 30 mcm/d, so this swap could theoretically allow industrial users to reopen (since a pressurized system would allow greater use of reserves). Experts have told us, however, that the arrangement would be technically difficult, since the Ukrainian system is now configured to move reserves from west to east. Reconfiguring the flow to accept a relatively small volume from Russia could entail cutting off some domestic markets, which seems politically unlikely. OBSITNIK